PROGRESS REPORT ON NSC 5405 (SOUTHEAST ASIA) AND SUMMARY OF DEVELOPMENTS IN INDOCHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R002900480006-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: December 19, 2016
• Document Release Date: April 12, 2005
• Sequence Number: 6
• Publication Date: April 13, 1955
• Content Type: MF

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DATE March 24, 1955
COPY NO.
OPERATIONS COORDINATING BOARD
Washington, D. C.
PROGRESS REPORT ON NSC 5405
(SOUTHEAST ASIA)
SUMMARY OF DEVELOPMENTS IN INDOCHINA
REFERENCE: NSC Action No. 1011, and
Board Assistants' Mtg. 2/18/55.
OCB FILE NO. 41 and 64
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NSC review(s) completed.
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This document contains information affecting the national defense of the
United States, within the meaning of the espionage laws, Title 18, Sec-
tions 79q and 794, U.S.C., the transmission or revelations of which in
any manner to an unauthorized person is Prohibited by law.
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OPERATIONS COORDINATING BOARD
Washington 25, D. C.
April 13, 1955
MEMORANDUM FOR THE OPERATIONS COORDINATING BOARD
SUBJECT: Progress Report on NSC 5405 (Southeast Asia) and
Summary of Developments in Indochina
The attached Operations Coordinating Board Progress Report
on NSC 5405, "United States Objectives and Courses of Action With
Respect to Southeast Asia," and the supplement thereto, "Summary
of Developments in Indochina," dated March 24, 1955, were noted
by the National Security Council on April 7, 1955, Action No.
1376-b.
The differences between these reports and the previous
drafts dated March 15, 1955 are shown on the reverse side of
this memorandum.
The previous drafts on this subject, dated February 21 and
25 and March 15, 1955, are obsolete and may be destroyed in
accordance with the security regulations of your agency.
Elmer B. Staats
Executive Officer
Attachment:
Executive Officer, OCB, memo to NSC,
on above subject, dated 3/25/55,
with attachments as listed.
OCB File Nos. 41 and 64 TOP SECRET
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OPERATIONS COORDINATING BOARD
Washington 25, D. C.
March 25, 1955
MEMORANDUM FOR: Mr. James S. Lay, Jr.
Executive Secretary
National Security Council
SUBJECT: Progress Report on NSC 5405 (Southeast Asia) and the
Supplement thereto: Summary of Developments in Indochina.
There is attached a Progress Report by the Operations Coordina-
ting Board on NBC 5405, "United States Objectives and Courses of
Action with Respect to Southeast Asia," covering the period July
22, 1954 through March 15, 1955, and a supplement to the report
for the period August 20, 1954 through February 21, 1955, covering
the major developments in Indochina. On March 23, 1955, the
Operations Coordinating Board concurred in the Progress Report
and the Supplement for transmittal to the National Security Council.
The agencies participating in the implementation of NSC 5405
were: Department of State, Department of Defense, Foreign Opera-
tions Administration, Central Intelligence Agency, and United
States Information Agency. The Treasury Department also partici-
pated in the activities reported in the supplement on Indochina.
Executive Officer
1. Progress Report on NSC 5405
(Southeast Asia) dated 3/24/55,
with attachment as listed.
2. Supplement to Progress Report on
NSC 5405, Summary of Developments
in Indochina, dated 3/24/55.
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March 24, 1955
PROGRESS REPORT ON NSC 5405
UNITED STATES OBJECTIVES AND COURSES OF ACTION
TWITH RESPECT TO SOUTHEAST ASIA
(Policy approved by the President, January 16, 19511)
(Period Covered: July 22, 1954 through March 15, 1955)
A. SUMMARY OF MAJOR ACTIONS AND DECISIONS
1. The previous Progress Report dated August 4, 1954 coincided
with the end of 7-2 years of organized warfare in the Associated
States, especially concentrated in Viet-Nam, characterized by the
final declaration of the Geneva Conference on July 21,1954. That
Progress Report was preoccupied with the Associated States and the
major forward stride of Communism in that part of Southeast Asia.
On August 4, 1954, the OCB established an Indochina Special
Committee but left it to the NSC 5405 Working Group to report on the
remainder of the area of Southeast Asia.
The present Progress Report, therefore, will be concerned
chiefly with Thailand and Burma. No special operations were carried
on in respect to Malaya. There is attached a summary of developments.
at the February 23 Bangkok Conference which relate to NSC 5405.
2. Thailand: Thailand received the major emphasis. The principal
actions regarding Thailand were:
a. Granting special assistance to Thailand to strengthen its
military establishment as follows:
$18 million to be distributed for military equipment
$10 million to the Army
2.3 million to the Navy
5.7 million to the Air Fbrce
$7 million for FOA use in the construction of
military establishments, particularly related t?
training programs.
b. Programming an additional $3.5 million to help finance the
construction of a highway through northeastern Thailand.
c. An increase of ;15.3 million has been recommended in the
Thailand Fiscal Years 1950-54 MDA program for Thai Armed Forces.
As of November 1, 1954, 467.4 million of the Army 1950-54 FAA
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program had been delivered. If approved, the ceiling for the
period will be 04.1 million.
d. $28.2 million was programmed during the visit of Police
Director General Phc,o Sriyanon in November - December 1954, for
specific projects to be worked out in such fields as highways,
railways, and specialized equipment aimed to improve communications.
The specific projects should be developed and made firm before the
end of Fiscal Year 1955. One project was firmly agreed to: the
expansion of the Thai Volunteer Defense Corps to embrace 25,000 of
the 40,000 villages of the nation and to cope with communist sub-
version at the village level.
e. A nation-wide information program was launched to assist
the Thai Government in informing the 20 million people resident
in Thailand of the nature and dangers of communism. From December
7 to December 16, the U.S. Government participated in the Bangkok
Constitution Fair with industrial exhibits and Cinerama. This
was the first U.S. undertaking of its kind under the President's
program for increased participation in trade fairs. The combined
U. S. Government and industry exhibit won first prize from the
Thai Government for originality,
f. A political basis for collective action against further
communist advances was established through the Manila Pact
involving eight nations vitally concerned with communism in
Southeast Asia.
3. Burma: Plans were made for providing military assistance to-
the Burmese in a maximum amount of $20 million under Section 121 of
the MSAO Rangoon as instructed to sound out the Burmese Government
informally on the understanding that if the Burmese reaction was
favorable the U.K. Government would be informed and the approach to
the Burmese Government would be formalized.
4. Overseas Chinesez Lines of action were studied and agreed to
regarding overseas Chinese in Southeast Asia with a view to preventing
them from falling victims of the Communists. Special attention was
given to means of dissuading Chinese youth from traveling to mainland
China to study in Communist institutions of learning, with special
reference to improving educational facilities to Chinese elsewhere in
Asia such as at Singapore, Hong Kong, Taipei and Manila.
B. EVALUATION OF PROGRESS IN IMPLEMENTING NSC POLICIES AND OBJECTIVES
5. The major actions in line with NSC 5405 policy have met with
ready cooperation by the Thai Government on all categories of programs
and, in fact, the size of certain programs has exceeded original plans.
Little progress was made with Burma because of the Burmese Government's
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reluctance to take any public position which might jeopardize its re-
lations with Communist China. There were no significant U.S. programs
in Malaya because of the British belief that they were competent to
cope with the problems and did not seek U.S. assistance. The necessity
of developing regional solidarity has resulted in the'preparation of
a paper on the subject: "Promotion of Regional Solidarity in Mainland
Southeast Asia." NSC 5405 is under review.
C. EMERGING PROBLEMS AND FUTURE ACTIONS
6. Manila Pact: The Asian members of the Manila Pact may exert
pressure on the U.S. to depart from its previous position and engage
in combined planning and make more specific commitments with respect
to the area and military implementation of the Pact.
7. Burma: The project for assisting Burma in funding arms pur-
chases is constantly under consideration and U.S.-Burma negotiations
will probably be initiated shortly.
8. Regional Solidarity: Thailand, Laos and Cambodia recognize
that if they are to survive communist aggression, it will be neessaary
for them to cooperate with one anther more than at any time in their
previous history.
Collective action against external dangers can be dealt with
chiefly under the Manila Pact which has a predominantly Western flavor.
The development of collective action to meet internal problems requires
stimulating initiative and leadership among the states located in the
region. Although many references and studies have been made treating
Southeast Asia on a regional basis, the countries in the area have
not yet developed the bases for regional action and those bases need
to be brought into being. A paper on the subject: "Promotion of
Regional Solidarity in Mainland Southeast Asia" was prepared by the
OCB Working Group, and transmitted to the Board Assistants on February
11 for information; and was simultaneously forwarded to interested pests
in the field for comment with a view to revision.
9. Afro-Asian Conference: The activities of the Afro-Asian nations
at the Bangdung Conference in April 1955,could- have a detrimental effect
on the achievement of U.S. national objectives. Although the Conference
will present the Chinese Communists with propaganda opportunities, the
principal communist gain may be in achieving an appearance of peaceful
unanimity at an Afro-Asian Conference from which Western democratic
pociers are excluded. The implication would be that further Afro-Asian
Conferences should be held of a similar nature which would make it
increasingly difficult for the Western democracies to persuade Asian
and African countries to take a firm anti-communist position. If an
Afro-Asian Secretariat is established, the probability of more such
conferences would be assured.
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10. Vietnamese Refugees: The United States is taking an active
interest in the possible evacuation and repatriation of 54,000 Viet-
namese refugees in northeastern Thailand, most of whom entered Thailand
during 1946 and 1947 from the Hue area of Viet-Nam. As most of them
proved to be Viet Minh sympathizers and potential communist agents,
the Thai Government regards them with suspicion. In October 1954 the
Thai Government reached agreement with the South Viet-Nam Government for
the repatriation of these refugees. Currently the Thai Government has
received the assistance of the French Government in inquiring whether
the Viet Minh will receive those Vietnamese refugees who desire to be
repatriated to the Communist area. The U.S. Government is attempting
not to become involved publicly with the repatriation, if it occurs,
but it may become involved in helping finance the arrangement. There
is a possibility that these refugees may be moved from Thailand, through
Laos to Viet-Nam and that Thailand will finance such a move. The Laos
Government is apprehensive of Viet-Nam refugees taking flight, while
in transit through Laos, and forming a subversive cadre in that country.
11. Rice Surpluses: The problem of rice surpluses in Burma and
Thailand may rise to plague us during the coming year. These nations,
with the U.S., are the three major rice exporting nations. At the
close of the calendar year 1954, Burma and Thailand were faced with
large unsold surpluses, Thailand alone having a surplus unsold of about
600,000 tons. Burma and Thailand were alarmed at the passibility that
the United States would sell its surpluses in Asia, thus depressing
the market for Thai-Burmese rice, aggravating their foreign exchange
problem, and possibly requiring them to seek relief from the U.S.
Government. The U.S. will under ?L.480 sell rice only to'Japan and not
to other partz of A$ia. As new cropc.;,becon 3 ay.&ilab3.e in ?1955, the
problem will continue to be of importance.
:attachment :
Summary of Developments at
Feb. 23 Bangkok Conference.
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THE IMPLEMENTATION OF NSC 5405 THROUGH THE MANILA PACT
CONFERENCE AT BANGKOK March 2ir1955
1. The objectives of NSC 5405 are to prevent the countries of
Southeast Asia from passing into the Communist orbit: to persuade
them that their best interests lie in greater cooperation and strong
affiliations with the rest of the world; and to assist them to develop
toward stable, free governments with the will and ability to resist
Communism from within and without, and to contribute to the strengthen-
ing of the Free World. (NSC 51105, Paragraph 10.)
The Manila Pact Conference substantially furthered the
achievement of these objectives, although at this early date the
furtherance is largely psychological. The working groups which will
meet as a result of discussions at Bangkok, however, should in time
produce specific developments of a political, economic, counter-.
subversive, and military nature which will supplement the psychologi-
cal gains already made,
2. The United States should encourage and support the spirit of
resistance among the peoples of Southeast Asia to Chinese Communist
aggression, to indigenous Communist insurrection, subversion, infil-
tration, political manipulations, and propaganda. (NSC 51105,
Paragraph.18, )
Aggression in the Treaty area has been made more difficult,
It has been made clear to the potential aggressors that the member
nations not only profess the principles of correct international con-
duct as stated in the text of the Pacific Charter and the Preamble to
the Pact, but also are prepared to implement and take specific action
to put such principles into practice. The Conference statement with
regard to the Afro-Asian meeting enables the Asian members of the Manila
Pact to take a positive stand toward the Bandung meeting, The members
of the Pact are now more, aware of the relationship to their security
of the several Treaties of mutual defense and assistance signed by the
United States with Korea, Formosa, Japan, Philippines, Australia, and
New Zealand. They better understand the nature of U1.So :ailta:y ? power
in the Par Last and. its role In the defense of their countries.
Subversion has for the first time been publicly recognized
and discussed as a common problem in an international forum. Exchange
of information between the participants at Bangkok has demonstrated
the common threat posed to each. Presentation by the Philippine
Government of the details of its successful campaign against subver-
sion has demonstrated that such subversion can be dealt with when and
if imaginative and energetic steps are taken.
3. The United States should demonstrate to the indigenous govern-
ments of Southeast Asia that their best interests lie in greater
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cooperation and closer affiliation with the nations of the Free Wvprld?
(NSC 5405, Paragraph ll.)
Cooperation among the Treaty members, with a view to reaching
agreement on specific problems, has been initiated through this Con-
ference. The basis for such cooperation has been lacking in the past,
and few Southeast Asian nations have had experience in solving problems
through mutual effort. The continuing associations set up at Bangkok
to deal with specific political, military, subversive, and economic
problems should stimulate the habit of cooperation and the inter-
relationship initiated by the meeting of Foreign Ministers, It is
anticipated that as the various working groups meet and work together
over the next months, the conference method for solving pressing and
difficult international problems will become habitual, It will be of
prime importance, therefore, for these working groups to produce courses
of action which appear to be of a substantial and effective nature,
in order that the device of multilateral cooperation will prove itself
to each participants
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March 24, 1955
SUPPLEMENT TO PROGRESS REPORT ON NSC 5405 (SOUTHEAST ASIA)
SUMMARY OF DEVELOPMENTS IN INDOCHINA
(Ref: NSC 5429%2 and NSC 54295; Period Aug. 20, 1954
through March 15, 1955)
Aa MAJOR ACTIONS
1. In accordance with the recommendations formulated by General
J. Lawton Collins pursuant to the frame of reference approved by the
President for him as his special representative in Viet-.Nam, the U.Sb
has;
.a. vigorously supported the government of Prime Minister Diem
in Viet-nam;
b. formulated force goals and secured their acceptance as
modified;
c. agreed on economic aid, direct defense support, technical
assistance and informational programs;
d. made budgetary determinations totalling 014.3 million
for FY 1955, under Section 121 of the Mutual Security Act of
1954 for military and economic programs for Viet-nam;
es encouraged political and economic reforms;
f. reached agreement with the French and Vietnamese on U.S.
training of the Vietnamese National Army under which the U.S.
undertook direction of training on February 12;
go initiated direct aid; and,
through government level negotiations has attempted, without success,
to reach complete U.S.-French agreement on policies in respect to
Viet-Nam, particularly with respect to full French support of Diem in
Free Viet-Nam and regarding French economic policies toward the Viet
Minh. There is evidence of a renewed campaign against Diem, involving
French press stories describing "civil war" and other deterioration which
,is only partially supported by the facts reported by Embassy Saigon, The
recent declaration of the Sects on March 4 indicates a desperation on
their part as French funds have been stopped and Diem is curtailing
supplies to limit the Sects military capacity.
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2, The U.S. Navy sea-lift evacuated approximately 200,000
Vietnamese civilians from Haiphong to Free Viet-Nam.
3. In Cambodia, direct economic aid continues; final agreement
has not been reached on U.S. training of the Khmer forces although
force goals have been approved by the JCS; $42,2 million allotted
for FY 1955 but no disbursement made. The MUG bilateral is expected
to be signed about March 30, with the question of U.S, training left
open,
Lt, Progress has been more limited in Laos, where direct aid has
started, dire to the limitations of the Geneva agreements; $53.3 million
allotted for FY 1955. The organization and responsibilities of the
country team have been agreed to.
5. Seven additional helicopters and six light aircraft were
shipped from Japan March 12 to the French for International Control
Commission use especially in Laos.
6, The information program, formerly centralized in Saigon,
now operates in Vietnam, Laos and Cambodia. Program expansion from
$1,300,000 to about $$2,500,000 in February 1955 emphasizes provincial
activities to stimulate and organize anti-communist and pro-government
support, In addition to pamphlets, leaflets and posters, documentary
motion picture production and distribution is being increased sig-
nificantly,
Be MAJOR OUTSTANDING PROBLFMS
Bilateral talks are to be held with the French probably mid-April
in Washington to consider the following problems:
1. The equivocal nature of French policy towards Viet-Nam, e.g.,
attempted and possible accommodation with the Viet Minh, replacement
of Diem by a more pliant figure, makes for continuing difficulties.
It does not appear likely that this 'ench attitude policy will change
under M. Faure.
2. The conflict between Diem and the sects was characterized by
resolution by Diem not to give in to the sects' demands for more money
or additional positions of power(they now have eight Cabinet and sub-
Cabinet posts plus the control of the National Police); and by the
announcement by the sects that unless Diem satisfied their demands by
March 25, they would cause trouble.
French suggestions that the U.S. join in pressures on Bao Dai
to cause his return to Saigon as a mediator were refused by the U.S.
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3. U.S.-French differences are at present unresolved with respect
to whether France or U.S. will exercise training responsibility of
Cambodian forces. The Secretary of State's compromise formula,
approved by the President, has been given to the French and Cambodians
for study. French reaction is unfavorable#
4. The internal political situation in Laos continues to be
alarming because of the soft attitude of the Lao Government toward the
Communist Pathet Lao and the inability of the Royal Government to
reassert its authority in the two northernmost provinces.
5. Individual decisions by the powers signatory to the Protocol
to the Manila Pact are required to supplement the limited effectiveness
of the non-communist forces in Indochina as in the other parts of the
Treaty Area against overt communist aggression or subversion.
6. The International Control Commission in each of the countries
retains on balance a tendency to favor the communists, largely because
of failure to take effective action on Viet Minh/Pathet Lao violations
and because of the usual delaying tactics by the Poles and to a lesser
extent by the hyper-neutralist attitude of the Indians.
7o Elections (See C. 1., below).
C. POLICY DEVELOPMENTS
1. In NSC Action No. 1316, the NSC reaffirmed paragraph 1Oa of
NSC 5429/5 and noted that the Department of State will within two
months (by April 3, 1955) prepare for the Council and the President
policy recommendations in respect to Vietnamese elections scheduled for
July 1956 under the terms of the Geneva agreements. General Collins'
recommendations have been requested and the Department of State has
produced several preliminary studies on this subject.
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GUIDE TO DIFFERENCES BETWEEN THESE REPORTS
ARID THE DRAFTS DATED MARCH 15, 1955
I. Progress Report on NSC 5405:
Part C. Par. 9 (page 3) line 2, word change.
Fart C, Par. 11 (page 45. line 10, "under PL 480" added.
II. Attachment - Summary of,Deyelonments at Feb. 23 Bankok Conference:
Par. 2 (page 1), line 14, word change.
Par. 2 (page 1), line 17, word added.
III. Supplement - Summary of Developments in Indochina:
Part A, Par. 1 (page 1) 4th from last line, Word change.
Fart A, Par. 2 (page 2) new paragraph.
Fart A, Par. 3 (page 2) last sentence deleted.
Fart A, Par. 4 (page 2) last.. sentence revised.
Part A, Par. 5 (page 2) revised..
Part A, Par. 6 (page 2) new paragraph.
Part B, (page 2) first sentence, word change.
Fart B, Par. 2 (page 2) new paragraph.
Part P, Par. 3 (page 3) paragraph revised.
Part E, Par. 6 (page 3) line 3, word added
Part B, Far. 6 (page 3) line 5, phrase added.
Part C, Par. 1, (page 3) lines 1 and 2 revised.
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