The Tangled Web: America, France and Indochina 1947-50

American involvement in Vietnam is well-charted territory.  The emotional impact of the war on a generation of Americans and Europeans, its continued impact  on American politics and the office of the President, and the lessons it yields to contemporary American policy have made it an attractive subject for historians. The interpretation of the causes of US involvement in the war is one of the fault lines that separates orthodox and post-revisionist Cold War observers from revisionist or radical ones. To many, the Vietnam War defines their view of the nature of US international policy.

Given the complexity of an issue such as the Indochinese Wars, it seems unlikely that a clear pattern of cause and effect can exist. However, approaching the early stages of American commitment to the region from a European perspective provides an interesting angle on US policy towards Indochina. European issues in the early postwar period were of vital importance to the subsequent involvement of America in Indochina, first through France’s struggle to keep its colony, and later in the Vietnamese civil war itself.

In particular, the Marshall Plan, which provided Western European countries with aid and a framework for European co-operation during the years 1947-50, played a vital role in the development of US policy towards Indochina. Washington needed French co-operation in the reconstruction of Western Europe along US policy lines, and this requirement made it impossible for the US to condemn or attempt to alter French policy in Indochina. By 1949 the US had become committed to keeping Communism out of Southeast Asia within its own Cold War strategy. This pushed the US to pour money and aid into the hopeless French attempt to keep its imperial possession. By the time the French abandoned the effort after the catastrophic defeat at Dien Bien Phu (1954), the US was financing 80 per cent of the French war effort, and had committed itself financially, politically and emotionally to preventing a Communist victory there.

In 1945-47, the Soviet presence in Eastern Europe, the strength of Communist movements in France and Italy, and disagreements among the allies over the future of Germany suggested that it was in Europe that the United States would have to resist Communism.

During the first half of 1947, the Truman administration began defining its policy priorities, and the best means of strengthening the non-Communist areas of the world against the USSR. The  State Department’s head of long-term planning,  George Kennan, in his Long Telegram from Moscow, defined the threat. The State Department and Kennan’s Policy Planning Staff identified the means of resistance, which Secretary of State George Marshall made public in a landmark speech on June 5th, 1947.

The means of resistance consisted of a programme of aid centred on Western Europe that would remove the economic conditions that fostered Communism, help create a liberalised system of global trade, and provide the necessary foundations for rearmament should such a step prove necessary. The aim was to create a stable and productive Europe, whose economic and security needs would be tied together by market forces and liberalised trade, and guided by strong supranational organisations. 

At this stage, Indochina itself was of little importance to the US State Department; France, however, was vital to the European recovery effort. The Marshall Plan depended on the effective revitalisation of its industry and the maximisation of its material and human resources. France was also politically pivotal as, without its co-operation, Western Europe would not allow the industrial reconstruction of Germany.

The State Department believed Europe could not become a strong and stable economic force without full German rehabilitation, and that the Plan would make German reconstruction possible by absorbing it into a wider framework of Western European co-operation. But if France was key to Europe’s acceptance of German rehabilitation and reconstruction, the war in Indochina was a major obstacle jeopardising the achievement of these goals.

France had ruled the Indochinese states of Laos, Cambodia and Vietnam since the late nineteenth century. The oppressive nature of French rule helped sow the seeds of rebellion. In August 1945, the most prominent independence movement, the Viet Minh, seized power and proclaimed Vietnamese independence. Fighting between Vietnamese rebels and French forces escalated into full-blown conflict in December 1946.

During the Second World War, President Roosevelt and Ho Chi Minh had been united in their desire to end French colonial rule. Ho was convinced that the US would support his fight for the freedom they had battled for in ‘their own heroic struggle for independence’. Roosevelt had been determined not to let the French take back the colony they had lost to the Japanese. Like many Americans imbued with a strong sense of anti-colonialism, he disliked the ‘poor colonizers’ who had ‘badly managed’ Indochina, and felt that it was time for the US to accept the forces of nationalism in Asia, while preserving access to the region’s wealth of raw materials.

Within the climate of the emerging Cold War, however, the importance of rebuilding Western Europe overshadowed America’s concern for nationalist movements. In 1946 and 1947, American priorities in the developing world began to shift from anti-colonialism to anti-Communism. Historians still debate whether or not Ho was fundamentally a nationalist or a Communist, in an effort to condemn or justify American policy. Certainly, neither officials in Saigon nor the Secretary of State himself could find links between Ho and the Kremlin. By 1949, however, the State Department had decided that the issue was irrelevant: ‘all Stalinists in colonial areas are nationalists’. With their nationalist aims achieved, their objective ‘necessarily becomes subordination of state to Commie [sic] purposes.’

The Indochinese war threatened the success of the Marshall Plan by damaging the French economy, and weakening the position of the government. The drain on France’s resources inhibited the reconstruction effort and channelled funds out of the country. The effect on France’s political stability threatened the continuation of the Marshall Plan, and the achievement of American aims with regard to Germany and Western Europe as a whole.

By 1949, the Indochinese war was the greatest financial burden on the French economy. By autumn of 1952 the war had cost the French one trillion French francs, twice the amount of Marshall Aid to France during the same period. Adding to this was the loss of Indochina as one of France’s most profitable colonies from trade in rubber and pepper.

Franco-American co-operation required political stability and a strong, centrist government in Paris. This was a difficult requirement. The Fourth Republic was unstable, changing government twenty-seven times between 1946 and 1958. French politics was torn between socialist and Communist groups on one side, and the supporters of Charles de Gaulle on the other. Both had strong public support and used the war in Indochina to attack the government. Public opinion was divided between its desire to maintain the glory associated with empire, and concern that the conflict in Indochina was unjustified and could not be won.

 In the immediate postwar years, however, the empire seemed indispensable to French prestige. Imperial power was the link to France’s more glorious past, and the key to moving beyond the humiliation of German occupation and Vichy collaboration. As France’s most valuable colony, Indochina became representative of France’s quest to regain world status. It also became representative of France’s position on the rest of its colonies. As the Governor General in Algeria warned: negotiation with Ho Chi Minh meant negotiation in Madagascar and Algeria.

To France, the war therefore became a campaign of national status, and failure could send the country into turmoil. The US wanted France to seek a solution in Indochina that would cater to non-Communist nationalists and allow France to curb the drain on its economy. But Washington could not conceive ‘setbacks to long-range interests of France which would not also be setbacks to our own’. And as the British reminded the Americans, it was not worth the risk, ‘in winning Vietnam … to lose France’. Despite the United States’ desire for France to seek a political solution in Indochina, Washington could not oppose French actions as long as Western European recovery remained its priority.

The importance of Indochina to French political stability was clear to Dean Acheson, when he became Secretary of State in 1949:

We have an immediate interest in maintaining in power a friendly French government to assist in the furtherance of our aims in Europe. This immediate and vital interest has in consequence taken precedence over active steps looking towards the realisation of our aims in Indochina.

The US did not provide direct assistance to the French in Indochina through the Marshall Plan, although aid was extended to a number of European dependencies, and to French colonies in North Africa. The exclusion of Indochina in this way reflected the uncertainty of America’s position on the issue, and Washington’s reluctance to appear as a sponsor of colonialism.

To French prime minister Bidault, Marshall Aid was nevertheless a blessing that would allow him to ‘avoid the abandonment of French positions’. European Recovery Program (ERP) appropriations let France finance the war in Indochina at the expense of domestic reconstruction projects favoured by the European Cooperation Administration, the body in charge of administering Marshall Aid. As George Kennan noted:

As we do not contribute ERP aid directly to Indochina, the charges are being passed on to us in Europe.

The lack of historical research on the direct or indirect use of ERP funds by France to pursue its policy in Indochina makes it difficult to assess Washington’s attitude to the issue. Some historians of America’s involvement in Vietnam believe that Washington was ‘willing and happy to look the other way while France used Marshall Aid to fight a colonial war’. Their analysis coloured by subsequent events, they seem to imply that Washington made a decision to use Marshall Aid as a means of supporting France in Indochina without official commitment to French policy. There does not seem, however, to be sufficient evidence of such a decision in Washington.

It was clear, though, that it would have been difficult for France to accept the burden of war without the Marshall Plan. The billions of dollars France received from the US, therefore, indirectly helped finance the campaign in Indochina, while constituting a significant drain on the Marshall Plan. Resources that should have gone to projects stimulating the French economy were used to finance the war.

The emergence of hostility between the United States and the Soviet Union had brought with it profound changes to the way the US prioritised its foreign policy. Movements of national self-determination were now viewed through the prism of anti-Soviet concerns; Southeast Asian problems could no longer be evaluated without European issues. The Cold War shaped American policy into a global web of economic and security issues, tied together by fear of Communism and the urgency of securing access to markets and strategic commodities. Between 1947 and 1949, the State Department struggled to make sense of the contradictions posed by this view of the world. Indochina was particularly difficult.

Washington acknowledged the importance of the colony to France, and therefore to the ERP; it also accepted the danger of Communist power spreading through Southeast Asia. But most American policy-makers agreed that French attempts to regain Indochina by force were neither realistic nor a solution to the problem. The US favoured a solution whereby France would commit enough resources to the establishment of a viable Vietnamese state, able to maintain its own defences, while at the same time granting Vietnam the autonomy necessary to attract popular support away from Ho Chi Minh.

The ‘Bao Dai solution’ was France’s attempt to satisfy American calls for Indochinese independence under French patronage. Under the March 8th, 1949, agreements, the ex-emperor Bao Dai headed the latest in a string of Vietnamese governments that were theoretically autonomous within the framework of the French Union. Under the agreements, Bao Dai would be given little real control over the country’s foreign affairs, and other key areas of government. In the long run, however, Washington hoped the Bao Dai solution would provide the first step towards the creation of a non-communist, independent Vietnam.

American policy was contradictory, as the influential commentator Walter Lippmann explained in April 1950. The Bao Dai experiment could only succeed if the French promised future independence to Vietnam. But how could the French be persuaded to maintain their current expenditure and presence in Indochina if they were fighting to regain a colony they had promised to give away? It seemed clear to Lippmann that the French would withdraw if they had to accept such a compromise. America could not allow France to withdraw from Indochina, but nor could it sponsor a colonial war against a struggle for national independence. Lippmann could only conclude that ‘we have as yet no adequate policy in Southeast Asia’.

This dilemma was the focus of a debate within the State Department, between those who favoured the prioritisation of European issues at the expense of a strong Southeast Asian policy, and those who felt that America’s actions in Indochina could define America’s status and position in the region for good or bad. The Southeast Asian Office felt that support for France was undermining US credibility in the region and that French action was doomed to failure. They wanted France to be given an ultimatum to grant sovereignty to Indochina or lose a portion of their aid appropriations. The European department, meanwhile, emphasised the priority of Western European recovery, and France’s pivotal role in the ERP and rearmament programmes.

According to David Bruce, US Ambassador to France, aid to Indochina provided an opportunity for the US to resist Communist expansion into a vital strategic area, while at the same time helping to maintain the political stability in France necessary for the European recovery effort. Bruce’s advice was taken and the Southeast Asian desk accused him of smothering repeated warnings to France to face up to its responsibilities by granting genuine autonomy to the Vietnamese government. As they saw it, the US was now faced with the choice of accepting Communism in Indochina or ‘pouring treasure into a hopeless cause’. Kennan agreed: the United States was supporting the French in an undertaking that ‘neither they, nor we, nor both of us together can win’.

Many historians have emphasised the importance to America of open markets around the world, both to counter Communist expansion, and to support the domestic economy. With this idea came the theory of ‘capitalist-bloc multilateralism’  whereby Germany and Japan would be reconstructed into major industrial powers, linked to regional economic spheres of influence, and fuelled by Middle Eastern oil. The regional sphere of economic influence in Japan’s case was Southeast Asia, the Far East’s main source of petroleum, tin, quinine, copra, hard fibre and rubber.

While other historians have questioned the theory that economic considerations were the primary driving force in US policy, it remains clear that American interests lay, to some extent, in the creation of an open, multilateral trading system, and that the reconstruction of Japan and Germany was crucial.

Japanese economic health had always depended on its relationship to the Asian periphery. In 1947, this would have meant primary emphasis on a non-Communist China. When this ceased to be a possibility in 1949, Kennan became concerned about ‘the terrific problem of how the Japanese are going to get along [without Chinese trade] unless they again reopen some sort of empire towards the south … clearly we have got … to achieve opening up of trade possibilities … for Japan’.

Keeping an open access to Southeast Asia would allow the region to support the Western European and Japanese economies with commodities and raw materials, and provide a market for processed goods. Southeast Asia thus became economically as well as politically significant to the Marshall Plan. By 1949 production levels in Western Europe were above prewar levels, and dollar imbalances between Western Europe and America had become the main concern of the Marshall planners. With appropriations set to end in 1952, the United States and the Marshall Plan participants searched for ways to overcome Western Europe’s balance of trade deficit with the dollar area.

The Communist victory in China and worsening crises in Indochina, Burma and Malaya highlighted the urgency of strengthening the region against Communism. During the summer of 1950, the Korean War and China’s intervention against the American-led UN troops, seemed to highlight the Far East as the major Cold War battleground, with Southeast Asia the key to victory.

Southeast Asia was now seen as a vital crossroads of communications linking the non-Communist areas of India, Japan and Australia. According to the National Security Council, Indochina was the region’s ‘most strategically important’ country, whose fall would inevitably lead to the fall of the rest of Southeast Asia. This would shift the frontline of the free world back to the Philippines, destabilise Japan’s economy, and threaten the security of Southern Asia and even Australia. The loss of Southeast Asia would jeopardise American stockpiling projects. Communist control of the region would allow China to alleviate its food shortages, and help Soviet importing of key raw materials. As this early expression of the domino theory showed, France could not be allowed to withdraw from Indochina.

By 1950, State Department officials had accepted the role of Ho Chi Minh as a Communist pawn. Washington officials endeavoured to convince Congress of the urgency of the situation, and the role of the Soviets in guiding the Viet Minh leader to defeat the forces of the free world. In the words of Dean Rusk, Assistant Secretary of State for Far Eastern Affairs, this was not an ‘ordinary civil war, against colonialism’, it was:

A civil war which has been in effect captured by the Politburo and, beside, has been turned into a tool of the Politburo…. It is part of an international war and ... I don’t think we can look at it in simple terms of liberal democratic revolution.

With no alternative to France’s Bao Dai solution, the United States appeared to be faced with the choice of Communism in Indochina, or some form of neo-colonialism, and it preferred the latter. In February 1950, the US State Department made public its decision to send a ‘special mission’ to Southeast Asia to review the possibilities of extending aid to countries in the region.  Indochina was given primary importance among the Southeast Asian countries because of its geostrategic position, and the instability of conditions in Vietnam. The mission’s recommendations in June assigned $23.5 million to Indochina, with Indonesia receiving the next highest amount of aid, with $14.5 million. The Foreign Assistance Act of June 1950 formed the basis of the aid programme to Southeast Asia.

According to American propaganda, the economic programme aimed to show the people of Indochina ‘in village terms, that freedom’s ways are the best answer’. In this way, the local governments could combat the Communists who had ‘assumed the familiar but effective pose of nationalists fighting for freedom and for economic well-being’.

The outbreak of the Korean War had a significant impact on American attitudes, and reinforced Washington’s decision to send aid to the French in Indochina. To President Truman, the ‘Russian feeler in Korea is an exact imitation of Japan in Manchuria; Hitler in the Rhineland and Mussolini in Ethiopia’. As the President told prime minister Attlee, ‘the problem we were facing was part of a pattern. After Korea, it would be Indochina, then Hong Kong, then Malaya’. For policy-makers who were ‘wondering whether this is the beginning of World War III’, the North Korean invasion seemed to forecast the emergence of the Far East as the Cold War battleground. On June 27th, two days after the North Koreans moved across the 38th Parallel, Truman called for the protection of the Taiwan straits from Communist invasion, and directed an acceleration of aid to Indochina.

Events in Korea brought the Marshall Plan to a premature conclusion, and heralded a shift from economic to military assistance. The transition from reconstruction to rearmament increased the importance of French cooperation on German reintegration into the military and economic framework of Western Europe. The Korean War and the issue of rearmament tied Western Europe even more closely to US security priorities, and further broke down American distinctions of nationalism and Communism in Indochina.

American attitudes towards Indochina centred on the State Department’s inability to reconcile diverging priorities in its foreign policy. On the one hand, Washington sought to encourage non-Communist Asian nationalism within a global framework of economic multilateralism and security that would allow the region to support the core economies of the Far East and Western Europe. At the same time, however, America needed French co-operation to reconstruct a secure, integrated Western Europe that would encompass German recovery and participate in America’s conception of the global economy. Washington had to recognise that France’s empire was vital to its self-perceived status as a world power, and the achievement of US aims in Western Europe required the acceptance and support of French policy.

With the development of the Marshall Plan, Indochinese policy was evaluated by its relationship with Western European recovery. The importance of Indochina to France precluded any attempt by Washington to press for an alternative solution to Vietnamese nationalism. As an unintended consequence of the Marshall Plan, therefore, France was able to fight a hopeless war in Indochina, and enlist American support and eventual commitment to French victory.

Sami Abouzahr is an international manager with HSBC. This article is based on his undergraduate dissertation, which was joint winner of the Royal Historical Society/History Today Undergraduate Dissertation of the Year, 2004.