NIE 63.1-55 PROBABLE DEVELOPMENTS IN NORTH VIETNAM TO JULY 1956

Created: 7/19/1955

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national intelligence estimate

(Supersedes Portions ofn North Vietnam)

PROBABLE DEVELOPMENTS IN NORTH VIETNAM TO6

Submitted by the

DIRECTOR OF CENTRA I, INTELLIGENCE

and the Intel State, the Am

The follcnclng intelligence organizations, participated in the preparation of this estimate: The Central intelligence Agency

iDVISORY COMMtTTKI

ononcurring tears Me Special Assistant. Intel- Department of State; the Assistant Chief of Staff, epartment of the Army; the. Director of

genet: tht Director of Intelligence, USAF; and the Deputy irector for Intelligence. The Joint Staff. The Atomic Energy Commission Representative to the IAC, end the Anittunt to the Director, Federal Bureau of Investigation, abstained, the subject being outside of their jurisdiction

itfhe Joint Staff.

NO. ASSISTANT DIflECTOR,ONE

PROBABLE DEVELOPMENTS IN NORTH VIETNAM TO6

{Supersedes Portions ofn North Vietnam) THE PROBLEM

To analyze the present strengths and weaknesses of North Vietnam and toprobable future developments and trends to

CONCLUSIONS

The immediate concern of theRepublic of Vietnam" (DRV) is to consolidate its control in the area north ofh Parallel and to gain control of South Vietnam.

2 We believe that the DRV willno great difficulty in maintaining effective control of North Vietnam during the period of this estimate andonsiderable measure of prestige and general acceptance.passive resistance and discontent resulting from harsh control measures and poor economic conditions maytoward the end of the period. If the situation in the South does notthe nationalist appeal of Ho Chi Minh and the DRV will probably bethroughout Vietnam.

he DRV is confronted by seriousproblems of which the current rice shortage is the most critical. Its present export potential falls far short ofsufficient funds to pay forimports. However, the Sino-Soviet Bloc will almost certainly provideeconomic and technical assistance to meet minimum requirements forand control. With such assistance the DRV will probably make gradual progress in gaining control of theand in rehabilitatingirrigation, and industrial facilities.)

Since the Geneva Conference, the strength of the DRV regular army has been increased substantially by drawing on regional forces to form new units and by the receipt of new and heavierequipment from Communist China. DRV forces are capable of defeating all military forces, including the French, now located in South Vietnam, Laos, and Cambodia. )

The present DRV tactic with respect to South Vietnam is to pose as the champion of Vietnamese independence and unification, and as the defender of

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provisions of the Genevahe DRV probably still believes that it could emerge from free nationwidewith control of all Vietnam. It will attempt to appear reasonable in anyconcerning procedures forWhile the Communists almost certainly would not agree to complex and elaborate safeguards and guarantees, they probably would agree to some form of "neutral" (but not UN) supervision. They would probably estimate that such election controls would work to theirin the South and, aswould not adversely affect their position in the North. )

In the meantime, the DRV willits efforts, through subversion,and propaganda, to weaken the Diem government, and to bring to power in the South men prepared toa coalition with the DRV.

The Communists in their propaganda have revealed sensitivity to theof the Manila Pact whichVietnam, Cambodia, and Laos in its area of protection. We believe thatfor Western, and particularly UStogether with generalarising from over-all Bloc policy, will prevent the DRV from openlythe South during the period of this estimate. Sirnilarly, the resumption of widespre;id guerrilla activities appears unlikely prior to the election deadline, unless the DRV should come to thethat South Vietnam can be won

'For an estimate or probable developments tn South Vietnam, senProbable Developments In South Vietnam Through" to be published in

only by force.onclusion would become more likely should the Diempersist in refusing to enter Uie election discussions, should electionnot proceed favorably for the DRV, or should the Diem government succeed, with US assistance, inits strength to the point ofa nationalist alternative to the Ho regime. Moreover, if during the period of this estimate little progress is made towards relaxing tensions, Peiping and Moscow might permit the DRV greater freedom of action. Should the DRV decide to use force short of open invasion, it would probably attempt to undermine the Saigon government byampaign of sabotageerror, seeking to.formatlonewmore amenable to demandsational coalition. These tactics are likely to include the activation of DRV guerrilla units now in South Vietnam and their reinforcement by the infiltration In small units of regulars from the North.

he DRV will probably refrain from launching an attack with its own forces to seize Laos during the period of thist will probably continueto convince the Royal Laotianof the propriety of the DRV attitude toward Laos, while covertly strengthening the rebel Pathet LaoThe DRV would probablyarmed units into Laos to assist the Pathet Lao if Royal government military action should seriously threaten the

'For an estimate of probable developments In Laos, seeProbable Developments In Laos Through" to be published In

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Lao position in the nortlicrn )

lie Communists now have few assets in Cambodia and will probably be unable toignificant internal threat in that country until their position isstrengthened in Laos or SouthIn the meantime, the DRV will probably continue its efforts to promote friendly relations and to secure Cambodia neutrality.

e believe the DRV will be willing to continue political and economic eontacls with the French. However, it almost certainly will be unwilling to make any agreement which in fact would permit the French to retain an economic andposition in North Vietnam.)

tlie terms of lhe Genevawith the Anal withdrawal of Frenchthe Haiphong area onregime known as theRepublic of Vietnam" (DRV) hasfullwiblllty for theof the territory of Vietnam north ofParallel,oliticalthe unification of the country.

The DRV, known also as the Viet Minh, was established at the end of Uie Second World Waroalition of Vietnamese of all political leanings drew together under the leadership ol the veteran Communist. Ho Chi Minh, and proclaimed VietnameseThe DRV openly and frequentlyits solidarity with the Slno-Soviet Blocince then any loss by the DRV of its Vietnamese support has been offsetonsiderable increase In organizational and material strength and by Uie prestige ofover French forces.

Although Uie recent assumption ofoverillion people and several large cities has confronted the DRV with major problems, these problems are notnew or unrelated to previous DRVDuring Its years of resistance, which was conducted0 with little or

'For an csUmote of probable developments in Cambodia, see. "ProbableIn Cambodia Through" to be published in

SEI no external assistance and under conditions of severe physical hardship and austerity, the DRV leadership was able to weed out the weak and timid, build an effective army, train anumber of experienced cadres and local administators, and obtain considerable experience in tlie techniques of politicalThus, when the DRV assumed control of all North Vietnamt possessedadvantages over Uie Diemin terms of military strength andorganization and sense of unity and purpose.

the immediate concern of theto consolidate Its control In the North andcontrol of South Vietnam, Its longeralmost certainly are to buildCommunist state In all Vietnam andin the extension of CommunistSoutheast Asia.

II. INTERNAL SITUATION AND TRENDS

Stability and Effectiveness of the Regime

DRV is organized on Uie normalof all Communist "peoplesthe government of the DRVrepresents all elementsunited(the Lienctual powerthe Communist party (the Laoutotal populationVietnam of someillion, theis estimated to have approximately 8members, Including the Lao Dong, which

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a membership of approximately one million.

regime Is undergoing manymodifications in order to copechanged situation resulting In hii theol the war. The clandestine shadowin the Red River delta region,was probably begunhe collapse of French-Viet MinhIs being converted Into awith overt lines ol authorityol communication. Althoughprimitiveechnological sense,appears effective. Itscharacterized by close copying ofI planning and organization.

DRV Leadership

The DRV owes its success to date In large measureohesive, adaptable, and .skilled leadership possessing long experience In the Communist movement and to the prestige acquired in Its early years as the focus of thestruggle The greatestin the leadership, as in theat large, are in technological andskllLs.

Ho Chi Minh, President of the DRV, Is probably the ultimate authority within theNo other Vietnamese currentlyhis great popular appeal among the Vietnamese as the symbol of nationalism. He also has considerable prestige in Asia and long years of contact with European as well as Asian Communist movements. The other principal DRV leaders appear to be: Vo Nguyen Olap. the capable Commander-in-Chief of the "Vietnam Peoples Army."second to Ho Chi Minh in naiional popularity; Tniong Chlnh, party secretary-general, leading theoretician, ond probably second to Ho in Hie party hierarchy; and Pham Van Dong, DRV Vice-President and Foreign Minister. All of these individuals are members of the Central Committee of the Lao Dong Parly.

There Is no reliable evidence ofat present. However, "normal"for personal power is almost certainly present within the top leadcrsliip and thereotential for disputes over suchas internal domestic policy, courses of action with respect to South Vietnam, andwith Communist China. The DRV leadership will probably remain unified throughout the period of this estimate.

Control Policies and Popular Appeal

Since the Geneva Conference the regime has been generally successful in imposing its authority throughout North Vietnam. It has employed well-known Communist control methods, including secret police operations, "peoplesnd large-scaleDRV armed lorces are far larger than necessary to maintain order and they areby experienced internal security and intelligence organ lzatlons.

Extension of the DRV's control hasbeen facilitated by the prestige andsupport which accrued to the regime from its victories over the French and by itsof an improved life for the people in the future. The flight ofiviliansmainly Roman Catholicsto the southarge portion of those people most inclined to resist Communist indoctrination. Despite shortages of food and consumer goods, the general attitude among the population is probably one of relief that the war is over and of passive acceptance of stern DRV control as the normal pattern of existence.

However, the regime will probably faceIn obtaining the cooperation of some segments of the population. The remaining Catholic population of0 may resist DRV efforts to "nationalize" the church. The substantial ethnicwho live outside the river deltas, have an ingrained dislike for all Vietnamese. Inlandlords and merchants resent the Communist regime.

Nevertheless, we believe that the regime will experience no great difficulty Ineffective control in North Vietnam during the period of the estimate, and will probablyonsiderable measure of prestige and general acceptance. Although the DRV will

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harsh measures where necessary. It will probably place emphasis on subtle and widely advertised appeals for public support through the activities of the National United Front, "patriotic" religious conferences,area" governments, and other programs composed primarily of nationalist slogans and appeals- However. [Missive resistance and discontent due to harsh control measures and poor economic conditions may increase toward the end of the period. Providing the situation in the South has not deteriorated, theappeal of Ho Chi Minh and the DRV will probably be reduced throughout Vietnam.

Economic Policies and Courses of Action

The DRV Is eonlronted by seriousproblems of which the current rice shortage is the most critical. Priorhe annual rice deficit of Northetric tons.esult of serious crop failures the shortfall of rice in the cropncreased to anetric tons. The DRV has obtainedew small shipments of rice from South Vietnam, formerly its principal source of supplementary supply, and at0 tons from Communist China. Despite rationing and other control measures, rice prices in Hanoi have doubled since theoccupation, and current reserves are low. Since the spring harvest appears to have beenarge portion of the population in North Vietnam may face conditionsfamine this summer and fall unless substantial quantities of rice arc Imported.

Tlie DRV must also dealeficit in its balance of paymentsituation which has been chronic to the North Vietnam area. The regime must import substantial quantities of textiles, capital goods, military equipment, and petroleum Supplies ofmanufactured goods will probably be less than4 because the regime lacks trained manpower to operate efficiently the textile mills at Nam Dinh und Haiphong, the cement plant at Haiphong, and other enterprisesoperated by the French. In view ofrequirements import needs are unlikely to be less than before the Geneva

Agreements when annual imports into the area now held by the Communists totaled abouthe DRV, however, is incapable of financing large-scale imports from its own resources. Maximum exportsincludingetric tons of coal, lesser amounts of cement and raw materialscould earn only about

To assist in meeting this problem, the DRV has been negotiating with the Sino-Soviet Bloc for technical and economicInommunist China agreed to supply the necessary equipment and trained personnel to assist in the restoration of railroads, highways, telecommunications, meteorological services, and waterprojects. Transportation, manufacturing, and other fields of activity In North Vietnam will probably receive long-term support from Communist China. The Chinese Communists have recentyrant of roughly0ortion of this may cover assistance already provided. EastPoland, and the Soviet Union have also promised to send needed equipment,and technicians to assist tn training DRV personnel. The USSR has negotiated with Burma for surplus rice which may be shipped to the DRV. We believe that the Bloc will, in any event, provide emergency economic assistance sufficient to avert any serious threat to the stability of the DRV.

Although the DRV appears to beits trading relations mainly with the Bloc, it has made overtures to South Vietnam for the resumption of economic relations and has attempted to convince the French thatprofitable trade Is possible. Although political considerations predominated In these instances, the DRV certainly realized that it could obtain economic benefits from trade with South Vietnam and France.

The rapid rehabilitation of transportation and irrigation facilities, which has been the principal accomplishments of the regime in recent montlis, demonstrated the DRVsto mobilize large pools of unskilledIt also indicates the receipt of fairly substantial economic and technical assistance

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Bloc countries. The most significant achievement was the restoration in only four months ofile Hanoi-Dong Dang narrow-gauge railroad line which connects with the Chinese Communist rail net.of the Hanoi-Lao Kay and Hanoi-Nam Dinh lines, now underway and scheduled for completionill further facilitate the distribution of military and economicreceived from Communist China. If the relatively rapid rehabilitation of irrigationis sustained, food output should be substantially raisedew years.

The DRV haseries ofmeasures designed to enhance itscontrol. To increase peasant support for the regime, the DRV has pressed its program of land confiscation and rent reductions. Nevertheless, paddy taxes have not been lowered and continue lo absorbf the output. Heavy new sales andtaxes have been levied on merchants. The scope of private trade has also been diminished through the establishment of wholesale and retail outlets operated by the regime, and further limitations are in

The DRV probably will continue to make gradual economic progress during the period of this estimate. With continued assistance from the Sino-Soviet Bloc, which will almost certainly be forthcoming the DRV willbe able to meet minimum requirements for foodstuffs and cloth. They will also be able to rehabilitate further theirand industrial facilities. Therefore, wc believe that economic deficiencies will not seriously threaten the stability of the DRV during the period of this estimate.

Trends in Military Strength

Geneva, the Viet Minh armyconsiderable reorganization andhas been greatly Increased.army estimated to totalthe bulk of which are organizedinfantryrtillery divisions,groupment, andnfantrythese atnfantry divisions,division, andnfantrybeen activated since the summerlthough regular army strength has increased0 over the totalear ago, the over-all strength of the armed forces remains about the same, since the regular forces were built up by drawing men from Regional and Popular units. Regional and Popular troop strengths are estimated to00ecline of someercent from pre-Geneva strengths of each organization.

The substantial increase in firepower and mobility of DRV units is primarily the result of large-scale shipments of new arms,and other military equipment from Communist China. The volume of theseincreased markedly in4 and continuedigh rate until last November. Little information is available on the flow of supplies since November. Sinceany of the shipments have violated the Geneva Agreements. There is no firmthat the Viet Minh have received armored vehicles.

There is no evidence that the DRV hasavy or an air force. At present, the DRV "navy" consists ofenotorboats operating as aof the army. There are unconfirmed reports that the Chinese Communists are training DRV personnel preliminary to the creationRV air force, but we have no evidence that the DRV possesses any aircraft or air organization.

Since the cessation of hostilities, the DRV has embarked on an extensive trainingdesigned to improve the militaryof units and individuals, and to assure their loyalty to the regime. Although there have been occasional desertions andthese have not assumed significant

DRV armed forces currently are capable of maintaining control over the area north ofh Parallel, and or" defeating theforces, including the French, now located south ofh Parallel. They arc also capable of overrunning Laosonventional military operation or of providing sufficient logistic support and guerrilla units to enable

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Communist military forces in Laos tothe northern provinces and other parts of the country remote from main lines of communication.

The DRV almosi certainly will maintain the superiority of its armed forces induring the period of this estimate. There will probably be no significant increase in DRV armed numerical strength during the nextonths, but continuation of tlieand training program willits over-all military potential.

We believe that there may be as many0 armed Viet Minh personnel remaining in South Vietnam. Thoy ore probablyas cadres and skeletal units. Theof these units and their ability to expand through local recruitment will depend in large measure on lhe political appeal of Diem and the effectiveness of his government.

xternal relations and policies

Since4 Geneva Conference, the DHVs foreign policy appears to have had the following major objectives:he international stature of the DRV; (b) strengthening ties with the WorldBloc;nnipltshing theof South and North Vietnam;he Pathet Lan strongholds in two Laotian provinces, and expanding Communistin both laos nnd Cambodia with the eventual aim of absorbing both theseinto the Communist Bloc; andriendly relations with the Asiannations on the basis of the "Five Principles" of peaceful coexistence.

In the past few months, the DRV hasits international stature in the non-Communist world. Three non-Communist nationsIndia. Indonesia, and Pakistangranted It de facto diplomaticIn addition, sincehe French have maintained Jean Salnteny as "special representative" to the DRV, and India and Great Britain have established consulates in Hanoi Prime Minister Nehru of Indiaoodwill stop in Hanoi Innd Vice President Pham Van Dong of the DRV returned Nehru's visit in5 In laterimeu of Burmaoodwill trip to the DRV. DRV participation in the Bandung Conference was further evidence of its status as anslate.

Relations with the Sino-Soviet Bloc

We believe that the DRV Is firmlyto the policies of the Sino-Sovtet Bloc, even to the extent of subordinating orthe pursuit of its local or regionalIn the interest of over-all Bloc tactics and strategy. The attitude of DRVfollows from its Communtst worldand from the fact that DRV objectives can only be realized with Sino-Soviet Bloc support.

To date both Peiping and Moscow have participated in formulating DRV policies. The DRV has publicly acknowledged that the Soviet Union is the leading power in theCommunist movement. Officialhave also acknowledged dependence on the Chinese Communists in the fields of ideology and military strategy. Important DRV legislation such as the basic agrarian reform law Ls modeled closely after earlyCommunist measures. DRV leaders have frequently compared their own progress with various stages in Communist China's development

Contacts between the DRV and theCommunists have become significant only since the Communist Chinese troops reached the Indochinese border Ineginninghe Chineseassisted the Viet Minh by furnishing military supplies in increasing quantities, training thousands of military personnel in Soulh China, and providing advisors onpolitical, and economic matters. At the present time, large numbers of Chinesetechnicians are in North Vietnam to assist the DRV In Improving transportation and communication facilities. It Is probable that economic assistance from both the Soviet Union and Communist China will beand perhaps increased

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its close ties with andPeiping and Moscow, the DRV appearsgreater latitude In its actionsumber ofaccount for UiU special status. Thefought its own fight againstThe DRV possesses an armyorganization developedSino-Soviet material assistance priorFinally, the DRV can play anrole in furthering Bloc Interests inif permitted the appearance

Policies Toward Vietnam

Since the Geneva Agreement, DRV policy toward South Vietnam has aimed primarily at preventing the formation of on effectiveVietnamese government and atCommunist control throughelections, subversion, or other means short of open invasion. Thr DRV Isto pose as the champion of Vietnameseand unification. It hashow of adhering to the Geneva Agreement, and has attempted In various ways to insure French supjxirl for the election provisions of the Agreement. The DRV endorsed theof the Binh Xuycn<ontrolled "United Front of the Sects" which the Viet Minh radio blessed as "working with the people" for the overthrow of Diem. In addition, the DRV has called for lhc resumption of "normal and peaceful" relations between tho two zones of Vietnam as rapidly as possible. Thisfor normal relations, which the DRV probably hope will leadoalitionfor the whole of Vietnam even prior to electionsas intensified in March and April with repeated concrete proposals to the Vietnamese government for economic and cultural exchanges.

Throughout the period of this estimate DRV policies with respect to South Vietnam and national elections will be conditioned by the requirements of Bloc strategy in Asia and by DRV estimates of the prospects for peaceful unificationommunist-controlled re gime. The DRV probobly still believes that it could emerge from free nationwide elections with control of all Vietnam. The DRV, with Bloc support, has been insisting thatconcerning elections begin onuly as specified In the Genera Agreement. If the consultations get underway the DRV will attempt to appear reasonable with respect lo electionill seek to develop Indian. French, and UK pressures for holding elections. The Communtsts almost certainly would not agree to complex and eluborateand guarantees, including neutralover the movements of police and military forcesonsiderable lime prior to and after the elections. Nevertheless, they probably would agree to some form of "free elections" under "neutral" but not UNTheir willingness to consent to some guarantees for "free elections" wouldbe reinforced by an estimate thai such controls would work to their advantage In the South and. as manipulated, would notaffect their position in the North.

'I"he DRVs ostensibly peaceful rolewill not prevent continued efforts toand subvert the Vietnamesepolitical organizations, and sects. The Communists will seek to bring to power In Southovernment which would be willing to Join with the North inational government prior lo generalFailing this, they will seek to prevent the developmenttrong and effective government in the South which could offer the Vietnamese people an attractive nationalist alternative to the Ho regime.

The Communists in their propaganda have revealed sensitivity to the implication of the Manila Pact which Incorporated Vietnam, Cambodia, and Laos in its area of protection. We believe that concern for Western, andUS reactions, together with general considerations arising from overall Blocwill prevent the DRV from openly invading the South during the period of this estimate. Similarly Uie resumption of widespreadactivities appears unlikely prior to the election deadline, unless the DRV should come to the conclusion that South Vietnam can be won only by force.onclusion would become more likely should the Diem

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persist in refusing to enter the election discussions, should electionnot proceed favorably for the DHV, or should the Diem government succeed with US assistance, In consolidating its strength to the point ofationalist alternative to the Ho regime. Moreover, if during the period of this estimate little progress is made towards relaxing tensions, Peiping and Moscow might permit the DHV greater freedom of action. Should the DHV decide to use force short of open invasinn,ould probably attempt to undermine the Saigon government bya campaign of sabotage and terror, seeking the formationew government more amenable to demandsational coalition. These tactics are likely to include tlieof DRV guerrilla units now in Southand their reinforcement by theIn small units of regulars irom the North.

Policies Toward Laos

igh on the list of DRV objectives is the establishmentommunist government in Laos. Control of this area would greatly facilitate Communist penetrations of South Vietnam, Cambodia, and Thailand. DRV operations in Laos are facilitated byommunist movement, the Pathet Lao, which Is largely the creation and puppet of the Viet Minh. The DRV has covertlymaterial and technical assistance to the Pathet Laot has supported the Pathct Lao claim that the Genevagranted it administrative control over the Laotian provinces of Sam Neua and Phong Saly. It has also supported the Pathet Lao proposal for the establishmentJointcouncil" composed of representatives of the Royal Iaotian government and of the Pathet Laots objective probably is the creationoalition governmentterms favorable to the Palhct lao. At the same time, the DRV has sought tothe Royal Laotian government that the Pathet Lao Isuppet of the Viet Minh. To this end, DRV Foreign Minister Dongthe laotian Prime Minister, while at Bandung, that the DRV considered the Pathct Lao an internal Laotian problem which should be settled by the Laotians themselves.

the period of this estimate,Minh will probably continue theirof officially seeking lo developwith the Royal Laotiancontinuing their covert effortsthe Palhel Lao. The DRVwill not launch an attack withforces to seizr Laos, and itajor Pathet Lao guerrillaagainst the Laotian,If lhe Royal Laotianundertake military action whichthreatened the position of theIn the two northern provinces lheprobably inflltrale Viet Minh unitsthe Pathet Lao.

Policies Toward Cambodia

the achievement of objectivesand Laos and pendingtronger CommunistCambodia, the Vict Minh will probablyon fostering CambodianDRV has professed friendship forCambodian government, andlo have withdrawn all DRVfrom Cambodia. II has ceased itsattacks against the Royalapparently hasutualof support of the "Five Principles" bygovernments Nevertheless, the DRVcontmuing its efforts to developstrength in Cambodia, althoughIt appears to have made little progress.

Relations with France

DRV policy towards France has apparently been designed to encourage the French to give full support for holding electionso reduce French support for agovernment in Vietnam, and to createbetween French and US policy. The DRV, while almost certainly aiming at the eventual elimination of French Influence in all of Vietnam, has played upon the French desire to retain an economic and cultural role in that area.

The Communist apparcnOy Impressed the French at the Ocncva Conference by

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moderation. In an exchange of letters between Vict Minh Prime Minister Pham Van Dong and Premier Mendcs-France, Uie DRV Indicated agreement in principle to theof French economic and culturalnorth ofh Parallel. Many French believed that the DRV. because of its difficult economic situation and itsreluctance to rely solely on China, might be sincere In its desire to sec the Frenchtheir economic and cultural institutions In the country. Some French officials also believedonciliatory policy would lead the Viet Minh to loosen Its ties with the Slno-Sovlet Bloc.

owever. Uie French have had littlein retaining their economic position In NorUi Vietnam and there ure no indications of any significant expansion of trade between France and North Vietnam. French business enterprises were reluctant to maintain their Capital investment in the area withoutfrom their government. Sainteny and (its government endeavored to pushlan for the establishment of Jointly owned companies in which the French government would provide capital and control ofThis plan was subsequenUy abandoned because of strong US opposition and probably because of the DRV's refusal to leaveIn French liands.esult. Uie Cftarbonnaoes du Tonkin, which was being usedest case, was sold to the DRV for one million tons of coal, (presently worthillion francs) payable overears by annual allocations. The French, moreover, agreed to maintainrechnicians in Uie DRV-owned company to assist production.

he French now appear aware that there is little possibility of maintaining Investments and cultural establishments In North Vietnam. The French government has expressedwith the results of Uie Sainteny mission and hove hinted that It will beIn the event that Sainteny himself should relinquish Uie assignment.It has felt compelled to continuewith Uie DRV because or domesticpressures and because il believes thatourse offers additional guarantees ugainst the recurrence of hostilities while the French Expeditionary Forces are still In Indochina

owever, in their dealings with the DRV, the French have been careful to avoid giving the appearance of political support to the regime. They appear to have resisted DRV attempts toelegate-general to Paris They have worked lo facilitate the emigration of non-Communist elements to South Vietnam and have supported requests for an extension of Uie time limit allowed for North Vietnam refugees to move to Uie SouUi. Finally, they have been careful to avoidthe US and In such matters as the removal of US equipment from Uie C'nar-bonnages du Tonkin and abandonment of plans for governmenl participation in mixed companies, and they have placed greateron maintaining their tics with the US than on supporting their economic atnblUons in North Vietnam.

The DRV almost certainly will be willing to continue to negotiate wiUi France, hoping thereby to exacerbate US-French relations and to prevent all-out French support for Uie non-Communist Vietnamese government in the South. However, the DRV almostwill be unwilling to make anywhich In fact would permit the French to retain an economic and cultural position In North Vietnam.

In regard to elections, the primary concern of Uie French government will be to avoid the development of an impasse that would result in renewed hostilities and the Involvement of its forces. It will probably Insist that elections be held as scheduled but is likely to strive for arrangements that will at least delay direct DRV control over the South.

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