Free City of Saigon


Downtown Saigon, the ‘Pearl of the Orient,’ ‘Gem of the East,’ where ‘European Sophistication meets Oriental Energy to create a unique fusion'… just reading the travel brochures can give you a headache. The reality? Well the reality is that no city ever lives up to its publicity. Paris in April is rainy and grey according to reliable sources; nobody ever mentions Washington’s mosquitos in summer even though the British Foreign Office used to classify it as a Tropical (Malarial) Posting and Saigon is where Asian traffic meets wide French streets and finally finds the space to fulfil its potential. Napoleon and Violet le Duc might have driven wide boulevards though crowded tenements just in case the mob needed a whiff of grapeshot. But all a round of canister would do in modern Saigon is create a temporary traffic jam before the press of cars, trucks, vans, bicycles, Tuk-Tuk’s, motorcycles, scooters, tricycles, wheelbarrows and pedestrians laid flat by the cannon, were overwhelmed and squashed to pulp under the tide of yet more cars, vans, bicycles… you probably wouldn’t even be able to hear the ultima ratio regium over the roar of humanity and can horns.


In the last hundred years, Saigon had bowed to a number of masters; first the French who had colonized Indo-China in the late 19th century, they had given way to the Japanese, who became the Chipanese while nobody was watching, and in turn had been driven out by the Thais in 1951. Not that the Thais had hung around for long. Some people say they took one look at the place and decided it was too much bother. Then again most of those who call the Thai’s lazy haven’t seen a Thai peasant, or his modern alter-ego, a Thai businessman, move when there was a quick buck to be made. The real reason Thailand pulled back to negotiate the status of Saigon was that same ultima ratio regium. The final argument of kings might not be cast in bronze these days, but nuclear weapons and million man armies are even more ultima than Napoleon’s le belle fills which fortunately makes regio’s more conducive to a bit of sensible ratio.

Thailand might have defeated the Chipanese invasion and turned it around to gain territory, establishing what many saw as its traditional border on the Mekong. But there was no way it could ‘win’ a war against Chipan even in the early 50’s when the atomic age was still a looming mushroom cloud on the horizon for everyone but America. When push came to shove Tokyo simply had the sheer mass to overwhelm Thailand by conventional means should the situation warrant it. So Thailand quite sensibly made very certain things never reached that stage. By not pursuing the Chipanese Army over the Mekong and not claiming Saigon, they achieved their own ends and then effectively called the conflict off before things could get much too serious for anyone’s benefit.

Being magnanimous in victory and presenting a face of sensible restraint to the world might have robbed Tokyo of the justification they needed to escalate matters, but it didn’t get Bangkok off the hook. A ‘Border Incident’ could be written off as a misunderstanding, blamed on overzealous underlings, and any subsequent ‘minor’ readjustment of international boundaries could be equally shrugged off. However losing a city the size of Saigon was a very different kettle of Naam Pla. So serious a loss of face for Chipan would have been impossible to dismiss and such humiliation was intolerable. Thus Thailand could not ‘own’ Saigon, Chipan could not ‘lose’ Saigon, and Saigon was much too big to fall into any sort of polite diplomatic limbo and be forgotten about, so Saigon got its fourth and, so far, final change in government.

Like Danzig before the war or Trieste in the months after The Big One, Saigon was to become a ‘Free City’ unclaimed by any nation. It has to be said this was very much a ‘Solomon’s Choice,’ since cutting the baby in half was impossible - well unworkable anyway, but historically such independent cities have had a very sorry record in modern times. Usually it amounts to little more than a cessation of open argument until the next war clarifies ownership. However this suited both sides perfectly, whatever the residents of Saigon might have thought. Chipan wanted nothing more than to regain its lost slice of Indo-China by force of arms and the Thai’s had no problems with waiting for a war to decide the ultimate fate of their new territory and Saigon. It wasn’t that Bangkok had a death wish; they just they knew Chipan would have to win the insurgency in Vietnam before dealing with them. What insurgency? Oh the one the Thai’s were about to start of course. It usually pays to count your toes after shaking hands with a Thai on business matters.

The negotiations were held in Moscow, the Russians being about the most ‘Neutral’ power who cared to have anything to do with the matter, and like most such cases the meat of the deal had all been worked out well in advance. That’s not to say it wasn’t an easy matter to resolve. In public the main sticking point was who should be the Protecting Power. In this situation it was and is usual for a Free City to have a protecting power. Ideally and theoretically they are neutral in the matter, only acting as caretakers and guardians, providing the services of their nation-state and protecting the City from hostile neighbours. Traditionally, when the Free City business is just a matter of face saving between two parties, the role of PP is given to the nation with the best-supported claim and the ‘Free’ aspect becomes more or less a sham, this is roughly what happened in the case of Danzig. Otherwise it is usually a matter of three or more parties who decide to ‘share’ a town and they all take a slice of the action, Shanghai being a prime and germane example.

The problem with Saigon was that neither side was going to let the other do a ‘Poland’ and take sole control, nor was the prospect of Thailand and Chipan sharing power alone a viable option. If relations were not strained enough with the recent war and growing insurgency, the record of Japan’s lack of respect for such niceties in Shanghai, less than a decade before, left no one in any doubt they would seize control in a second if given half a chance. With the need to balance the power of Chipan and the unwillingness of any of the other major world powers to become directly involved, the only solution was for Thailand to bring in its partners in the Triple Alliance, to replicate, in miniature as it were, the larger regional balance of power in Asia. The resulting Four Power Agreement suited everyone, one way or another. In Chipan this public confirmation, that took the next three largest regional players combined to oppose the massed might of Japan and China, was the stuff of propaganda dreams. It allowed them to portray Saigon as an act of generosity rather than the price of a military defeat. As one cartoon of the day had it, the magnanimous Emperor feeding table scraps to the Triple Alliance chickens clucking in the dust.

For India and Australia, Saigon cemented their relationship with Thailand in a concrete way that was the foundation for all that was to follow. Prior to this the alliance was largely a theoretical entity, the two ‘Commonwealth’ nations were pledged to support one another and that support had been extended to Thailand, but each, for the most part, had its own agenda. This new common project forced the foreign policies of the three countries to align as never before. Each was still independent in both intent and practice but the on-going consultation over the city lead to an almost continuous mutual dialog between the three capitols. By taking their part in Saigon, India and Australia stepped up to the crease and took a stance next to the Thais. It marked a new phase of this commitment, that it was no longer a marriage of convenience, but rather now for better or for worse. In effect, Saigon was the practical foundation of the Triple Alliance and established the relationship that would be refined and reforged in Burma and half a dozen other hot spots, over the next decades.

However, it wasn’t a generous spirit of cooperation that induced India and Australia to put their heads on the chopping block next to Thailand, or propaganda that convinced Chipan to negotiate a peaceful settlement. To cut a long story short, it was simple bribery; the Thai’s bought everyone off and the biggest hurdle for the Moscow talks was sorting out how the cash was to be split.

Chipanese economics during the 1950’s are still largely a mystery to the outside world. Aside from a few scholarly works, and no doubt dozens of volumes and reports gathering dust in the archives of various intelligence services, the subject is both obscure and well out of the historical mainstream. What is far better known are the penurious circumstances of both India and Australia during this period. In short they were broke. Both suffered from the drain of substantial defence budgets in addition to; in India the strains of bringing a largely agrarian society into the modern world, and Australia the ongoing transition from an agricultural exporter under the British Empire to an industrial and service economy as an independent nation.

Saigon was, under normal circumstances, a substantial trading hub for both the Asian hinterland through the Mekong River and regional trade in general. As a Free City with the ability to manipulate taxes and duties, unburdened by national economics, it had the potential to become a right little gold mine and everyone knew it. Asia has always seemed to need at least one, if not two free for all trading ports. In the past Shanghai and Hong Kong filled the bill, just as Singapore and Saigon do today.

But back in the 50’s Singapore was still chained to the Federated Malay States and hampered by levels of taxation that made it nowhere near as profitable a place to do business as it later became after independence. Bangkok was still growing into its role as the regional financial capitol and probably could have taken on the trading role too, if Saigon hadn’t offered Thailand the opportunity to have its cake without fouling its own nest, to mix metaphors. Manila was in, and indeed is still in, no position to compete with anyone as a market place. The turmoil of decolonisation combined with a still largely agrarian society meant it had neither the political or economic stability needed to attract this sort of business. All of which left Saigon as a very ripe plum indeed.

Exactly how the spoils were to be divided took the four nations and the Swedish and Russian mediators the better part of half a year to thrash out. All could agree that costs should be split four ways, but profits were another matter altogether. The Triple Alliance maintained a solid front for an equal division along the lines of the cost sharing deal, 25% each after costs and other operating expenses. Chipan refused to see why she should have to pay for Thailand’s ‘cowardice’ in bringing India and Australia into the party and demanded 50% of the gross income.

In the end it came down to 30:70 of the clear profit for Chipan and the TA respectively. Twenty three point three percent was a lot better than a jab in the eye with a sharp stick for India and Australia. Thailand controlled much of the inland territory Saigon would serve so it was going to receive a great deal of direct economic benefit, whatever her share in the cities proceeds. But Chipan, well, they walked away with quite a few fringe benefits in addition to their 30% of the till.

The Free City of Saigon was established as a 25km radius from the Saigon Central Post Office. Don’t ask why they picked the post office, rather than Kilometre Post No.1 just down the street, but that’s the way it was done. This area covered both banks of the Song Saigon out to that 25km radius, but unofficially, it was agreed that the Saigon administrative area would stop on the on the far bank of the river. This meant almost half the Free Zone was still Chipanese and in effect Tokyo never had to pay their share of the ‘admission fee.’ In addition to roughly 350 square miles of land, Chipan also insisted on tax-free status for her Zaibatsu and the power of veto in the Board of Control that was to be the governing council of the new city-state.

Over the years this arrangement has drifted more and more in Chipan’s favour, even though the official ratios haven’t changed, and the Viet Minh gobbled up their ‘free’ land. This isn’t to say they have any more control over the city though, quite the opposite. Only that, in exchange for effective control of the city, the TA have, yet again, bribed Tokyo into letting them do what they want.

The Chipanese position in Saigon might have started with a bang, but it decayed rapidly into a whimper before it stabilised into a state of well-fed slumber. The four countries were represented on the initial Board of Control by three old and wise diplomats from the TA with extensive staffs and a plan they’d been hammering out behind closed doors for several months. Tokyo on the other hand, sent in the Army, in the form of General Arima Kihei.

Kihei was no foaming lunatic. Actually he came from an old aristocratic family, with a roll of distinguished service to the Emperor as long as your arm, and an ancestral sword of about the same length. Unfortunately the only code of law he was familiar with was Bushido and his only relevant experience for the job was having been a junior officer at Nanking in 1938.

History doesn’t record what Kihei thought of his fellow board members, and although one of the Indian delegation published a bit of ‘Kiss and Tell’ a few years ago, we haven’t seen the TA members opinions of Kihei in print either. I rather suspect the General was a bit annoyed at being sent out on such a ‘civilian’ job amongst the garlic eaters and Gaijin, because he seems to have taken a great deal of pleasure in making the other board members hop. Right from the start he set a very bullish tone and I don’t think it took the TA more then a few days (if not a couple of seconds) to work Kihei out and realise that resistance, like reason, would be futile.

Essentially Kihei’s plan seems to have been to squeeze Saigon mercilessly and bully the TA into letting him run the whole show. It didn’t take long before Saigon started to lose money rather then earn it, and I wouldn’t say this process was not helped along by various people who might, perchance, describe Thailand, India or Australia as ‘home.’ In ‘The Five Rings’ Musashi tells us to suppress the enemy’s useful actions, but allow, or encourage his useless ones, I can’t say if ‘The Five Rings’ was common bedside reading in diplomatic circles at the time. Perhaps ‘Stalky & Co’ was more the go. Either way the TA played the good General like a fiddle, right up to the Shibberwichee. Through a judicious mix of obstructionism and over-helpfulness the TA managed to back Kihei into a corner in a little under four months. Not particularly quick I must admit, but then they were trying to establish the administrative basis of the city at the same time, so reconciling the two must have taken some nifty footwork.

Kihie’s replacement was a diplomat by the name of Jujiro Matsuda, who proved to be a very different sort of Japanese civil servant. Rumour has it that Matsuda was sent to Saigon with a single instruction ‘get the money flowing’ and he did just that. At the time, the ‘Gnomes of Nara’ were a little appreciated factor outside Chipan, and I can’t say they’re much better known now. But the Chipanese Ministry of Finance, known inside the country with a mixture of fear, loathing and respect as the ‘Satsu no Hokannin,’ were, and I suspect still are, the power behind the power behind the Imperial Japanese Government, and as such they have the gravitas to make any other arm of government jump, should they chose to do so. The point, only dimly realised at the time, was that it was Ministry of Finance who called the shots over Saigon, and their motivation was purely economic.

With the appointment of Matsuda, the Army turned Chipanese influence in Saigon over to the Foreign Ministry, and the Foreign Ministry retained it solely on the condition that it continued to pour funds into the Imperial coffers. Matsuda discovered what’s aptly named the ‘Matsuda principal’ in certain circles. The rest of us would call it masterful inactivity. Everyone wanted to make money in Saigon, and the easiest way for Chipan to assist the process was just to stay the hell out of the way. The more the Chipanese withdrew their fingers from the pie, the more energetic the TA seemed to become, until eventually Chipan did nothing, the TA did everything and the only reason the Chipanese representatives bothered to keep turning up to Board of Control meetings was to check the books, or if Tokyo had a request to make.

By the late 70’s the odd situation had developed where by Saigon had become one of Chipan’s three ‘windows on the world’ along with Nagasaki and Shanghai, and it was not only the most profitable of the three, the Zaibatsu were making a mint, but also the one Chipan had the least control over. Even today some of the tallest skyscrapers in the city bear the names Mitsubishi, Hitachi and the Imperial Bank of Japan, and skyscrapers are a potent symbol in a city built on alluvial mud and a high water table. The costs of construction make anything over about 20 stories pretty much uneconomic, and 4 to 10 floors seem to be the most popular compromise for commercial properties in Saigon.

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