The Atlantic and Its Enemies

by Norman Stone

  16. Atlantic Crisis 1974-1979

  Of this period, the fall of Saigon and Phnom Penh in April 1975 was the great symbol — the greatest military and economic power on earth defeated by a small and very determined Communist state. It was a symbol of greater resonance than even earlier such instances, such as the evacuation of Canton in 1949, when Chiang Kai-shek had fled to Taiwan, with his broken army (and the museum treasures of ancient China). In Saigon, there was a general panic, for all the world to see on television, as the helicopters whirred off the roof of the American embassy, crowds of people clutching desperately at the struts. Of course, the supposed peace agreement of 27 January 1973 had been fraudulent, a face-saver for the Americans, and there was a considerable Northern presence in the South. Heavy weaponry was moved along the jungle roads, and 100,000 men came in from the North, with tanks and SAMs. The total force available stood at a million men, regulars and guerrilleros, most of whom did front-line service, whereas Thieu’s American-trained 750,000 men suffered for the enormous ‘tail’ on which the Americans insisted: in effect six men in the rear for every one at the front. Thieu tried to extend his own control in the Mekong Delta, but that only overextended his forces — by now, at least partially, far better than before, and offering one of the might-have-beens of the affair. Then came the oil crisis, depriving the South Vietnamese air force of fuel, which the Americans would only dole out from watering cans; and inflation became much worse. By autumn 1974 the Northern leaders had decided upon a two-year ‘general uprising’ and early in 1975 seized territory adjoining Cambodia, capturing huge amounts of supplies, at that only eighty miles from Saigon. Nixon had promised to ‘respond with decisive military force’, but he was now politically dead, and Thieu was abandoned, to the cheers of Congress.

  The Ho Chi Minh Trail, no longer the romantic Guevara pathway, was now double-tracked and paved, with intersections that required traffic managers, and ended close to Saigon. In fact the South could be cut in half, and the North had another advantage, that small attacks in the centre would drive hordes of refugees in panic towards the sea and Saigon, blocking all the roads and preventing the Southern army from moving effectively. That is what happened — a chief city bombarded and isolated, with refugees crowding the roads and even the ports, paralysing the ships. South Vietnamese soldiers themselves panicked, rushing to save their families. A truly ruthless regime would just have machine-gunned the refugees and driven them in a different direction, but Thieu was not made of such stuff, and instead just ordered complete retreat out of the Central Highlands. Masses of troops picked their way through masses of refugees, moving in buses, lorries, private cars, bicycles, all overloaded with people, from babies to aged ancestors, those who fell being crushed by the vehicle behind, while the North Vietnamese threw shells into the crowds. Forty thousand people are said to have died on this exodus, and over $1bn of materiel fell into North Vietnamese hands.

  Now came collapse. Thieu hoped to hold on with enclaves that would get American support — Da Nang on the coast, together with Saigon and the Mekong Delta. But, once again, the Northern commanders applied ruthless methods, using refugees to paralyse the defenders’ movements, and attacked towards Hue, a city already vastly demoralized by the Buddhist troubles and swamped in refugees by the North Vietnamese attack of 1972. On 24 March the old fake-imperial city, tinkling bells and all, collapsed, and a million refugees now fled towards Da Nang, where the Americans had had their fortress-port, or tried to get away by sea, clinging to anything that might float. By 29 March Da Nang was falling as well, as official America turned a disdainful back (the ambassador even tried to prevent a decent man, Edward J. Daly, president of World Airways, from sending two Boeing 727s to the city, flying on the first one himself. After landing, his aeroplane was mobbed by thousands of people, some 270 of whom were finally jammed in, under gunfire, and, badly damaged, the aircraft limped heroically back). Then all the other coastal towns fell, Cam Ranh Bay, the great American base, after only thirty minutes of fighting; one airport was captured with more than sixty grounded aircraft. By early April the North Viet namese had cut off Saigon, and were able to shell Bien Hoa airfield. Cambodia was collapsing as well: on 12 April 276 Americans were evacuated from Phnom Penh, which should have been a sign to the still disbelieving Thieu. He hung on to office for another week, desperate to see the B52s return. Instead, he learned on 23 April that President Ford, speaking at a university, had announced that the war in Vietnam ‘is finished as far as America is concerned’. His audience stood up and clapped.

  The evacuation of Saigon had itself been held off, to forestall panic, but panic then took hold, as a formation of captured Cessna A-37s bombed the presidential palace. The famous scene came on 29 April, with the helicopter evacuation from the embassy compound itself. Up and down, on film, 6,236 people were taken off through crossfire, the large machines lifting off from the walled-in yard, the smaller ones from the roof; 662 flights were made between Saigon and ships eighty miles away, the crews managing matters with great efficiency and such decency as could be mustered; and the end came at 5 a.m. on 30 April, when the ambassador left. Now, every South Vietnamese who could get away made for the American Seventh Fleet, helicopters landing so fast that they had to be pushed overboard as soon as the occupants had been got out, to make space for the next one: 675,000 refugees were brought to the United States. On 30 April a North Vietnamese tank smashed through the gates of the presidential palace. The stand-in president, the selfsame Duong Van Minh who had once destroyed Ngo Dinh Diem at the Americans’ behest, wanted formally to capitulate. He was told that he no longer had anything to give up, but was allowed, on the radio, to say a few words to the effect that that was that. In Cambodia, at the same moment, there was a similar collapse, as the Khmer Rouge moved in to a silent Phnom Penh, filled with a foreboding that was entirely justified.

  To start with, the opponents of the Vietnam War were jubilant: the ‘People’ had triumphed, the Americans and their lackeys were scuttling ignominiously away, as ‘Whites’, in this scenario, were supposed to do. The Communists were even on a best behaviour that comes as a curious shock after the experiences of mismanaged American triumphs, a quarter-century later, in Kosovo or Baghdad, when army engineers were replaced by private contractors. The North Vietnamese worked to get the electricity and water in Saigon going, and for a time there was recovery. But this solicitude for the Saigon population did not last for very long. The usual tyrannical procedures were applied, with attempts at heavy industrialization, and collectivization of agriculture, in a country wrecked by a quarter-century of war. Even the Mekong Delta, from which rice had been exported, saw famine. Anyone connected to the ‘old order’ was ‘re-educated’ in gruesome camps and a secret police had the usual field day. Vietnam was distinguished only by a phenomenon known as the ‘boat people’, as a million people (estimates differ) bribed their way onto open boats to escape, over pirate-ridden seas, to countries such as Malaysia or even Australia, where they were not greatly wanted. About 750,000 of the Chinese minority were floated off from 1978 onwards, taking years to become, eventually very successfully, integrated elsewhere. Meanwhile, Vietnam relapsed into the traditional hostility towards China, and there was even an absurd war. In Cambodia matters were even worse. A provincial peasant and largely teenage Communist Cambodian guerrilla force had started up: the Khmer Rouge. These were led by one Pol Pot, who, though not a great academic success in France, had learned the usual stew of exterminatory Communism that flourished in those parts (Enver Hodža in Albania, and for that matter Andreas Papandreou in Greece, had had the same training). Maoism had glorified the revolutionary peasant, whereas Marx had regarded peasants with contempt — ‘quadrupeds’ (as the French Left saw them). Mao had demonstrated that the peasants were after all revolutionary, that the evil really lay in the towns, where money was made, and foreigners flourished. A sort of mad peasant ideology resulted. On 17 April 1975 the Khmer Rouge invaded the Cambodian capital an
d declared that townspeople were abolished: 2.5 million people were killed, sometimes horribly, or starved, or worked to death, until the Vietnamese invaded. In later years, ‘boat people’ and the ‘killing fields’ of Cambodia (revealed by an enterprising Hungarian television journalist, Aladár Chrudinak) counted as glaring evidence that the Americans had been right in fighting the Vietnam War, and wrong only in the method with which they had fought it. This is a debate that goes on.

  There was another great symbol of this period — ‘Watergate’, and the fall of Richard Nixon. It was as if the gods had wanted to take a revenge, in black humour, for Nixon’s weaselly behaviour over Vietnam, for the original offence was comic, and we might even apply Hegel’s remark as to ‘the terrifying infinity of the particular’. Nixon’s staff were caricature business school types, sandwich lunches, work-out sessions, confusing efficiency with efficacy: no imagination at all. John Ehrlichman was a Christian Scientist lawyer who objected to Nixon’s drinking and refused to work with him unless it stopped. The drinking did in fact stop, more or less, and Nixon’s judgement did not improve: without a drink he became charmless and gauche. The Chief of Staff, John Mitchell, exuded silent strength, misleadingly, but he had a first-class record that made Nixon feel inferior, and brought out the nasty, frustrated and unscrupulous side of the President. Junior staff, tails wagging, organized a break-in at Democrat headquarters in the Watergate office building, in the hope of finding discreditable papers. The affair was bungled, lies were told, and Nixon, his head in Chinese clouds, did not follow the trivialities. Then he lied as well. Then the lies were recorded, as well as his reactions to the revelation of this. Then the people who tried to find out about the recordings were harassed, and then more lies were told.

  Lying about (and obsession with) trivialities, and subjecting opponents to this or that survivable illegality, were not new in American politics, or for that matter the politics of most other countries. Roosevelt himself had been guilty. The Watergate break-in had even occurred in a defensible context, because secret documents had been ‘leaked’ to The New York Times (about Vietnam) and national security was threatened. But Nixon depended upon a wooden, two-dimensional staff, and National Security people who might have understood something about proportion had been cold-shouldered. The Republican establishment’s candidate had been Nelson Rockefeller (who lost, because he had divorced a wife of thirty years’ standing, and discovered the sixties in his own sixties) and they did not like Nixon: ‘such a common little man’, said Theodore Roosevelt’s daughter. Over Watergate, they may even have stabbed Nixon in the back. At any rate, a huge fuss in the media, preoccupying them as the internal and external affairs of the United States went from bad to worse, led to a threat to Nixon of impeachment, a formal condemnation by Congress which might have led to bankruptcy and imprisonment. On 9 August 1974 Nixon resigned. He was given a formal pardon in exchange, by his unchosen successor, Gerald Ford, who was next in line, mainly because he was not a thief, like the previous Vice-President, or an alcoholic, like the other alternative. Not America’s brightest moment.

  There was far, far more in the background. The October crisis of 1973 introduced a period of terrible instability, when quite sober commentators could assume that the End was Nigh. OPEC now appeared to be almost a villainous operation from James Bond, with a palace headquarters on the Vienna Ringstrasse. The earnings of oil exporters rose from $23bn in 1972 to $140bn in 1977. There was a fourfold inflation of oil prices, and then an eightfold one; stock exchanges collapsed, banks failed, and a tidal wave of petro-dollars engulfed the world, enriching by far the least worthy recipients. Golda Meir, in Israel, remarked that Moses had wandered in the desert for forty years, leading his people to the only place in the Middle East that had no oil. But it was on the whole America’s own doing. The oil producers, left to themselves, would have been far too disunited for common action, and their common strategy at OPEC did not in fact last for very long. But the fall of the dollar in 1971 pushed them together: why accept valueless paper dollars? The same was true, though not to the same extent, for producers of other raw materials — coffee, tobacco, copper, rubber, iron ore, meat as well — and prices shot up, even in 1971, two years before the oil shock. The problem was symbolized by the Brazilian city of Manaos, deep in the jungle. There, once upon a time, rubber had appeared, and the place became opulent: famously Dame Adeline Patti, the great opera singer of the 1890s, appeared there. Then rubber was produced elsewhere, and Manaos relapsed back into semi-jungle. Now, the Middle East was becoming a huge Manaos.

  At least in the epoch of Manaos, there was one commodity that ruled everything else, including money: gold. International prices were stable, or even inclined to go down gently, because the main trading countries’ currencies were based on the Gold Standard. If more gold had been produced then no doubt prices would have risen, but there was a very limited supply of it — roughly what could have been stored in a house (silver was far more plentiful, and therefore unreliable). Up to 1914, and in most ways even 1931, most currencies could be exchanged into gold on demand. In practice it was of course inconvenient and unsafe for gold to be carried around in any quantity, but paper money based on it was trusted, and there were few openings for the manufacture of paper money on the scale that occurred in the 1960s. If you had a profit, you might keep it safely in paper — and very handsome, dignified paper at that. Now, the inflation of the paper dollar meant that, on top of low prices, the producers were getting money of questionable value, itself declining in purchasing power (and looking more and more crumpled and grubby). The only answer was for them to combine and to create scarcities, as the oil producers in 1973 elected to do.

  But the volume of paper-money purchasing power in the Atlantic countries meant that an increasing amount of money chased goods, with the inflationary results that would follow. Primary produce of all sorts, including food, now rose in price: in the USA even in 1971 wheat went up by 50 per cent. As an instance of what happened, there is the index of prices paid for ‘Omaha Choice Steer’ of roughly one ton in weight. In 1951, at a time of rising prices in the Korean War, the price was $35. In the 1960s it varied around $25. Then in 1969, 1970 and 1971 it started to rise — $30 and above — reaching $36 in 1972 and $45 in 1973, where it stabilized until 1978, when it reached $50, and then in 1979 almost $70 (the figure then stuck for almost a quarter-century). Inflation was telling and prices since 1956 have risen ten times: a Florida bungalow in the early 1960s cost $35,000 with interest at 5 per cent, but a decade later stood at four times as much with a higher rate of interest, and there was more to come. Inflation on this scale was general, and when it affected oil prices, it threatened the existing order at its base. From August 1972 to August 1973 meat and fish rose by 40 per cent and Business Week feared that the USA would become another Brazil, a place with endless zeros on the torn and smudgy banknotes. An ounce of gold reached $875 in 1980 (as against $35 in 1970) and the dollar, having stood at four Marks, fell close to two, with a somewhat lesser fall against the yen. In August 1971 it had finally come off gold, and had gone down. Sharp-sighted foreigners could see the dimensions of the problem to come, though Nixon and the advisers at Camp David ‘closed the gold window’ apparently quite casually, the Secretary of the Treasury dismissing complaints: the dollar is our currency but it’s your problem. American exports then flourished at the expense of other countries’. Weaselling protection against them then set in, and unemployment increased all round. Late in 1972, in the library of the White House, the German chancellor, Helmut Schmidt, tried to sort things out, and for a time the foreign exchange desk officer of the Federal Reserve, Paul Volcker, even flew around in a windowless aircraft from place to place, with a view to fixing things. It was no good: there was a tidal wave of money moving against the dollar, and lines in the sand were engulfed. By now there was so much money held in places quite beyond the West’s control that nothing much could be done, and the speculators were just given their heads. C
urrencies now, in March 1973, floated against each other, the values yo-yo-ing; in June the dollar fell to 2.28 Marks from 2.83, then rose again because the Americans had oil, then fell again in 1975, and fell drastically when the Shah of Iran ran into trouble at the turn of 1978-9. With such uncertainty as regards money, trade suffered, and unemployment grew. But so did prices.