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Diem's record of nationalist purity did not, at first, get Premier Diem very far. France's Premier Mendes-France was advocating "concessions . . . large concessions" to end the war, and at Geneva he made them. "We weren't even consulted," complained Diem's Foreign Minister Tran Van Do. Back in Saigon, Diem found that he could not depend on a single Vietnamese battalion; he had nothing in the treasury; he could not make contact with about 85% of his villages. Hundreds of thousands of refugees were coming down from the Communist north, choosing freedom, however chaotic, and needing care.
Diem's first crisis came from the headquarters of General Nguyen Van Hinh, flamboyant. pro-French commander of the Vietnamese army. General Hinh tried to edge into power by edging his 200,000 men into a gradual, nonviolent kind of mutiny. Diem was cool, but with the resources at his command he could not cope with Hinh. But through U.S. influence, he finally won. "I had only to lift my telephone," the general explained, "and the coup d'etat was on. But I was told that if it happened, the Americans would cut off all dollar aid."
Pickup from Disaster. Diem's victory put General Hinh into exile and his nationalists into forward motion. Those who had waited to see who would win, now began to move over toward the Premier. U.S. aid and advice began to take hold. In the next four months, Diem: ¶Launched a well-received onslaught against corruption and sin, closing down gambling dens and cracking down on the VTPs who were getting rich on graft.
¶Drafted plans for a national assembly —the country's first democratic institution—and for land reforms that would cut yearly tenant rents from about 50% of their crop to about 15%.
¶Reorganized Hinh's army so that it could take over South Vietnamese districts abandoned by the Communists under the Geneva evacuation plan. The U.S., in effect, took over its training.
¶Took over from the French the control of currency and launched South Viet Nam into international trade.
Never very close to the people, Diem set out on a grass-roots tour of central Viet Nam and got a welcome that astonished his advisers. "Long live Ngo Dinh Diem!" the people cheered. "I've seen so-called 'spontaneous demonstrations' all over Asia." said an American after one demonstration, "but this was different ... Fifteen thousand people came charging across the field toward him, screaming, waving straw hats, like the stampede in King Solomon's Mines."