(7 of 10)
Within days Diem was bound for Saigon with France's sanction to form a Cabinet. It would be no easy task. Diem had been out of the country for four years, had become a virtual unknown among the mass of his countrymen. Perhaps the sum total of his national support was at Saigon's airport when he stepped off the plane: five hundred personal friends, Catholic priests, village dignitaries and former colleagues in the old French colonial government.
A Few Friends. The war-ravaged land that Diem took over was hardly a nation at all. Two weeks after he was installed as Premier, Viet Nam was carved in half at the Geneva bargaining table by the weary and discouraged French, who agreed to hand over the north, with its coal and iron, to the Communists. That left Diem's amputated south to go it alone. The economy was in tatters, and almost immediately the roads from the north were clogged with the flow of refugees who were to total 880,000 within a year. To cope with his problems, Diem had no cohesive civil service, could not even depend on a loyal army, since his French-trained military chief. General Nguyen Van Hinh, was personally hostile and forever plotting to take over the reins of government himself. A private gang, the notorious Binh Xuyen, actually operated the national police, having bought the "concession" from Puppet Emperor Bao Dai for $1,000,000. On top of all this, two powerful quasi-religious sects, the Cao Dai and the Hoa Hao, controlled large parts of the countryside, opposing Diem's regime and enforcing their will with well-armed private armies of their own.
Gangbuster. In this crisis, Diem got little help from the French, who were alarmed at his independence, secretly backed the Binh Xuyen, and yearned for the day when they could restore to power the pliable Bao Dai. But the U.S. backed Diem to the hilt. U.S. Special Emissary General J. Lawton Collins supplied ships of the U.S. Seventh Fleet to help evacuate the hungry refugees, made it clear to troublesome General Hinh that the U.S. would grant no aid to any army that opposed the Premier. Diem whittled at Hinh's power by wooing important subordinate commanders, and when the showdown came, Hinh fled to exile in France.
With the army behind him, Diem could at last crack down on the Binh Xuyen and the sects. The Binh Xuyen's power was smashed when Diem closed the opium dens, gambling halls and bordellos, from which it drew its revenues, then fought the gangsters with armed force. To crush the Cao Dai and Hoa Hao, Diem sent his troops out again with orders to shoot; bullets whistled through Saigon's streets and in the delta swamps before the sect leaders caved in.
Soundproofed Brother. One task remained. Diem was determined to remove Emperor Bao Dai, who still technically held his position as Chief of State. In October 1955, Diem organized a referendum to that end. The results: 5,722,000 votes for Diem, 63,000 for Bao Dai. The Republic of South Viet Nam was proclaimed, and Premier Ngo Dinh Diem became its first President.
Diem's first 15 months were his finest. He survived against all odds. He split up large landholdings and sold them off to landless farmers; he expanded rice production and encouraged light industry.