The uneasy peace was broken in December 1946 after Viet Minh and French negotiators failed to reach a final agreement on actual political control of Tonkin and Annam. When open warfare erupted, Ho withdrew the bulk of his military forces into mountainous sanctuaries along the Chinese border, but left small groups of guerrillas scattered throughout the heavily populated Red River Delta. Reinforced with contingents from Europe and Africa, the French Expeditionary Corps initially managed to hold its own and, in some cases, even extend its control. But, drawing strength from its natural appeal to Vietnamese nationalism, the Communist movement began gaining momentum in the late 1940s. Gradually the war intensified and spread into central Annam and Cochinchina. In January 1950, the French moved to undercut the Viet Minh’s appeal to non-Communist nationalists by granting nominal independence to its Indochina possessions. Under the terms of a formal treaty, all of Vietnam (Tonkin, Annam, and Cochinchina) was brought together under a Saigon-based government headed by Emperor Bao Dai. Laos and Cambodia likewise formed their own governments, whereupon all three countries became known as the Associated States of Indochina. This new arrangement, however, had little effect on the ongoing war with the Viet Minh. In accordance with the treaties, the Associated States became members of the French Union and agreed to prosecute the war under French direction. Moreover, French political dominance in the region continued, virtually undiluted by the existence of the Associated States. In related developments, Mao Tse-tung’s Chinese Communist armies seized control of mainland China in 1949 and Communist North Korean forces invaded the pro-Western Republic of Korea in 1950. These events added new meaning to the French struggle in Indochina as American policy makers came to view the war on the Southeast Asian mainland within the context of a larger design to bring Asia entirely under Communist domination. Following the invasion of South Korea, President Truman immediately announced his intention to step up U.S. military aid to the French in Indochina. Congress responded quickly by adding four billion dollars to existing military assistance funds. Of this, $303 million was earmarked for Korea, the Philippines, and “the general area of China.”[1-6][1-C] Thus, the Truman Administration, now confronted by the possibility that Communism might engulf all of mainland Asia, extended its containment policy to Indochina. [1-C] The following year would see a half billion U.S. dollars allocated to support French operations in Indochina. By 1954 that figure would climb to an even one billion dollars.