250. Memorandum From Robert W. Komer of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)0

Berger’s dispute with General Meloy over how to divide our budget support for ROK between economic and military sectors (Seoul’s 817, Eyes Only)1 bears directly on the MAP turn-around. Let’s weigh in on this issue, if necessary.

In briefest compass, Berger wants to divide the 275 billion hwan in US controlled local currency with which we expect to support the ROK

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1962 budget, 150 military to 125 economic. This is a change from the country team view last spring that 173 should go to the defense budget and 102 to the rest. The ROK military is very unhappy with Berger’s apportionment, and is being backed by Meloy. In fact, Meloy wants a 180/85 split, and has referred the dispute to Washington.

Berger feels that we must give greater emphasis to economic development. He thinks that the ROK has padded its defense budget and that in any case if we keep financing some 95 per cent of it through US generated local currency, we will never get the Koreans to put their own house in order. He says we’re facing a ROK squeeze play and must be prepared for a ROK threat to cut its forces unless we give it relief.

Meloy argues that present 600,000-man ROK force level is sacred; it was “developed by the US Joint Chiefs of Staff and approved by the UN [US?]National Security Council.” To him, 180 billion hwan in defense budget support is “vital” to Korea.

This issue is giving Berger a liberal education. He has discovered that the old five-year plan for MAP gives defense such a high priority that by 1965 almost all US-controlled hwan would be going into the military budget, leaving nothing for support of economic growth. The only trouble is that even Berger seems horrified by the thought that ROKs might cut their forces if they can’t get what they and Meloy want. For my money, we should welcome such a ROK decision; it would begin the turn-around the Steering Group recommends,2 and (better still) place responsibility for it on them rather than on us.

State, and I suspect even DOD, will back Berger.3 If not, however, this is one of issues President might want discussed in connection with NSC review of SG Report. In meantime, why not indicate to McNamara that WH much interested in this test of whether we really want a MAP turn-around in the largest MAP client country?

Bob K.
  1. Source: Kennedy Library, National Security Files, Countries Series, Korea, General, 7/61-2/62. Secret. Also sent to Kaysen.
  2. Komer wrote “815, 816” in the margin, a reference to telegrams 815 and 816 from Seoul, both December 19. Telegram 817 is dated December 20. (All in Department of State, Central Files, 895B.10/12-1961 and 895B.10/12-2061)
  3. The Military Assistance Steering Group, established by agreement between Secretaries Rusk and McNamara on July 8, was an inter-agency group responsible for reshaping the military assistance program. The Steering Group focused on six nations—of which Korea was one—which absorbed 50 percent of the U.S. Military Assistance Program. The Steering Group recommended that the mix of aid in the ROK be re-examined, but Berger, McConaughy, and William Bundy agreed that the United States should not open up the question of ROK force levels (the basic factor on which the MAP was based) until June 1962 when there would be a better appreciation of the economic situation in South Korea. (Memorandum from William Bundy to Komer, December 12; Washington National Records Center, RG 330, OASD/ISA Files: FRC 64 A 3282) Regarding the Steering Group’s report, see Document 251.
  4. The Departments of State and Defense agreed to apportion U.S. supporting assistance to Korea for fiscal year 1962 in the form of U.S. aid-generated currency on the basis of 150 million hwan for ROK Defense budget support and 125 million hwan for economic development. (Telegram 709 to Seoul and letter from Gilpatric to Rusk, both December 29; Department of State, Central Files, 895B.10/12-2061 and 895B.10/12-2961)