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Memorandum of Conversation, by the Officer in Charge of Korean Affairs (Bond)

confidential

Subject: Situation in Korea, With Special Reference to (a) Inflation and (b) Postponement of Elections.

Participants: Mr. Dean G. Rusk, Assistant Secretary [of State for Far Eastern Affairs]1
Dr. John M. Chang, Korean Ambassador
Mr. Niles W. Bond, NA

The Korean Ambassador called by appointment today to pay his respects prior to his departure on a trip which will take him to Australia and New Zealand on a goodwill mission and to Seoul for consultation. He stated at the outset that he had just been obliged to postpone his departure until April 10, due to certain prior commitments of the New Zealand Foreign Minister, and that he would probably not reach Seoul until about May 10.

In response to the Ambassador’s remark that he would thus be arriving in Seoul just about in time for the elections, Mr. Bond stated that it was our present understanding that the latest decision of the President was that the elections should be postponed until November. The Ambassador replied that he was not aware of any final decision to that effect, and that he personally hoped that such a postponement would not take place. He pointed out, however, that if the National Assembly did not act promptly on the budget legislation now before it, the President might have no alternative but to put off the date of the elections. Mr. Rusk said that, whatever the reasons might be, the postponement of the long-scheduled May elections would certainly be widely interpreted as an arbitrary action and one inconsistent with the democratic principles in accordance with which the Republic of Korea had been brought into being. It would in particular, he said, be regarded in an unfavorable light by those nations which, through the instrumentality of the UN General Assembly, had lent their support to the establishment of the Republic. He added that, as the [Page 41]Ambassador well knew, the continuing good will and sympathetic support of those nations was one of the primary sources of strength of the Republic and one which it could not afford to forfeit. Mr. Rusk went on to say that the effect of a postponement of the elections would likewise be markedly unfavorable in terms of American public and Congressional opinion. The Ambassador said that he was in entire agreement as to the unsalutary effect of postponing the elections, and that he would write immediately to his President pointing out that the climate of international opinion and of opinion within the U.S. was not favorable to such a postponement.

Mr. Rusk stated that there was one other subject which he wished to raise with the Ambassador, concerning which he hoped the Ambassador would carry back a strong expression of our views when he returned to Seoul. He said that he had in mind the problem of inflation, which had been causing this Government an increasing amount of concern during recent months. He said that it was our firmly-held belief that the success of the Republic of Korea in maintaining itself us a free nation was at the present juncture dependent in large measure upon its ability to deal effectively with the mounting inflation. Adverting to Mr. Hoffman’s letter of March 23 to the Korean Prime Minister,2 Mr. Rusk explained that the statement to the effect that this Government would have to reexamine its ECA program in Korea if the inflation were not soon brought under control was not intended as a threat, or as a means of forcing the Korean Government to conform to our views of how it should run its economy, but that it represented rather the considered judgment of this Government that continued inflation in Korea would serve to destroy the basis for further American aid—in other words, that continued inflation would bring about a situation in which it was no longer within the power of the United States to provide the “missing component”. The Ambassador replied that he fully understood that our strong views on this subject were expressed as those of a friend, and that he would do his best to bring those views forcefully to the attention of his President. Mr. Rusk explained that we had summarized our views on the inflationary situation and on the proposed postponement of the elections in an aide-mémoire which the Ambassador could take with him, the text of which was being telegraphed to the Embassy in Seoul for informal transmittal to the Korean Government.

The Ambassador said that he wished to express his appreciation for the splendid reception accorded the Chairman of the National Assembly, Mr. Shinicky, and his party during their recent visit to Washington. He added that Mr. Shinicky had been particularly grateful for [Page 42]the opportunity of being introduced on the floor of the Senate and that he and his party had left Washington thoroughly satisfied with the treatment which they had received.

The Ambassador then raised the question of a Japanese peace treaty,3 and inquired whether or not any concrete developments could be expected from that quarter. He explained that this was a matter in which Korea, as one of the principal victims of Japanese oppression, was vitally interested. Mr. Rusk said that he had just come from a meeting on the subject of a Japanese treaty and that, while it was not possible at this time to make any predictions concerning the actual convening of a peace conference, he could say that this Government was formulating its views on the subject and might be in a position to discuss those views with other interested governments in the near future.

The Ambassador stated that he did not wish to take leave of Mr. Rusk without expressing the hope of the Korean Government that the American defense line in the Far East could be extended to include south Korea.4 Mr. Rusk observed that this was not a subject which he was in a position to discuss, but that he did wish to caution the Ambassador against putting too much faith in what he read in the newspapers. Mr. Rusk went on to point out that the so-called “defense line” to which the Ambassador had referred was in actuality merely an enumeration of those sectors in the western Pacific in which the United States had firm military commitments; i.e. our responsibilities as an occupying Power in Japan, our special interest in the Philippines as a former part of United States territory, etc. The Ambassador replied that he realized that no statement could be made on this subject and that he himself had avoided making any such statements which he felt might prove embarrassing. He added that he did wish, however, to impress upon the Department the importance which the Korean Government and people attached to their apparent exclusion from the defense plans of the United States in the Far East. Mr. Rusk replied that the inference that the United States had decided to abandon the Republic of Korea to its enemies was scarcely warranted in the light of the substantial material aid and political support which we had furnished and were furnishing to that Republic. The Ambassador was quick to point out that he was not expressing any doubts of his own, but merely a point of view which unfortunately enjoyed wide currency in Korea. Mr. Bond then made the further comment that, in the case of Korea, it had been the carefully considered judgment of this Government that the most efficacious [Page 43]means of defending against Communist expansion was to bring about the creation in south Korea of a strong, self-reliant, Korean government, and that it was to that end that our policy in Korea continued to be directed.

Returning to the subject of his trip, the Ambassador said that the purpose of his visit to Australia and New Zealand was two-fold: (1) to express the appreciation of his Government for the support accorded by those two nations in the UN during consideration of the Korean problem, and (2) to sound out the Australian and New Zealand Governments on their intentions with respect to collective security arrangements in the Pacific. Having been told earlier in the conversation of Ambassador Muccio’s projected return for consultation, the Ambassador asked that he be informed of Ambassador Muccio’s exact plans at the earliest possible moment in order that he might be able so to arrange his travel as to meet Ambassador Muccio either in Washington or en route.

Attached is a copy of the aide-mémorie which was handed by Mr. Rusk to the Korean Ambassador at the conclusion of the foregoing conversation.5

  1. Mr. Rusk, who had been Deputy Under Secretary of State, assumed his new position on March 28, 1950.
  2. See telegram Ecato 395, March 27, to Seoul, p. 36.
  3. For documentation on this subject, see vol. vi, pp. 1109 ff.
  4. See footnote 3 to the memorandum of conversation by Mr. Williams, January 20, p. 12.
  5. See infra.