320/10–3150: Telegram

The Secretary of State to the United States Mission at the United Nations


Gadel 84. Re Deptel 398, Gadel 41, Oct 13 and Gadel 52, Oct 17,1 subject currency used North Korea.

As indicated reference tels, Wash agencies recommended Oct 12 to CINCUNC that ROK currency be used North Korea by authority UN Cmdr. CINCUNC reported that he had already directed that North Korean currency only be used. CINCUNC was advised Oct 20 that use North Korean currencies only was consistent with broad political recommendations UN Interim Committee and was appropriate as interim measure if operational requirements satisfactorily met.

CINCUNC has now reported that Communists have removed all plates and means of printing North Korean currency and have removed or destroyed practically all NK currency held in local and central banks, and has recommended use of a special UN scrip to be printed in Japan (CINCFE’s msg CX 67690 being rpted to you.)2

Dept and other interested Wash agencies do not favor use of UN scrip in North Korea and believe preferable use ROK currency with qualifications set out Deptel 398, but consider matter shld be discussed urgently with Interim Committee. Ambassador Muccio will assist in presentation. Suggest that proposal for UN scrip be discussed as recommendation CINCUNC, but that endeavor be made obtain Interim Committee acquiescence in use ROK currency by order UN Command.

Foll additional points for your guidance:

1. Use ROK currency by order UN Command has no implications re future status ROK. No matter what government is hereafter recognized in United Korea, it will have to recognize validity of currency in circulation, and problems this government will be simplified and UN goal of unification will be served if fewer currencies in circulation.

2. No intent invalidate North Korean currency. It is recognized that equitable rate between ROK and NK currency will have to be fixed soon, to prevent further depreciation NK issues and loss to holders. Rate would have to be fixed soon even if UN scrip used because large amounts ROK currency being introduced. Use UN scrip would probably delay fixing status North Korean currency and lead to further depreciation.

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3. Already three currencies in circulation (old ROK Bank of Chosun notes, new ROK Bank of Korea notes, North Korean notes). Introduction of fourth will only augment confusion.

4. While technically UN scrip could be issued as occupation currency to be redeemed by future govt of United Korea without UN obligation, would represent precedent which should not be undertaken without serious UN consideration, which time does not permit.

5. Matter not previously discussed with Interim Committee because believed possible use only North Korean currency in phases one and two. Communists have now made this course impossible.

Reply to CINCFE recommendation awaiting consultation with Interim Committee.

  1. None printed.
  2. Not printed.