Office of the Historian

357.AD/9–1251: Telegram

The Secretary of State to the Embassy in Korea

secret
Washington, September 12, 1951—6 p. m.

208. Re proposed CINCUNC–ROK agreement. Loren1 and McClurkin2 reported to Dept from Tokyo and subsequently recommended to Amb “that there is need for financial and accounting agreement and that new draft without fon exchange control by CINCUNC [Page 911] wld be satis agreement that nature. In addition if armistice negots fail, possibility created of necessary delay in transfer operating responsibility to UNKRA until after termination ECA aid agreement. In that case present draft3 might be acceptable even with fon exchange control as basis negots with ROK for minimum interim aid agreement.”

Subsequently CINCUNC determined postpone indefinitely negot agreement with ROK. DA now informs Dept CINCUNC desires proceed soonest this negot and insists upon inclusion fon exchange control. DA understands probable difficulty negotiating agreement particularly with provision re fon exchange but desires opportunity for CINCUNC endeavor secure this provision. Dept understands CINCUNC will probably request advice and assistance Emb in course negots.

Dept’s present view is situation has changed since Jul. Delays in armistice talks are clearly extending period in which CINCUNC must retain major burden relief activities. Present state talks also more conducive to negots CINCUNC–ROK agreement than Jul situation. Given these circumstances we believe advisable agree to CINCUNC proceeding forthwith negotiate with ROK in consultation Emb on basis Jul 26 draft including requirement for CINCUNC concurrence in fon exchange allocations. In addition, we wld suggest substitution in last line Section I Art 5 of “stabilization” for “restoration” thus underlining CINCUNC responsibility for carrying out program of relief and support in such manner as to promote stabilization Korean economy. Only other change would be substitution “external” for “nonindigenous” in section I Art 2.4

Ur comments requested.

Acheson
  1. E. Allen Loren, Economic Adviser in the Office of the U.S. Political Adviser in Tokyo.↩
  2. Robert J. G. McClurkin, Deputy Director of the Office of Northeast Asian Affairs.↩
  3. Reference is to a draft agreement, dated July 26, between CINCUNC and the Republic of Korea on relief and support of the civilian population of the Republic of Korea, not printed.↩
  4. The reference here is to services to be provided by CINCUNC.↩