Foreign Relations of the United States, 1951, Korea and China, Volume VII, Part 1

895B.131/10–151

Memorandum of Telephone Conversation, by the Officer in Charge of Economic Affairs in the Office of Northeast Asian Affairs (Hemmendinger)

restricted

[Washington,] October 1, 1951.

Subject: Partial Payment to Republic of Korea of Won Advances for use of United States Forces.

Participants:	Ambassador Yang
	Mr. Hemmendinger—NA

Ambassador Yang informed me that he had received the following message from his Government:

“Accept suggested sum of $12,155,714 as initial and partial repayment of won loan with understanding conversion rates to be calculated according to rate prevailing at time and balance of loan will be paid in time to avert pending physical crisis. With this understanding check should be made out to Finance Minister Paik Too Chin and deposited in Bank of Korea.”

Ambassador Yang indicated that he thought the word “physical” was a mistake for “financial”.

I said I thought the question now in the light of this message was whether the Ambassador considered himself authorized to sign the receipt in the form which had been submitted. He said that he was prepared to sign the receipt, and that this communication could remain informal. He is going to New York today and will be prepared to come in on Wednesday¹ to complete the transaction. I told him I would consult and get in touch with his office.

I asked Ambassador Yang specifically whether he interpreted the “understanding” of his Government to be a part of a contract or a simple statement of the views of his Government. He said that he did not interpret it to be a part of a contract, but merely to be consistent with the idea which had been expressed by officers of the Department of State that further releases could be anticipated. (Note: There seems to be a misunderstanding here, in that the Department has mentioned only further releases of dollars in payment for won used by the United States forces for sale to troops, whereas the language of the message from the Republic of Korea Would appear to refer to the whole of the won advances.)

Ambassador Yang also said that he understood the reference to conversion rates as meaning the military conversion rates prevailing at the time.

With respect to the instruction to have the check made out to the Finance Minister and deposited in the Bank of Korea, Ambassador Yang said he thought this would not involve sending the check to Korea, but would authorize deposit by him in the account of the Bank of Korea with the Chase National Bank.

1. October 3.