Foreign Relations of the United States, 1952–1954, Korea, Volume XV, Part 1

795B.5 MSP/3–2852: Telegram

The Secretary of State to the Embassy in Austria¹

secret

Washington, March 28, 1952—8:11 p.m.

2450. For: Clarence Meyer, Chief of Mission, MSA. Draft terms of reference for Special Presidential Mission to Korea² as follows:

Verbatim text. “Memorandum by the Secretary of State for the Chief of the Unified Command Mission to the Republic of Korea. Subject: Terms of Reference for the Unified Command Mission to the Republic of Korea.

I refer to your recent acceptance of an assignment to head a Special Presidential Mission to negotiate financial, economic, and other appropriate agreements between the Unified Command^* and the Republic of Korea(ROK).

The President has authorized me to act for him in arranging for designation of other members of your mission, developing the position of the Unified Command on the various matters which will be handled by your mission, and supervising your negotiations with the ROK. Accordingly, it is requested that you keep the Department of State continuously informed of the activities of your mission and that all communications from your mission to the Unified Command be addressed to the Department of State.

By mutual agreement among the various interested agencies of the Unified Command your mission will include the following representation:

Special financial and economic representative of the Secretary of Defense, with personal rank of Minister.

Senior military representative of the Department of Defense.

Appropriate representatives of the Department of the Army Staff.

Representatives of other Unified Command agencies as considered necessary.

It is the general purpose of your mission to obtain ROK agreement on appropriate joint or unilateral measures to facilitate military operations of the United Nations Command in Korea and to support United Nations and United States aims in Korea, including the continued development of an enduring friendship between the people of Korea and those members of the United Nations represented in the Unified Command.

In accomplishing the general purpose of your mission and the specific objectives outlined above, you are authorized broad discretion to discuss with the ROK any issues directly affecting the mission of the Unified Command. However, if other issues should be raised by the ROK, you should explain that such issues are not within the scope of your authority since you are representing the unified Command.

In return for satisfactory financial, economic, and aid agreements with the ROK and demonstration of reasonable ROK efforts to achieve financial and economic stability, you may make the following commitments regarding reimbursement of the ROK for advances of Korean currency to the United States:

a. Prompt settlement (at the rate of exchange at which sold) for all advances of Korean currency which has been sold or may be sold in the future to personnel of United States forces for their personal use in the Korean economy;

b. Prompt settlement (at whatever you may consider a realistic rate of exchange—substantially in excess of 6000 to 1) for Korean currency which has been advanced for bona fide military requirements of United States Forces subsequent to 31 Dec 1951. (You are not authorized at this time to commit the United States regarding the time of settlement for advances of Korean currency made to United States forces for official expenditures prior to 31 Dec 1951.)

c. Subsequent monthly settlements (at a rate of exchange determined by the United States to be realistic in consideration of Korean economic factors, such as price levels, wage rates, etc.) of Korean currency advanced for (1) sale to personnel of the United States forces and (2) bona fide military requirements of United States forces. Such settlements to be made within sixty days after the month in which Korean currency was advanced, contingent on continuation of reasonable ROK efforts to achieve economic and financial stability;

d. Settlements will be made in dollars unless it may appear more appropriate at the time of such settlement, after consultation with the ROK, to make payment in kind.

The announced aim of the United Nations, as expressed in the June 27, 1950 Resolution of the Security Council, is to repel the armed attack and to restore international peace and security in the area. The current general objectives of the United States in this regard are to:

a. Seek through appropriate United Nations machinery, a settlement of the Korean conflict acceptable to United States security interests;

b. Develop and equip the armed forces of the ROK so that they may assume increasing responsibility for the defense and security of the ROK;

c. Continue to seek to develop strong barriers against communist subversion and military aggression in Korea, and to develop political and social conditions in Korea which will facilitate United States security interests.

In the conduct of your negotiations with the ROK you should give priority to those matters which you may consider most urgent in accordance with the general purpose of your mission. It now appears, however, that your negotiations should place immediate emphasis on expeditious accomplishment of the following specific financial, economic, and aid objectives:

a. Continued adherence to the terms of the financial agreement of 28 July 1950;³

b. Conclusion of satisfactory arrangements covering the substance of the proposed “Agreement on the Relief and Support of the Civilian Population of Korea”, which has been the subject of extended negotiations between the Commander in Chief, United Nations Command, and the ROK.⁴ (Such arrangements should include, but not necessarily be limited to (1) appropriate joint arrangements for coordinating use of ROK foreign exchange resources and (2) establishment of machinery for an effective joint effort to control inflation.)

It shall also be your objective, at the earliest appropriate opportunity, to negotiate a satisfactory civil affairs agreement providing essential administrative and base rights arrangements in the ROK for forces of the United Nations Command.⁵

In addition to the foregoing commitments, you are authorized to agree to apply the Economic Cooperation Administration counterpart fund against the existing overdraft account of the ROK in the Bank of Korea.

In the event you should consider it desirable to make other commitments to the ROK, you should submit appropriate recommendations, together with justifications therefor, to the Unified Command.

You should maintain close liaison with the Commander in Chief, United Nations Command, and with the United States Ambassador to Korea; and in your communications to the Unified Command you should indicate their positions on any substantive issues that may arise.

The Department of Defense and other interested agencies of the Unified Command will provide your mission such assistance as may be appropriate. Necessary administrative support for your mission will be furnished by the Commander in Chief, United Nations Command. However, each agency represented on your mission is responsible for defraying the individual pay and travel costs of its own representatives.”

Above draft not finally approved by State. Pls cable your time arrival Wash when firm.

Acheson

1. This telegram was drafted and cleared by members of the Office of Northeast Asian Affairs.
2. On Mar. 10 and 12, Ridgway and Muccio requested that a high-level mission be sent from Washington to settle the outstanding problems of economic and financial relations between the UNC and the ROK. Meyer was chosen to head the mission; Hermes, Truce Tent and Fighting Front, p. 219.
3. For technical reasons it may be necessary that some of these agreements be negotiated on behalf of the United States, rather than the Unified Command. [Footnote in the source text.]
3. For documentation on this agreement, see Foreign Relations, 1950, vol. vii, pp. 271 ff.
4. For documentation on this subject, see ibid., 1951, vol. vii, Part 1, pp. 910 ff.
5. The members of the Office of Northeast Asian Affairs and the Embassy in Korea were strongly opposed to the idea of negotiation of a Civil Affairs Agreement because such an agreement could be regarded as an invasion of Korean sovereignty. In view of the highly charged political atmosphere centering on the forthcoming Presidential elections and the “hypersensitivity” of ROK officials, they considered the time inopportune for such negotiations; memorandum by Young to Allison, Mar. 31, 1952 and telegram 944 from Pusan, Mar. 28, 1952 (795B.5 MSP/3–3152 and 795B.5 MSP/3–2852, respectively).