795.00/7–1153
The President of the Republic of Korea (Rhee) to the Assistant Secretary of State for Far Eastern Affairs (Robertson)
Dear Mr. Robertson: This is my personal note, suggesting to you certain matters not connected with our talks, which I hope you may take up with President Eisenhower at some convenient time.
- (1)
I must tell you that we have considerable uneasiness about the way Korean aid funds have been handled. The several agencies which are operating here get in one another’s way and cause confusion and lack of coordination. They maintain large staffs here in Korea, housed in scarce buildings and occupying scarce office space. The salary and expenses paid to any one of them would maintain ten Korean families. They have large offices and personnel in Geneva, Tokyo, Washington and New York. They conduct surveys and draw up plans. But very little concrete reconstruction has been accomplished, and our people complain that many foreigners are maintained in luxury on funds which are described to the world as being spent for Korean relief. Our original understanding with the ECA was that not more than three per cent of its funds should be spent for overhead, but we are informed that some of these later reconstruction agencies spend as much as sixteen per cent for overhead and that their budgets now call for nine per cent for their own expenses.
In order to eliminate all the needless waste of the aid funds, we suggest the closing of the Korean aid fund offices in Geneva, Japan, and the United States, and that all the administration over the aid funds be centralized in the Combined Economic Board, which represents the Governments of the United States and the Republic of Korea.
Both the ECA and UNKRA have, as much as possible, purchased goods in Japan, thus building up Japanese industries, even though the money was appropriated explicitly for the aid of Korea. Japan has been well satisfied, but the aid reaching Korea has been largely in the form of consumers goods, which means it has been only a form of partial relief and has not built up our capacity for long-range self-support.
The only remedy for this is to centralize the control over the aid funds in the Combined Economic Board, located in Korea, and composed of people who really know and are sympathetic with the needs of Korea. If this cannot be accomplished, we would rather receive no aid at all, but would prefer to secure an adequate sum of money in the form of a loan.
- (2)
A definite policy must be adopted to stabilize the Korean currency. Since VJ–Day this stabilization has been impossible. Our dollar exchange rate at first was fifteen won to a dollar. Then the ECA and UNKRA people began doubling up the rate, demanding that the rate be [Page 1376] “realistic” until it became as high as 23,000 won to the dollar, thus making our national currency practically worthless. No Governmental budget system is possible, and commerce and industry are unthinkable. How can anyone invest his money or secure long-term loans, when it is certain that the value of the won will be quickly and considerably devalued?
As the only practical remedy for this problem, it is our determination to establish a fixed ratio of exchange and then to maintain it. When our people can count with confidence upon the maintenance of a fixed rate of exchange for a prolonged period of time, the deterioration in the value of the hwan will cease. In order to stabilize the long-range value of our currency, we need more available consumers goods, greater production, and a reduction of the amount of paper money in circulation. These are all problems that can be dealt with and solved. The contrary method of continued and repeated devaluations of the currency solves nothing and only makes the problem worse. Since the present state of inflation makes it almost impossible for our people barely to live, I am hopeful that you will find it possible to give this matter considerable attention and to help us put the solution into effect very soon.
- (3)
I want very much to establish friendly and helpful relations with the State Department. For many years I was called “a thorn in the side of the State Department,” all through misunderstandings. Of course I have criticized State Department policies when I thought them to be harmful. But some of the Department personnel worked with and built up certain pro-communist Koreans, like Kilsoo Han, Kim Yong Jeung, and Park Sang Ryup. The Department has said to newspapermen and others that these men are all Korean patriots and statesmen and that I ought to cooperate with them. This policy has been most harmful and has created a false impression in many quarters. The United States does not allow communists and pro-communists in its own Government nor does it permit them to carry on public campaigns in the United States against your people and your policies. These Koreans in America do not represent anybody in Korea and it is most harmful to us and to our friendly relations with the State Department when they are allowed to represent themselves as being against us and to be supported by State Department personnel in their criticisms. It would be most helpful if these people could be deported and end their campaigns of communist smearing once and for all.
I am sure that after our most friendly and helpful talks here you will carry back to Washington a much better understanding of our motives and of our policies. We will do all we can, and I know you will do all you can, to assure an atmosphere of genuine understanding and cordiality. There will always be problems to be solved, and we will not always be in agreement as to how to solve them. But we cannot drift far apart if we do not permit trouble-makers to stir up ill-will and to [Page 1377] exaggerate or invent stories that are presumed to have some shadowy sort of official sanction.
With appreciation for your time and effort spent here with us, and with all personal good wishes, I am
Sincerely yours,