895B.00/7–2953
Memorandum by the Assistant Secretary of State for
Far Eastern Affairs (Robertson) to the Secretary of
State1
secret
[Washington,] July 29, 1953.
Subject:
- Organizational Arrangements for Economic Assistance to
Korea
Discussion
The decision of the National Security Council of July 23 on assistance to
Korea directed the Bureau of the Budget in consultation with interested
agencies to submit to the President an organizational plan for the
effective administration of present and future economic assistance to
the Republic of Korea. The Budget Bureau has completed its consultations
and forwarded a paper to the President under date of July 28 (Tab A).
The paper has been concurred in at staff levels by all interested
agencies, but final clearance has not been given.2
The proposed organization provides for assignment of primary
responsibility for Korean assistance in Washington to the Foreign
Operations Administration and in the field to the Commander-in-Chief,
United Nations Forces. The responsibilities of CINCUNC are to be delegated to an
Economic Coordinator, who will be economic adviser to the CINCUNC, and representative of the
Foreign Operations Administration with communications with that
Administration. An understanding will be reached with the Agent General
of the United Nations Korean Reconstructon Agency for the coordination
of its activities by the Economic Coordinator. The concurrence of the
Agent General in an understanding as set forth in the Budget Bureau’s
memorandum to the President is virtually assured.
[Page 1449]
The paper provides that the assignment of responsibilities to the
Director of the Foreign Operations Administration is subject to the
responsibilities of other departments as set forth in the President’s
letter to agency heads of June 1, 1953.3 It
does not define the relations of the Economic Coordinator to the United
States Ambassador to Korea, because the relations of the CINCUNC to the Ambassador have never
been formally defined. It is assumed that as a staff officer of CINCUNC the Economic Coordinator’s
relations will be the same. So long as Korea is an active theater, it
does not appear possible for Executive Order 103384 as amended to be applied.
In a memorandum to you of July 27, 1953 (Tab B)5 the President set forth certain ideas
with respect to economic assistance to Korea, notably for rehabilitation
activities in this period by use of our military resources in Korea and
the securing of coordination by placing the whole responsibility in the
theater commander. The Budget Bureau paper is consistent with these
thoughts of the President.
Recommendations
- 1.
- That you approve the draft memorandum on the organization of
economic assistance to Korea.
- 2.
- That you consult with Mr. Wilson, Mr. Stassen and Mr. Dodge with a view to rapid interagency approval of
the organizational plan, and reply accordingly to the President’s
memorandum of July 27.
[Tab A]
Memorandum by the Director, Bureau of the Budget
(Dodge)
to the President
[Washington,] July 28,
1953.
Subject:
- United States organization for economic aid activities in
Korea
Concurrently with National Security Council consideration of economic
aid for Korea, the Bureau of the Budget has been developing
recommendations for the organization for United States and United
Nations economic assistance activities in Korea. The attached
memorandum prescribing the United States organization for all
economic aid in Korea, including the proposed program which would
use savings resulting from the truce, was developed by the Bureau
with the assistance of the agencies concerned and has the
concurrence of those agencies.
The Tasca Mission recommended
the continuation of the concept of a Presidential representative for
Korean economic affairs, serving under
[Page 1450]
the Commander-in-Chief of the United Nations
Command as long as Korea remains a military theater. Although the
Economic Coordinator provided for in the attached memorandum would
not be a Presidential representative, the other agencies concur with
us in the belief that he would have adequate authority,
responsibility, and prestige to mold the several assistance
activities into an effective program.
The proposed organizational arrangements are designed to give effect
to the following conclusions:
- 1.
- The present responsibility of the Commander-in-Chief of
the United Nations forces for the security of Korea requires
that he have overall responsibility for all United Nations
and United States activities in that country, including
economic programs for relief and rehabilitation.
- 2.
- There will remain in Korea United States military units
whose services and facilities can be used in Korean
reconstruction. Such resources, insofar as they are
available, should be utilized for relief and rehabilitation
wherever this is feasible and is advantageous in terms of an
efficient or economic operation.
- 3.
- A clear-cut division of activities should be established
to the maximum feasible extent among the United Nations
Korean Reconstruction Agency, civilian relief and United
States rehabilitation, so that wasteful duplication are
avoided and the operations are closely coordinated.
- 4.
- In order to achieve integrated planning and execution of
all economic activities in Korea, a single individual, under
CINCUNC, should be
delegated the function of programing for and supervising the
implementation of such activities. This officer should be
delegated the function of providing assistance to the
Republic of Korea on fiscal and economic matters, and should
represent the Foreign Operations Administration in
Korea.
- 5.
- For these purposes he should have staff and authority to
utilize employees of FOA and
Defense, and such UNKRA
personnel as may be provided on a non-reimbursable
basis.
- 6.
- The Foreign Operations Administration, through the Unified
Command, should backstop Korean relief and rehabilitation
programs in Washington, and should develop integrated
programs for submission to the President through the Bureau
of the Budget. This is consistent with the recommendations
in the Tasca
Report.
- 7.
- United States procurement should be handled through the
existing channels—agency or otherwise—deemed most favorable.
Particular emphasis should be given to developing Korean
commercial channels.
- 8.
- The United States should support the UNKRA program. It is agreed
by the agencies concerned that coordination of United States
economic activities and UNKRA activities can be achieved best by United
States representatives seeking an understanding with the
Agent General of UNKRA
that the Unified Command, in consultation with UNKRA, will be responsible
for:
- a.
- Determination of overall requirements and
priorities;
- b.
- Allocation of responsibility for appropriate
fields of activity and projects to the various
implementing agencies;
- c.
- Determination of policies on pricing and credit
and on local currency and its allocation;
- d.
- Negotiations with ROK on broad policy and program matters,
and such other matters, as may be agreed, on behalf
of UNKRA;
- e.
- Deployment of persons made available by UNKRA to avoid
duplication in the planning or operation of
assistance programs;
and that the Agent General of UNKRA will accept and implement such
determinations and negotiations to the maximum extent consistent
with the fulfillment of the UNKRA
mission as determined from time to time by the General Assembly of
the United Nations.
The term “supervision as appropriate” in the attached memorandum is
not intended in any way to limit the theater commander’s supervision
over United States relief and rehabilitation programs. The term is
used to encompass the relationship between CINCUNC and the UNKRA program as described above.
It is recommended that you approve the attached memorandum.
[Attachment]
Memorandum On The United States Organization
For Economic Aid Activities In Korea
- 1.
- In the field the development and supervision as appropriate of
an integrated program of economic aid as a basis for Korean
relief, rehabilitation, and stabilization is a responsibility of
the Commander-in-Chief of the United Nations Command (CINCUNC) until such date as the
Unified Command may determine. During this period, CINCUNC will be responsible for
the coordination of military activities with the economic aid
operations of the United States Government in Korea, those of
the United Nations Korean Reconstruction Agency, and donations
from voluntary agencies, and he will, in turn, assure the
coordination of the foregoing activities with the activities of
the Government of the Republic of Korea pursuant to existing or
future agreements. (It is understood that during this period a
significant portion of the program will be provided through the
utilization of services and facilities of United States military
units.)
- 2.
- An Economic Coordinator will be established on the staff of
CINCUNC in Korea, as his
senior economic staff member.
- 3.
- The Economic Coordinator, who will carry the personal rank of
Minister, will be appointed by the Director of the Foreign
Operations Administration, subject to the approval of the
Secretary of State, the Secretary of Defense, and CINCUNC. The salary of the
Economic Coordinator will be paid by the Foreign Operations
Administration.
- 4.
- In the execution of his responsibility, CINCUNC will look to the
Economic Coordinator as his economic adviser, and will delegate
to
[Page 1452]
the Economic
Coordinator functions including, but not limited to, the
following:
- a.
- Development and supervision as appropriate of
integrated programs of relief, rehabilitation, and
stabilization, and coordination between military and
civilian assistance programs.
- b.
- Representation of CINCUNC on international or joint bodies
dealing with Korean economic matters.
- c.
- Representation of CINCUNC in consultations and negotiations
with UNKRA and other
appropriate UN bodies.
- d.
- Representation of CINCUNC and, as may be agreed, the UNKRA in consultations
and negotiations with the Republic of Korea on economic
matters.
- e.
- Development of United States proposals for economic
stabilization, including those which may be necessary
conditions to the provision of expanded United States
aid to Korea.
- f.
- Collaboration with the Republic of Korea in the
implementation of agreed stabilization measures.
- g.
- Development and negotiation of policies for
controlling the use of local currency in all aid
programs, including priorities and allocations of such
currency for the various projects and operating
agencies, and the sale of local currency-generating
commodities.
- h.
- Development, jointly with appropriate military staffs,
of an agreed allocation plan for the use of available
transport facilities.
- i.
- Coordination of the procurement channels and delivery
schedules for the various commodities and projects. (It
is understood that all procurement, funds allocation and
expenditure, project, and contractual methods inherent
in appropriations language or procedures of the various
United States and international agencies will apply as
prescribed.)
- j.
- Development of policies for the payment of all United
States and United Nations local employees, and for any
non-monetary assistance given them.
- 5.
- The Foreign Operations Administration is designated as the
agency of principal interest within the Unified Command for
Korean rehabilitation and stabilization, and is assigned the
development and direction in Washington of Korean rehabilitation
and stabilization policy and programs, subject to the
responsibilities of other departments and agencies as set forth
in the President’s letter of June 1, 1953. Consistent with
paragraph 6, below, FOA also
will operate FOA-financed
activities under its current instrumentalities and
procedures.
- 6.
- The Economic Coordinator will be the representative of the
Foreign Operations Administration for projects undertaken by
that agency in Korea. He will have: (1) the legal responsibility
of assuring performance of operations in accordance with the
provisions of the Mutual Security Act; and (2) authority to make
administrative determinations normally required by FOA of its field
representatives.
- 7.
- The Foreign Operations Administration will have communications
with the Economic Coordinator, using Unified Command channels,
except that CINCUNC may
comment on any such message.
- 8.
- The responsibilities of the Secretary of State and the
Director of the Foreign Operations Administration regarding
UNKRA and its assistance
program shall be those set forth in sections 2 and 4(c) of
Executive Order No. 10458,6 of
June 1, 1953, as amended.
- 9.
- The Economic Coordinator, in carrying out his
responsibilities, shall have full authority to deploy Foreign
Operations Administration and Department of Defense staff, and
persons made available by UNKRA, in a manner designed to avoid duplication in
the planning or operation of economic assistance
programs.
