Office of the Historian

795B.5 MSP/10–2254: Telegram

1

The Ambassador in Korea (Briggs) to the Department of State

confidential
priority
Seoul, October 22, 1954—9 p.m.

475. Following is text revised draft minute referred to my earlier telegram:2

“It is in the mutual interest of the United States and the Republic of Korea to continue the close cooperation in the efforts to unify Korea which has proved mutually beneficial and has played such an important part in the free world’s struggle against Communist aggression and its determination to remain free.

Accordingly,

The Republic of Korea shall:

[Here follows paragraph 1 of the draft agreement which became, in modified form, the second obligation of the Republic of Korea in the approved text of the agreed minute of November 17. The text of the minute is printed in the Department of State Bulletin, November 29, 1954, pages 810–811.]

2.
Accept the force levels and principles set forth in Appendix B which will permit the maintenance of an effective military program consistent with economic stability and within available resources;
3.
Take the necessary measures to make the economic program effective, including those set forth in Appendix A.

Based upon the conditions which the Republic of Korea declares it will create, the United States shall:

1.

Continue its program of helping to strengthen the Republic of Korea politically, economically and militarily, with programmed economic aid and direct military assistance furnished during fiscal year 1955 to aggregate up to $700 million.

[Page 1901]

This amount would exceed by more than $100 million the amount of assistance previously contemplated by the United States for Korea in fiscal year 1955. Of this total, programmed economic aid, including the CRIK carry-over and the United States contribution to UNKRA, available for obligation in fiscal year 1955 would amount to approximately $250 million;

2.
Support a strengthened Republic of Korea military establishment as outlined in Appendix B, including the development of a reserve system, in accordance with arrangements to be worked out by appropriate military representatives of the two governments;
3.
Consult fully with appropriate military representatives of the Republic of Korea in the implementation of the program for support of the Republic of Korea military establishment;
4.

In the event of an unprovoked attack upon the Republic of Korea shall employ, in accordance with its constitutional processes, its military power against the aggressor;

[Here follows paragraph 5 of the draft which was dropped from the approved minute.]

6.
Subject to the necessary congressional authorizations, continue to press forward with the economic program for the rehabilitation of Korea.

Appendix A

Measures for an effective economic program.

1.
With respect to the exchange rates, the official rate of the Republic of Korea Government and the counterpart rate being 180 to 1, agreement to procedures as proposed by the United States for the conversion of dollars at a different and realistic exchange rate to cover hwan drawings of United States by sale of dollars through the Bank of Korea. No hwan drawings are to be continued and the sale of dollars through the Bank of Korea should be made to authorized traders. Accordingly, the existing agreements regarding United Nations hwan loans are to be cancelled;
2.
Agreement that material for the aid program—not furnished from the United States in kind—will be procured wherever in non-Communist countries goods of the best quality can be obtained at the best price (it being the objective to perform the maximum possible procurement in Korea at competitive world prices). However, we must not procure from any country that has trade relations with Communist China or the Northern Korea puppet regime; and
3.
Provision of adequate information to the appropriate United States representatives concerning Korean plans for the use of their own foreign exchange.”

[Here follows Appendix B, which concerns Republic of Korea force levels for 1955 and United States support thereof]

Briggs
  1. The following file number was also printed on the source text: 611.95B/10–2254.↩
  2. Telegram 474, supra.↩