795B.00/10–2254: Telegram
1The Ambassador in Korea (Briggs) to the Department of State
priority
476. Following is text memorandum referred to my earlier telegram:2
“The situation in Korea is deteriorating with every passing day. We are still trying, against desperate odds, to survive as a democratic state, to unify our tragically divided country, and to create an austere economy that will permit our bare survival.
Representatives of the United States and the Republic of Korea have failed to achieve agreement after months of negotiations, and we therefore suggest a re-evaluation of all the questions and all the evidence involved.
With the sole purpose of maintaining the most cordial relationship with the United States, of building a strong Korea, and of speeding the defeat of our Communist enemies, we submit the following proposals and suggestions for the consideration of the United States:
- 1.
US agreement to reconsider the matter of Korean defenses.
(Explanation: Militarily we are far weaker and the Communists are far stronger than at the time of the cease-fire. The UN forces are withdrawing, while the Communists are reinforcing. Air supremacy has been sacrificed through withdrawal and through permitting the enemy illegally to activate 40 military airfields in the north.
([Here follows a portion of the memorandum in which the Republic of Korea Government complained of lack of United States support for its military forces.] It is the position of the Republic of Korea that an increase of 15 regular divisions, with all appurtenant equipment, constitutes the minimum increase needed as replacement for the withdrawing UN forces and thus ensure holding the line. In the light of the grave and growing Communist threat to the United States and all free Asia, it is our firm conviction that to reject our military proposals is to risk the loss of America’s strongest ally against communism, and also to risk the loss of the whole Far East).
- 2.
ROK agreement to retain its forces under the operational control of the UNC so long as that command works in cooperation with ROK in its efforts to defend and unify Korea and in addition for the increase of 10 or 15 actual divisions.
[Page 1903](Explanation: We have the highest regard for the leadership of General Hull, and hope that it will continue to be directed toward our joint goal of a strong and unified Korea).
[Here follows paragraph 3 in which the Republic of Korea opposed an American plan to set aside a fixed percentage of total ROK reserves for South Korea’s military establishment.]
- 4.
US agreement to respect ROK currency stabilization.
(Explanation: Inflation already is a terrible threat to the stability of this country. History proves the justification of our fears. In 1945 the currency was won, and the rate was 15 to 1. Under ECA pressure, this was increased again and again—creating cruel inflation and economic chaos. Finally, in 1953 the rate of 23,000 to 1 was demanded, and we changed the currency to hwan (1 hwan representing 100 won) to prevent collapse of the whole economy. The hwan rate then was set at 60 to 1, and later that was trebled to 180 to 1 with the understanding that this rate would remain permanent.
(If this spiral is permitted to continue, we soon shall be back to the 23,000 won rate, and that in hwan. When won was in use, our currency circulation jumped from approximately 55 billion in June of 1950 to almost 1 trillion 137 billion in February 1953. Since then, using hwan, the increase has been 5 fold—from 7 billion to more than 35 billion at the present time. The United States knows that printing-press money is the ruination of any country’s economy, and that is what we are desperately trying to avoid. We ask only that the United States help us by not starting a new rate spiral, and by resuming the regular dollar payments for any hwan advances of this government).
- 5.
US agreement to use its civilian and military authorities to help check the smuggling of Japanese goods and materials into Korea.
(Explanation: Such smuggling has shown dangerous increases in the last few months. It is a threat to our economy and a menace to our security, inasmuch as smuggling and espionage are closely inter-related).
- 6.
US agreement to use its good offices to settle that Korean-Japanese dispute on a basis of the minimum Korean proposals.
(Explanation: The Republic of Korea has repeatedly offered to adjust its differences with Japan but the Japanese have persistently refused our overtures. In the interests of peace in the Pacific, we believe the United States should actively intervene and persuade the Japanese to accept our minimum requirements as a reasonable settlement.
(As a minimum to provide suggestion that the Japanese recognize the fishery peace line, and return the art treasures and the gold reserve. Return of the reserve would permit us to re-establish a sound currency based on gold, and thus would be highly effective in stabilizing our economy).
- 7.
Use of the $280,000,000 aid fund to replace the gold reserve, in the event that Japan is unwilling or unable to do so with its own resources.
[Page 1904](Explanation: This would represent a fair and simple way of bolstering the Korean economy and liquidating a Japanese debt without additional cost to the United States).
- 8.
US guarantee of Korean independence against Japanese aggression.
(Explanation: Korea cannot quickly forget the cruel oppression of 40 years of Japanese occupation, and our fears of a resurgent Japan have not been put to rest by Japanese denial of our sovereignty and threats to return to this peninsula. Such a guarantee would give pause to the Japanese militarists, and would permit us to reach a rapprochement with Japan without imperiling the future of our country).
- 9.
Once other differences are eliminated, the conclusion of commercial agreements among the United States, Korea, and Japan.
(Explanation: The Republic of Korea is fully aware that mutually beneficial trade relations are essential to the well being of free Asia. When extant barriers are removed, we hope to participate in trade with all other free nations to the fullest possible extent).
- 10.
US declaration that it stands for the independence and freedom of all Asiatic nations and peoples on an equal basis.
(Explanation: This will clear the way for other free Asiatic nations to deal with Japan directly, without further fear of military or economic aggrandizement. All of Asia has felt the whip of the Japanese, and United States policy in the Pacific can never succeed until the widely held suspicions of Japan are ameliorated).
[Here follows paragraph 11 in which the Republic of Korea sought a joint agreement to seek Korean unification by whatever means necessary.]
- 12.
Joint agreement to set aside the counterpart funds for reconstruction work.
(Explanation: American aid funds are declared to be designed for the reconstruction and rehabilitation of this war-worn country. But even the most ambitious and efficient dollar program cannot do the job adequately. We must help ourselves to the fullest possible extent, and reconstruction use of the counterpart funds would greatly implement our role in the total program).
- 13.
Appointment of a new UNC economic coordinator for Korea.
(Explanation: The Republic of Korea strongly feels that the whole aid program would be greatly expedited by new direction. It is our position that such direction should be solely concerned with the reconstruction and rehabilitation of Korean economy, without regard to any benefits to be derived, or not to be derived, by Japan or any other nations.
(We have the feeling, rightly or wrongly, that some anti-Korean and some pro-Japanese sentiments have pervaded certain segments of the FOA organization. These attitudes have led to misrepresentation of the Korean position, and to bad feeling that has impeded the assistance program. [Page 1905] We urge that a new start be made in order to strengthen the friendly relations and the cooperation between our two countries).
[Here follows paragraph 14 in which the Republic of Korea asked for amendments to the draft minute to conform with its revisions above.]
- 15.
Cancellation of all previous agreements and understandings between the United States and the Republic of Korea.
(Explanation: During the period of the active war, the Republic of Korea’s Government was operating under difficult emergency circumstances. Our need was so great that we had a tendency to sign anything that was put before us, regardless of the long-term effects.
(This government believes that this is the time to make a new beginning with the United States. Starting with these proposals as a basis, we can negotiate new understandings that will be fair to both countries and that will protect our mutual interests. By so doing, we can eliminate all the misunderstandings of the past, and renew our eternal allegiance and friendship).
The Government of the Republic of Korea has every confidence that the Government of the United States of America will give these proposals and suggestions the careful study and evaluation that this government has applied to them. We believe sincerely that they afford a workable basis for mutual understanding that will contribute tremendously toward a strengthening of the US position in the Far East, toward the creation of a puissant and unified Korea, and toward the eventual collapse of communism throughout the world.”