611.95B/12–854: Telegram
The Ambassador in Korea (Briggs) to the Department of State
priority
662. Repeated information Tokyo 458. Tokyo pass CINCUNC, CG AFFE/Army Eight. Re Embtel 6581 repeated Tokyo 455.
Called on President Rhee this morning and delivered confidential memorandum. Same participants as meeting December 2 reported Embtel 6442 repeated Tokyo 444. Text of memo as quoted Embtel 6553 except paragraph 5 from which phrase “by Bank of Korea” deleted and amount of hwan 800 million. Meeting lasted only 20 minutes.
President read memo aloud with mounting distaste and annoyance. His first response was to attribute it to unidentified “unfriendly elements” in Washington. Purport of communication seemed fully understood except with reference paragraph 2, since Rhee continues fail comprehend relationship between his attempted freezing of 180 to 1 rate and pricing aid goods into economy.
Re paragraph 3 he inquired when second auction would be held and was informed December 13 (which Wood explained is earliest feasible date in view of public notice and other preparations required). In that connection Wood later suggested would be helpful if ROK Government would sponsor appropriate publicity including its intention have transaction take place with bidders enjoying full freedom. (Wood plans discuss this further with Paek Tu-chin; whether anything comes of it remains to be seen.)
Rhee read paragraph 4 with special irritation apparently controlling his temper with some difficulty.
[Page 1934]Re paragraph 5 he inquired when proposed 800 million hwan loan would be repaid and was informed with proceeds of second auction, to which President said “and suppose you don’t like second auction and don’t buy hwan?” Rhee did not however pursue matter when I reminded him request set forth paragraph 5 based his own offer to advance hwan for US military commitments, made during our meeting on December 2. Whether requested advance is made likewise remains be seen since President did not further commit himself.
At no time during conversation did Rhee admit there was intimidation and coercion of bidders at first auction. It is of interest in connection foregoing that American correspondents have (somewhat belatedly) picked up story of first auction and during past few days have filed stories thereon, attributed to business sources.