Foreign Relations of the United States, 1952–1954, Korea, Volume XV, Part 2

S/S–NSC files, lot 63 D 351, NSC 170 Series

Memorandum by the Executive Officer of the Operations Coordinating Board (Staats) to the Executive Secretary of the National Security Council (Lay)

top secret

Washington, December 30, 1954.

Subject:

• Progress Report on NSC 170/1 Korea (Policy Approved by the President, November 20, 1953)

There is attached the second progress report by the Operations Coordinating Board on NSC 170/1, “United States Objectives and Courses of Action with Respect to Korea,” covering the period from March 16, 1954 through November 17, 1954. The report was approved by the Operations Coordinating Board on December 29, 1954.

The following significant developments subsequent to November 17, were noted by the Board:

1. UNKRA.

It has become clear that funds soon will no longer be available to support the UNKRA operation. The U.K. has agreed to make one additional contribution on condition that it will be the last contribution requested and that an orderly liquidation will ensue. The U.S. has accepted this condition and final program of about $30 million for FY 1955 is now possible. The UNKRA Advisory Committee has requested a liquidation plan from the Agent General.

2. UN General Assembly Action on Korea.

On December 11 the General Assembly approved a resolution on Korea by a favorable vote of 50 to 5 (the members of the Soviet bloc) with 4 abstentions (Burma, India, Saudi Arabia, and Syria). The resolution had been proposed by 15 members of the United Nations who had participated on behalf of the United Nations in the action against aggression in Korea, and who had also taken part in the Korean phase of the Geneva Conference. It expressed approval of the report on that Conference made by those nations to the General Assembly. The report had endorsed the two fundamental principles set forth at Geneva as the basis for unification of Korea; namely, that (1) the UN is rightfully empowered to extend its good offices to seeking a peaceful settlement in Korea, and (2) in order to establish a unified, independent, and democratic Korea, genuinely free elections should be held under UN supervision.

In addition, on December 10, 1954, the General Assembly approved by a vote of 47 to 5, a resolution¹ requesting the Secretary General, in the name of the UN Command, to seek the release, in accordance with the Korean Armistice Agreement, of all captured personnel of the UN Command still detained in Communist China. As a result of this resolution, the Secretary General immediately cabled Chou En-lai requesting a meeting in Peiping to discuss the question of imprisoned UN Command personnel. On December 17, Chou En-lai responded favorably to the Secretary General’s request, and a meeting will be scheduled shortly after Christmas. The Department of State, with the assistance of the Department of Defense, prepared background briefing material and documentation for the Secretary General. On December 16, Mr. Robertson and Mr. Phleger discussed this material with him in New York.

Elmer B. Staats

[Attachment]

Second Progress Report by the Operations Coordinating Board to the National Security Council on NSC 170/1

top secret

[Washington,] December 29, 1954.

“United States Objectives and Courses of Action with Respect to Korea”

(Policy Approved by the President, November 20, 1953)

(Period of Report: 16 Mar 54–17 Nov 54)

A. Summary of Major Actions

1. The U.S. has continued to observe the Armistice and has endeavored unsuccessfully through the Military Armistice Commission (MAC) to get full Communist compliance with the Armistice terms. (Page 5, para 5 a²)

2. A political conference to consider the unification of Korea convened April 26, 1954 at Geneva and ended on June 15 when the Communist representatives refused to agree to free elections impartially supervised by the UN. During President Rhee’s visit to Washington in July, he and other ROK officials were told by President Eisenhower, Secretary Dulles and Secretary Wilson that the United States would not support in any way unilateral military action by the ROK to attempt to unify Korea. (Page 6, para 5 b (1) and page 9, para 9 a)

3. The U.S. is redeploying from Korea 4 divisions (additional to the 2 divisions already redeployed) and one regimental combat team. Appropriate elements of air and navy, in consonance with the ground forces redeployed, have been or are being withdrawn. This withdrawal is to be completed about the end of 1954. President Rhee and other ROK officials were notified in July. Korean fear of abandonment by the United States led to vigorous protests by the ROK, including public demonstrations in Korea, but these have now subsided. Approximately two thirds of the other UN nations’ forces are being withdrawn. (Page 13, para 10 b)

4. During President Rhee’s visit to Washington and thereafter, the United States attempted to negotiate with the ROK a firm and satisfactory basis for continuing with our military and economic aid programs for Korea. The principal issues were the level of economic and military aid, the size of the Korean forces to be supported, the adoption of a realistic exchange rate, procurement from the most economical sources (including Japan) for the economic program, and effective cooperation by the ROK with us in pushing ahead with the economic program. A related issue came to a head in October when the ROK cut off hwan advances to the U.S. forces as a result of U.S. insistence that these advances be repaid at 254 to 1, in accordance with existing agreements, rather than at 180 to 1. (Pages 15, 16, para 10 f)

Finally, on November 17, the ROK and the United States initialed an “Agreed Minute.”³ This Minute provides for economic and military programs of up to $700,000,000 in this fiscal year, and for ROK forces totaling 720,000 personnel. It also commits the ROK to the internal measures and to the cooperation with us which are necessary for the effective carrying out of the program. However, it may be expected that the ROK will continue to raise many of the issues which the Minute attempted to settle. A copy of the Minute and its appendices is attached as Attachment 1.

5. On November 17, instruments of ratification of the Mutual Defense Treaty with the ROK were exchanged in Washington, thus bringing it into effect. (Page 12, para 10 a)

6. The military departments and appropriate theater Commanders have reviewed the Van Fleet recommendations with respect to Korea which were taken into account in formulating the agreed military program for the ROK contained in the Minute. (Page 13, para 10 b)

7. An Information Policy Coordinating Committee has been established in Korea, consisting of representatives of all U.S. agencies engaged in economic aid and information programs. The Committee is for the first time in Korea producing a unified publicity campaign concerning all U.S. civil and military aid programs. USIA’s activities continued to support the Armistice but the main emphasis has been placed on U.S. aid. (Pages 11, 12, para 10)

B. Operational Considerations Bearing on Policy

8. The Working Group considers that the basic policies contained in NSC 170/1, as augmented by NSC 5429/2,⁴ are still appropriate. However, the developments reported above have made NSC 170/1 partially obsolete with respect to details of the approved policies. It should, therefore, be revised before the next Progress Report is due.

9. The withdrawal of most of the United States forces from Korea clearly reduces our potential ability to use forceful measures within Korea to prevent the ROK from taking unilateral action, if such orders were issued. Concurrently, ROK potential for unilateral action has increased, since it is no longer practical to restrict the ROK supplies of material and ammunition so drastically as in the past.

On the other hand, there is now less likelihood that the United States forces can, against their will, be embroiled in a conflict initiated by the ROK. And the agreement on the Minute and the carrying out of the economic program create a situation in which it is less probable that the ROK will take unilateral action. No imminent danger is foreseen, especially since the agreed Minute contains a ROK commitment to leave ROK forces under the operational control of CINCUNC.…

C. Emerging Problems and Future Actions

10. Unification

While there is virtually no prospect of Korean unification in the foreseeable future, the ROK may be expected to continue to agitate to achieve this goal by military means. The Communists and even many of our Allies for quite different reasons may be expected to seek a conference of one sort or another to deal with this problem. The combined expression of willingness to negotiate by the Communists and the eagerness of many countries of the free world to continue to negotiate in the hope that (a) at some point in some negotiations the Communists will prove more tractable, or (b) that continued discussions of the problem will prevent tensions from reaching the breaking point, will pose difficulties for the U.S. in its relationships with the ROK on one hand and its other Allies on the other.

The problem must be handled by firm insistence on the part of the U.S. that there is no point in negotiating with the Communists on this issue until they have clearly recognized the competence and authority of the UN in the matter and until genuinely free elections can be held under UN supervision for representatives in a National Assembly in which representation shall be in direct proportion to the indigenous population in all parts of Korea.

11. Neutral Nations Supervisory Commission (NNSC)

Renewed efforts being undertaken to persuade the Swiss and Swedes to withdraw their inspection teams in north and south Korea to the Demilitarized Zone may again end in failure. If so, the U.S. will face a serious problem with the ROK whose continued insistence that the Polish and Czech members of these teams be withdrawn from the ROK may erupt into violent action which would place the UNC in the untenable position of protecting the Communists at the possible expense of Korean lives. Many of our Allies, on the other hand, are opposed to drastic steps to terminate the activities of the NNSC inspection teams. Despite their objections, the U.S. must take steps preferably in consort with the other principally interested nations, but unilaterally, if necessary, to terminate the activities of the NNSC teams in the ROK. In taking such steps, it should be made clear that while affecting those provisions of the Armistice Agreement which provide for the activities of the Inspection Teams, the U.S. considers the remainder of the Armistice provisions valid. The grounds for such action have been laid in repeated representations in the MAC in respect to Communist refusal to permit the teams to operate effectively in the north, and in the clear statements of last April and May of the Swiss and Swedish members on the issue.

12. Economic Program Implementation (FY 1955)

Every effort will be made to obligate the entire U.S. $280 million earmarked for economic aid. However, this may prove impossible because of the delays in implementing the full program, the fact that there are no large single projects for which funds can be obligated as there were in Fiscal Year 1954, and the possibility that additional differences may arise between the U.S. and the ROK particularly with respect to the rate at which aid goods are priced into the Korean economy.

D. Extent of Agency Interest

13. The Departments of State, Defense, and the Foreign Operations Administration have been primarily involved in the implementation of NSC 170/1. In this implementation they have been supported by the United States Information Agency and the Department of Treasury. The Control Intelligence Agency also carried on activities in support of NSC 170/1 which will be separately reported to the Operations Coordinating Board.

Annex A

Detailed Developments of Major Actions

Para 5a:⁵ “Continue to observe the Armistice.”

The U.S. has continued to observe the armistice. However, in spite of continuing efforts through the Military Armistice Commission and the efforts of the Swiss and Swedish members of the Neutral Nations Supervisory Commission (NNSC), Communist non-cooperation has made it impossible to enforce Communist compliance with the armistice terms or to carry out effectively the inspection provisions of the Armistice Agreement. The ROK has made repeated protests and threats against the NNSC, and every effort is being made to dissuade the ROK from precipitate action against it. CINCUNC has, since April 1954, repeatedly recommended dissolution of the NNSC by the following courses:

(1) Through diplomatic channels, getting the Swiss and Swedes to withdraw from the NNSC.

(2) Through mutual agreement between the Communists and UNC in the Military Armistice Commission.

(3) By UNC unilateral action.

Course 1 is being followed but without success to date. Courses 2 and 3 were approved by Defense and are now awaiting State Department concurrence. The U.S., U.K. and France, on behalf of the nations who fought in Korea, will make an informal inquiry of the Swiss and Swedes to obtain their reaction to a course of action which would lead to removal of the Polish and Czech members of the Neutral Nations Inspection Teams from ROK territory. This course of action will involve Swiss and Swedish withdrawal of their personnel from all the Inspection Teams to the Demilitarized zone pending agreement by the two Commands on arrangements which will permit adequate supervision in north Korea. If the Swiss and Swedish personnel leave the ROK, it will be possible to remove the Poles and Czechs since no legal basis will then exist for their presence in either north or south Korea. It is hoped that this concerted approach, together with the suggestion of less drastic action by the Swiss and Swedes than heretofore proposed, will be persuasive and lead to a solution of the problem.

Para 5 b (1): “Seek to ensure that the Republic of Korea observes the armistice by:

(1) Notifying President Rhee formally and letting other ROK leaders know (on behalf of the U.S. and as executive agent for the UN), that if South Korea unilaterally initiates military operations against Chinese or North Korean forces in or north of the demilitarized zone, then:

(a) UNC air, ground and sea forces will not support such operations directly or indirectly;

(b) The U.S. will not furnish any military or logistic support for such operations;

(c) All U.S. economic aid to Korea will cease immediately;

(d) The UN Commander will take any action necessary to prevent his forces becoming involved in the renewal of hostilities and to provide for their security.

If Rhee should ask whether or not UNC forces might be withdrawn from Korea, he should be told that, if he ceases to cooperate with UNC, the UNC will decide its course of action purely in terms of its own interest and without consulting him.”

President Rhee was notified by Vice President Nixon in the course of meetings in November 1953 that the United States would not support the initiation by the ROK of military operations against the Communist forces in north Korea. President Eisenhower informed President Rhee again of this position at the beginning of President Rhee’s visit to the United States in July 1954. In this meeting and in subsequent negotiations with high U.S. officials in Washington this position was made clear to other high ROK officials. Generals Hull and Taylor have made it clear to high-ranking ROK Generals that the U.S. would not support in any way ROK unilateral action and furthermore would not be deluded by efforts to conceal such action as defense against a Communist attack.

Para 5 b (2): “Attempting to obtain from Rhee a formal assurance in writing that he will not initiate unilateral military action at any time against the Communists in or north of the demilitarized zone. If he refuses to give such assurance, the U.S. should inform him immediately that the UNC reserves all rights to take whatever actions it deems necessary to preserve the security of the UNC forces.”

Attempts to obtain from President Rhee a formal assurance in writing that he will not initiate unilateral military action at any time against the Communists in or north of the Demilitarized Zone have been unavailing. However, in the Minute of the ROK-US negotiations signed by the ROK on November 17, the ROK undertook to “cooperate with the United States in its efforts to unify Korea …” and agreed to leave its forces “under the operational control of the UNC while that command has responsibility for the defense of Korea,” unless mutually agreed that the interest of both parties would be best served by a change. These undertakings by the ROK serve, in effect, to accomplish the objective set forth in Para 5 b (2).

Para 5 b (3): “Making UNC plans and dispositions such as to permit maximum flexibility in meeting any likely eventuality and, insofar as possible, to reinforce the statements made to Rhee and to manifest U.S. determination to carry them out.”

The UNC has prepared plans for disposition of UN troops in Korea to permit flexibility in meeting likely eventualities. When the ROK threatened the NNSC, special security procedures were adopted by the UNC to guarantee the safety of NNSC personnel. The ROK Government was informed at that time that the UNC intended to carry out its obligations under the Armistice to safeguard NNSC personnel. There is further reference to U.S. operational planning and withdrawal of forces in the following paragraphs.

Para 6: “In anticipation of the possibility that President Rhee may order the renewal of hostilities by an attack on Communist forces in or north of the demilitarized zone, despite all the actions taken by the U.S. under paragraph 5 a and b above, the U.S. should take the measures stated in Annex A, which is being given separate distribution.”

Para 7: “If ROK forces should renew hostilities unilaterally, the U.S. should, in addition to appropriate actions under Annex A:

a. Stop all economic and military assistance to Korea.

b. Discontinue all logistic or other support to the ROK forces.

c. Take such other military measures as seem feasible and consistent with the security of UNC forces to block ROK offensive action.

d. Evacuate UN civilians.

e. Notify the Communists that the UNC will continue to abide by the armistice terms, but will defend UNC forces against any Communist attack, and will be prepared, if a Communist counterattack against the ROK threatens the security of UNC forces, to undertake such military action as may be necessary for the security of UNC forces.

f. Renew general hostilities with the Communists only if attacked in force by the Communists or if Communist attacks against the ROK seriously threaten the security of UNC forces.

g. Promptly seek to obtain the support of the other members of the UNC, and as appropriate inform the United Nations, of the actions taken by the UNC under UN authority to ensure compliance with the armistice.”

The withdrawal of most of the U.S. combat forces from Korea has decreased the potential ability of the U.S. to use forceful means within Korea to prevent the ROK from taking unilateral action. Concurrently, the ROK potential for such action has increased since it is no longer practical to restrict their supplies of material and ammunition. On the other hand, it is now less likely that U.S. forces can become embroiled against their will. This situation, together with ROK agreement in the Minute to retain their forces under the operational control of CINCUNC and reduced domestic support for military action to unify the country, make it unlikely that such action will be taken. However, because of the reduced potential of his forces, General Hull has requested that the mission assigned to him by Annex A (para d) to NSC 170/1, be appropriately revised. Consequently, a review of Annex A has been initiated.

Para 8: “If Communist forces violate the armistice and renew hostilities in Korea, the U.S. should:

a. Invoke the Joint Policy Declaration by calling upon the signatories to carry out the commitment that ‘if there is a renewal of armed attack, challenging again the principles of the United Nations, we should again be united and prompt to resist. The consequences of such a breach of the armistice would be so grave that, in all probability, it would not be possible to confine hostilities within the frontiers of Korea.’

b. Make clear to the world the necessity of expanding the war to China by air and naval action as the only feasible way of honoring our collective security commitments to the United Nations and our security commitments to the Republic of Korea.

c. Implement the military and diplomatic measures referred to in NSC Action No. 794 of May 20, 1953, as approved following the urgent review by the Joint Chiefs of Staff and the Department of State.

d. Call on other UN members for effective military assistance appropriate to the expanded war against China.”

The Communists in Korea retain the capability to attack with little warning, but their current dispositions and attitude do not indicate an intention to resume hostilities. Appropriate plans exist to counter such an attack should it develop.

Para 9 a: “Continue to seek, by political negotiations between the Communists and the UN (with the Republic of Korea associated with the latter), a unified and neutral Korea under an independent and representative government. To this end be prepared to accept:

(1) A unified Korea friendly to the U.S., without U.S. or other foreign forces or bases in Korea;

(2) United States and Communist assurances of the territorial and political integrity of Korea under the ROK but foregoing all rights granted to the U.S. under a U.S.-Korea mutual assistance pact; and

(3) A level of Korean armed forces sufficient for internal security and capable of defending Korean territory short of an attack by a major power.

The foregoing would not preclude the provision by the United States of economic and military assistance to Korea.”

In discussions of the Korean problem at Geneva, it was evident that the Communists would not agree to any unification that did not permit continuance of the Communist regime. The Communist representatives refused to agree to free elections impartially supervised by the UN. There is little prospect for fruitful negotiation on the Korean problem in the foreseeable future. It is expected, however, that the Communists will endeavor to convince the world that it is possible to negotiate a reasonable settlement in Korea. Furthermore, some of our allies will be disposed to enter such negotiations even without adequate assurances that the Communists have agreed to the principles set forth at Geneva, namely, recognition of the competence and authority of the UN in the matter and genuinely free elections under UN supervision.

Para 9 b: “Continue to exert political and economic pressures against Communist China, including unconventional and covert pressures, at least until settlements satisfactory to the United States can be achieved in the areas around Communist China.”

Political and economic pressures against Communist China have been continued, but have had little discernible effect on Communist policies in Korea.

Achieving a Position of Strength in Korea

Para 10: “Pending a political settlement and in the absence of a violation of the armistice, the United States should, conditioned upon the satisfactory cooperation of the Republic of Korea, continue to observe the armistice and try to avoid renewed fighting; accept the division of Korea on the present demarcation line while seeking a satisfactory solution of the Korean problem by the use of other than military pressures; tie the Republic of Korea into the U.S. security system and develop it as a military ally.”

“To this end the United States should:” (Specific sections of para 10 cited below and discussed separately)

The danger of a renewal of hostilities by either the Communists or the ROK has declined and appropriate measures to reasonably safeguard against renewal of hostilities have been taken. On the other hand, the prospects for unification of the Korean peninsula appear remote. Consequently, the primary emphasis of current policy toward the Korean problem is an effort to achieve a position of strength in the ROK. This effort was the focus of U.S. interests during the ROK-U.S. negotiations in Washington, July–September 1954. A Minute of the understandings reached during these consultations was signed by the U.S. and the ROK on November 17, 1954 (see Attachment 1). This Minute sets forth in specific terms the levels of economic and military aid the U.S. is prepared to grant to the ROK in this fiscal year and makes the granting of such aid contingent upon specific ROK undertakings which are regarded by the U.S. as necessary to render this aid effective. The program set forth in the Minute should substantially fulfill the courses of action set forth in this section of NSC 170/1. The degree to which the program will be successful, however, will depend on the speed with which U.S. aid can be made effective and on the degree to which the ROK honors its undertakings. While the ROK has committed itself to the program set forth in the Minute, it has expressed strong dissatisfaction with the levels of economic and military aid and with policy commitments asked of it. There is reason to believe that many of the points agreed to will again become contentious issues, impeding the progress of the program and requiring patience and firmness to resolve.

USIA actions in support of NSC policies toward Korea fell principally under paragraph 10, NSC 170/1, and specifically under the two parts of this paragraph which state “to try to avoid renewed fighting” and “to tie the Republic of Korea into the U.S. security system and develop it as a military ally.”

The emphasis in the USIA program in the ROK has been shifted to the U.S. economic aid programs. The chief aim is now to persuade the government and the people of the ROK that efficiently administered U.S. assistance is establishing a stable economy and is providing needed support for the ROK to maintain sufficient armed strength to repel or deter aggression and preserve ROK independence. USIA is continuing output on a lessened scale on the theme of preventing unilateral resumption of hostilities by the ROK. This change in emphasis follows the evaluation made in the Progress Report of March 31, 1954 that the likelihood of unilateral military action by the ROK has diminished.

In the belief that the top level ROK officials are not amenable to USIA persuasion on issues where the U.S. and ROK differ widely, the following target audiences were established during the period of this report: press and radio personnel, second-level officials; education, business and professional leaders, students, ROK Army and ROK police; and the general agricultural populace. The latter group receives the U.S. economic aid message through a mass program of motion pictures and posters. Both the economic aid message and the theme of Free World unity in the face of the Cold War are directed at the more sophisticated groups through books and publications, motion pictures and personal contacts. The objectives are: (1) to preserve the hearty friendliness toward America which is characteristic of the Korean people, if not of their leaders, and (2) to cultivate all groups which might be in a position to influence succeeding ROK administrations. Thus, the USIA program is now aimed more at the long-range objective of preserving a friendly government in Korea.

USIA has taken the lead in setting up within the last six months an Information Policy Coordinating Committee in Korea, composed of representatives of all U.S. civil and military agencies engaged in economic aid, civil assistance, and public information work in Korea. USIA field officers report that they are receiving very effective cooperation from the various offices concerned, and that for the first time, all U.S. programs in Korea are being coordinated in a coherent publicity campaign.

Sample actions include:

A. The choice of a slogan “Strength for Korea from America”.to be stenciled on all economic and military aid goods.

B. Joint production of motion pictures and radio programs by USIA and the military command concerning U.S. aid in Korean reconstruction. (Motion pictures are considered the most effective medium of information in the ROK).

C. Production of posters and instructional booklets by the Army Psychological Warfare Section for distribution through USIA to the ROK Army.

D. FOA supervision of the production of illustrations on the FOA program in Korea for inclusion in USIA wall posters, leaflets, and pamphlets.

USIA provided guidance and press and radio reporting to the world on the Korean phase of the Geneva Conference, with the aim of fixing the blame for failure to reach agreement squarely on the Communist side.

The USIA Seoul library collection, which was dissipated in the war, is being restocked and a much larger, separate building is being sought for a center devoted to material on economic reconstruction.

Para 10 a: “Ratify the Mutual Defense Treaty with the Republic of Korea.”

An exchange of ratifications of the Mutual Defense Treaty between the U.S. and ROK took place November 17, thus bringing the Treaty into full force and effect. Efforts to further tie the ROK into the U.S. security system through the Western Pacific security arrangement, called for in NSC 5429/2 have been started by emphasizing to the ROK the need for satisfactory working relationships between the ROK and Japan. Thus far, however, the ROK has heightened its public criticism of U.S. security policies and its propaganda attacks on Japan. The U.S. should continue efforts to formalize broad security arrangements with the ROK, but it may prove impossible, particularly with respect to arrangements involving Japan, to do so in the short range.

Para 10 b: “Build up and maintain the security position of the ROK consistent with the armistice terms, and in a manner and to an extent that will permit the phased and orderly redeployment of the bulk of U.S. armed forces at the earliest feasible date.”

Activation and training of ROK defense units has continued in accordance with the established U.S. position and consistent with the Armistice terms. The U.S. has announced its intention to redeploy from Korea 4 divisions and one regimental combat team during FY 55. The phased withdrawal was begun on 12 September 1954, and is to be completed, approximately, by the end of 1954.

As stated in the agreed Minute (Attachment 1), the U.S. has indicated to the ROK its willingness to support a total ROK defense force of 720,000, to provide the ROK Air Force a wing of jet planes as Koreans become capable of utilizing them, to lend a small number of additional vessels to the ROK Navy, and to grant other specific military assistance. Planning for augmentation and modernization of ROK forces, along the lines outlined in the Minute, has been going forward and, with ROK agreement to the Minute, action implementing these plans can be implemented fully.

Some phases of the military program for the ROK have already been implemented. These include approval of the initiation of the program for the training in the U.S. of Korean jet pilots and the preparation for the loan to the ROK of nine (9) naval craft.

The Van Fleet Report recommendations with respect to Korea have been taken into account in formulating the assistance the U.S. would extend to the ROK and the conditions under which this assistance would be extended.

President Rhee and other ROK officials, both publicly and in private discussions subsequent to Rhee’s departure from Washington, objected vigorously to both the level of the ROK forces the U.S. had indicated it would support and to the “premature” withdrawal of U.S. forces. However, these protests have now subsided.

Para 10 c: “Carry on a vigorous campaign to secure additional armed forces from other UN members for service in Korea in accordance with the existing formula (see Annex B), covering reimbursement of U.S. expenditures for such forces.”

Efforts to secure additional armed forces from other UN members are impractical in view of the general military situation and the stepped-up withdrawal of U.S. forces. Efforts to persuade other countries to maintain at least the minimum levels recommended by CINCUNC have been successful, and there now exists sufficient forces to comprise an understrength UN division, which together with the two U.S. divisions will make up a UN corps. NSC Action 1087⁶ recognized that paragraph 10 c of NSC 170/1 could not be implemented.

Para 10 d: “Working in and through the organs of the UN where feasible, continue to strengthen the government and democratic institutions of the Republic of Korea.”

The United States has continued efforts through the UN to strengthen the government and democratic institutions of the ROK. Due largely to U.S. efforts, made with the purpose of discouraging anti-democratic election practices, the delegations to UNCURK were filled out shortly before the ROK general elections of May 20, 1954, and UNCURK was thus able to observe the elections. Subsequently, UNCURK moved its headquarters to Seoul, with U.S. assistance. Although the atmosphere of the general elections in 1954 was in many respects less free than those of 1948 and 1950, UNCURK made a report on them that was on the whole approbatory. The U.S. has continued to support UNKRA by contributing about 65% of its budget and by urging additional contributions from other UN countries. The lack of financial support of UNKRA, however, may require its liquidation during Fiscal Year 1956 or possibly even this Fiscal Year.

Para 10 e: “Pending a satisfactory understanding with the ROK Government with respect to internal measures required to achieve economic stability, make such use of UNC facilities in Korea as is practicable, consistent with the primary mission and security of the UNC, to provide assistance to the Korean people in order to give tangible evidence to them of the value of U.S. friendship and assistance.”

The U.S. is continuing to make use of UNC facilities in Korea to provide assistance to the Korean people. During FY 1954, $15 million in materials was made available for this purpose. This program of assistance, although relatively small, was highly successful in terms of relationship with the ROK. By July 20, 1954, 544 projects, including 146 schools and 94 civic buildings, had been completed, and 819 projects were underway. The value of projects completed or underway is estimated as $15.7 million. A total of $5 million is earmarked for purchasing materials for this program in FY 1955.

Para 10 f: “Conditioned upon a satisfactory understanding with the ROK Government with respect to internal measures required to achieve economic stability, implement the present expanded program of economic assistance in that portion of Korea controlled by the ROK and the UNC, subject to the following conditions:

(1) The Republic of Korea satisfactorily cooperates in maintaining the armistice in effect.

(2) A standard of living approximating the 1949–1950 levels should be the goal toward which the program should contribute.

(3) The investment component of the program should be increased as rapidly as is consistent with economic stability.

(4) The investment program should be restricted to those projects contributing to the goals stated in subparagraphs (2), (3) and (5) of this paragraph, and should place greatest emphasis initially on projects contributing most immediately to better living conditions and future increased productivity for the Koreans.

(5) The program should be directed toward an economy which the Republic of Korea could support with a minimum of future external aid.”

Implementation of the expanded program of economic assistance to Korea continued at an accelerated rate in the second half of FY 1954, and by June 30, 1954, the entire 200 million had been committed by FOA. Because the bulk of these funds were committed in the second half of FY 1954 and because a substantial portion of the funds were committed for long range capital projects, i.e., thermal electric power plants and a fertilizer plant, the actual arrival of aid goods and construction of investment projects has not been commensurate with fund availabilities. On the other hand, the huge ROK military budget deficit is resulting in currency expansion and the inflation began to quicken beginning in April 1954. It became increasingly clear during FY 1954 that the aid funds would be insufficient to permit the substantial investment program necessary for measurable progress toward viability given the existence of the large ROK military forces. The Economic Coordinator, Mr. C. Tyler Wood, therefore, recommended that the FY 1955 funds be augmented by approximately $100 million for aid of a defense support character if unmanageable inflation is to be avoided. In the agreed Minute of the ROK-U.S. talks, the U.S. has made a commitment to make available up to $700 million in economic and military aid, which is more than $100 million in excess of the amount originally budgeted. This aid is contingent upon the ROK undertaking certain economic measures designed to make U.S. aid most effective.

Para 10 g: “Continue in effect all pertinent instructions to the UNC involving the maintenance of the security of U.S. forces in the Korea area.”

There have been continued in effect pertinent instructions to the UNC involving the maintenance of the security of U.S. forces in the Korean area.

Para 10 h: “Conduct a high-level diplomatic campaign to persuade our allies to accept U.S. courses of action and contribute to their support.”

The Department of State continued its campaign to persuade our Allies to accept U.S. courses of action and contribute to their support, and in this respect made a significant achievement at the Geneva Conference. Despite Communist attempts to divide the Allies and ROK refusal to agree to the unification proposal the Allies wished to advance, and which the U.S. might have been willing to support, general unity of diplomacy was maintained throughout at the Conference, culminating in a joint statement by the Allies terminating the negotiations on Korea. Meetings of the Sixteen have continued. Substantial unity has recently been effected on efforts to secure Swiss and Swedish withdrawal from the NNSC.

Para 10 i: “Continue a program of covert operations designed to assist in the achievement of U.S. objectives vis-à-vis Korea”.

CIA will report separately on this subject.⁷

[Here follows a text of the Agreed Minute of November 17, its Appendices A and B, and a draft letter from Wilson to Sohn with an attachment entitled “Noncombat Units Whose Deletion From the Standing ROK Army Was Recommended by General Van Fleet.”]

1. The reference is to UN General Assembly Resolution 906 (IX); text in UN document A/2890, p. 56. For related documentation, see volume xiv.
2. The reference was to Annex A, below.
3. For text, see Department of State Bulletin, Nov. 29, 1954, pp. 810–811.
4. For text of this NSC paper, Aug. 20, 1954, entitled “Review of U.S. Policy in the Far East”, see volume xii, Part 1.
5. From NSC 170/1, Nov. 20, 1953, p. 1620.
6. For text, see the memorandum of discussion at the 192d meeting of the NSC, Apr. 6, p. 1775.
7. Not found in Department of State files.