173. Telegram From the Embassy in Korea to the Department of State1

356. Re Deptel 260 Oct 10.2 As now shaping up, military program calls for twenty active plus ten reserve divisions; two jet fighter [Page 326]bomber wings plus one tactical control squadron and one tactical reconnaissance squadron, and navy of seventy-nine ships. Costs are projected at $580.6 millions for FY 57 and $672.8 millions for FY 58 plus substantial increases in ROK military budget. Latter can be met only by further drain on DS counterpart funds, to serious detriment economic development program.

If program outlined above adhered to, funds as set forth essential. Otherwise, we may end up with large but ineffective force. Factors inherent in military establishment which may lead to serious detriment if not corrected are reduced training, equipment obsolescence, low pay, and long service.

In this situation, I believe best course is return to general intent Agreed Minute. Any reduction in present Army forces must for political-psychological reasons be accompanied by measures which clearly demonstrate increased striking power of reduced forces. To accomplish this, I propose reduction Army forces to ten active plus ten reserve divisions by end FY 59. This reduction to be accompanied by replacement worn-out transport and communications equipment, introduction weapons of atomic capability (i.e., Honest John and Nike); addition one jet fighter-bomber wing plus one tactical control squadron and one tactical reconnaissance squadron; maintainance Navy and Marine Corps at present effective strength.

Reduction in active divisions should be phased over three-year period beginning FY 57 in step with measures to enhance military effectiveness of smaller force. Ground must be prepared by negotiations to obtain consent ROK Government and careful attention paid to impact public disclosure of new measures.

Foregoing seen as only way avoid increases in both MDAP and economic aid levels. Savings effected by reduction in active divisions over three-year period will be absorbed by expenditures for new military equipment and increased economic expenditures, i.e., labor intensive projects to provide employment discharged soldiers. These latter projects would of course accelerate economic development. By FY 60, reduction present levels both MDAP and economic aid should be possible. In any event, it is imperative to avoid realignment of present programs on crash basis if we are not to endanger achievement United States objectives in Korea and indeed throughout Asia.

Replies specific questions reference telegram follow:

1.
a.

U.S. forces.—I do not believe it advisable to reduce United States military strength in Korea at this time. To do so would have an adverse psychological and political effect, creating in ROK public the feeling of gradual United States abandonment. Without United States forces on frontlines, military defense treaty and joint policy declaration do not convey to general public—and even to government—sense of United States commitment to ROK defense. This [Page 327]sense of security essential to success of our political-economic-military program in Korea. Furthermore, reduction in level of U.S. forces inevitably will reduce our control over, and guidance of, ROK forces.

Foregoing arguments do not apply to reductions in personnel achieved through streamlining of forces and modernization of weapons. Essential point is maintenance U.S. troops on front lines.

1.
b.

ROK forces.—A reduction in active ROKA forces and transfer dischargees to reserve status as foreseen in Agreed Minute would not have adverse effect on public opinion, if carried out gradually, in agreement with ROK Government, and coupled with measures to increase military effectiveness ROK forces already contemplated in FY 57–58 MDAP programs. There is resistance to military conscription and many ROKA personnel who have been in service four or five years would welcome opportunity return civilian life and families.

It will of course be necessary to persuade President to accept reduction in ROKA and to explain it in terms that will not impair public morale. Active opposition of President Rhee might lead him to desperate unilateral moves, and would in any event have serious unsettling effect on ROK internal situation.

2.

Substantial reduction in ROK forces would have significant economic effects. Cut of ten divisions in active army strength permitting discharge roughly 300,000 men, would result net reduction forces approximating 275,000. This assures one month active reserve training for men released; cadres for TF reserve divisions already in being. Estimated annual budget savings after completion reduction, assuming budget of 125 billion hwan based on current strength, would approximate 40–45 billion. This estimate based on 35–40 percent saving pay and allowances and food and 20–25 percent reduction all other costs. Savings would be in proportion phasing of reduction over three-year period and would accrue in July after FY–59. Other things constant, United States funding military deficit would be reduced same amount.

In view current unemployment and underemployment problem, not all men released could be immediately integrated into economy. Many soldiers have acquired skills which are in demand and could be readily absorbed by industry. Others would rejoin family units on farm despite existing underemployment. Assuming as many as 125,000 could be absorbed in these and other pursuits during period FY 57–59, 150,000 would lack livelihood after FY 59. Shift in emphasis economic aid program would be needed to ease transition during period reduction forces and perhaps for additional two or three years during which these men could be gradually absorbed in economy. We think this could be accomplished best through development projects in fields reclamation, irrigation, road and bridge construction, erosion control and reforestation all labor intensive involving little [Page 328]direct dollar costs. Road and bridge construction could be planned to meet military needs. Cost of supporting such program in peace year (FY 60) estimated roughly equivalent to savings military budget (210,000 hwan per man per year in wage for 150,000 man plus 10-15 billion for other local currency cost). These costs probably would have to be financed with counterpart to avoid inflationary financing by government. Direct dollar import costs would be small, probably not more than $10 million for program this nature and magnitude. Concentration on labor intensive projects in rural areas would also have favorable political effect by increasing public awareness our aid.

While these calculations necessarily rough, our conclusion is that initially there would be little or no net savings in DS program (estimated at $335 million in FY 58); resulting from reduction troop strength, but shifting resources from military to economic purposes would increase rate economic development and improve prospects for later reduction economic aid.

Reduction ROK forces would also reduce need for consumables financed under DFS.

Reduction United States forces would not have appreciable effect on Korean economy. Dollar purchases of hwan and employment Korean civilians and Korean service corps would be reduced; reduced coal and oil purchases for KNR might save some dollars; port and rail congestion would be relieved somewhat. All these effects would have only marginal impact overall.

3.
Political stability. Any reduction in ROK forces without adequate preparation and consent ROK Government could adversely affect political stability in three ways: (1) by release into economy of large number ex-soldiers who could not be integrated into civilian life; (2) by damaging position of armed forces as stabilizing element and guarantor constitutional processes; (3) by undermining public confidences in United States support President Rhee and thus intensifying opposition to point of possible civil disorder. Reduction carried out in orderly manner and with cooperation ROK Government should have no adverse effect on political stability.
4.
Modernization of weapons. Supplying US forces with more modern weapons might permit moderate reduction these forces, and would undoubtedly lessen adverse reactions thereto. Equipping US forces with [less than 1 line of source text not declassified], if publicly disclosed, would, I believe, have such favorable effects as to permit drastic reductions, 7 to 1 division, for example. Such action would also facilitate reduction ROK forces but would inevitably bring in wake insistent clamor for provision similar weapons to ROK. If we deny these weapons to ROK forces while boasting their provision to United States forces, we must face charges of treating ROK forces not as allies but as mercenaries.

[Page 329]

These comments do not of course take into consideration possible reaction Asia elsewhere free world to cut back ROKA forces; problem presented by armistice provisions; nor repercussions equipping United States forces with [less than 1 line of source text not declassified] would have in other Asian countries.

Dowling
  1. Source: Department of State, Central Files, 795B.5/10–1256. Top Secret; Priority; No Distribution Outside Department.
  2. In telegram 260 to Seoul, the Department requested the Embassy’s views on the following questions:

    • “1. What would be political and psychological effects of reduction US forces? ROK forces?
    • “2. What would be economic effects of such reductions? Can economy absorb? Would rate economic growth be affected?
    • “3. To what extent would reduction ROK Army endanger political stability?
    • “4. To what extent would provision of US forces with more modern weapons lessen or counterbalance adverse political and psychological repercussions of possible US and ROK force reductions? [2–1/2 lines of source text not declassified].” (Ibid., 795B.5/10– 1056)