Foreign Relations of the United States, 1955–1957, Korea, Volume XXIII, Part 2

204. Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Robertson) to the Under Secretary of State (Herter)¹

Washington, March 4, 1957.

SUBJECT

• Progress Report on Korea (NSC 5514)²

A draft of the semi-annual Progress Report on Korea, which will be considered by the Operations Coordinating Board at its meeting on March 6, 1957, is attached.³

The report states that the OCB does not recommend any revisions in NSC 5514 except for those required to accommodate the recent NSC decision on force levels. The report, in evaluating progress during the past six months, concludes that:

1. There has been no significant improvement with respect to the long-term United States objective of unification.

2. United States assistance has succeeded in maintaining a large and effective ROK military force and in making substantial progress in the rehabilitation of the economy to prewar levels, but fundamental economic problems remain.

Among the major problems listed are the replacement of obsolete weapons, the lack of effectiveness and stability of the ROK Government, the continuing inflationary pressures, the need to shift emphasis from rehabilitation to economic development, the current food shortage, and the bringing of the present organizational arrangements in Seoul into conformity with Executive Order 10575.⁴

Paragraph B 11, “Korean Obligations,”⁵ was put in at the strong insistence of Treasury and the Bureau of the Budget. FE does not consider these problems of sufficient significance to warrant inclusion but was unable to convince the representatives of the other agencies. The FE representative made it clear that we would not concur in applying “sanctions” against the Republic of Korea to collect these bills.

The other major interagency difference involves paragraph 10(a)⁶ relating to the organizational setup in Seoul which Defense has asked be deleted on the grounds that it does not constitute an operational problem.

1. Source: Department of State, OCB Files: Lot 62 D 430, Korea–1953 to Date. Top Secret. Drafted by Nes and Barbis.
2. Document 196.
3. Not found attached. A copy of the report, which was adopted by the Operations Coordinating Board with minor changes on March 6, is in Department of State, S/S–NSC Files: Lot 63 D 351, NSC 5514. A summary of the OCB consideration of the report on March 6 is ibid., OCB Files: Lot 62 D 430, Preliminary Notes on Luncheon Meetings.
4. Executive Order 10575, issued by President Eisenhower on November 6, 1954, provided for administration of the foreign aid programs authorized by the Mutual Security Act of 1954. For text of Executive Order 10575, see Department of State Bulletin, December 13, 1954, pp. 914–917.
5. Paragraph B11 of the Progress Report reads: “There continue to be areas in which the Korean Government has not yet met its obligations, such as local currency interest payments on the surplus property and rentals for the use of U.S. Government-owned commercial vessels.”
6. Paragraph 10a of the report dealt with the question of responsibility for the supervision and coordination of the economic assistance program which was being administered by the Economic Coordinator as CINCREP under CINCUNC. The Department of State wanted this function brought within the Ambassador’s overall area of responsibility, as was the usual practice at other posts. The Department of Defense opposed such a move, but the report expressed the hope that “normal administrative arrangements” could be organized by July 1, 1957. July 1 was the date established for the separation of the CINCFE and CINCUNC Commands, at which point the CINCUNC Command was to be transferred to Seoul.