Foreign Relations of the United States, 1958–1960, Japan; Korea, Volume XVIII

225. Memorandum From the Director of the Office of Northeast Asian Affairs (Parsons) to the Assistant Secretary of State for Far Eastern Affairs (Robertson)⁰

Washington, June 4, 1958.

SUBJECT

• OCB Progress Report on Korea (NSC 5702/2)¹

The Board Assistants are scheduled to consider on June 6 the attached draft progress report on Korea,² which has been prepared by the OCB Working Group.

The report states that, although a review of NSC 5702/2 in its entirety is not recommended, paragraphs 9a and 10 should be reviewed because of their limitation to FY 1958 and of virtual completion of negotiations with the ROK for reduction in ROK armed forces. The report, in evaluating progress since March 9, 1957, concludes that:

1. There has been no tangible improvement with respect to the long-term US objective of unification.

2. Gradual but tangible progress has been made in the development of democratic institutions and political stability in the ROK. On the economic side, price inflation has been halted although inflationary pressures continue and there has been no substantial change in reliance on large-scale US aid. ROK-Japanese relations have improved to the extent that appreciable numbers of detainees have been mutually released and that negotiations were resumed on April 15 for the removal of problems, looking toward a possible normalization of relations between the two countries.

3. Pursuant to paragraph 10a of NSC 5702/2, the ROK has agreed to a reduction of ROK armed forces to 630,000 from 720,000 by December 31, 1958, an agreement which is now in the process of being formalized.

4. Following United Nations Command suspension on June 21, 1957 of the reinforcement provisions of subparagraph 13d³ of the Armistice Agreement, modernization of US forces in Korea has been initiated by the reorganization of the two US divisions into pentomic units, including the introduction of the Honest John and the 280mm cannon into Korea. Action has also been initiated by the USAF to introduce a Matador group.

Among the major problems listed are the question of maintaining financial stability, the achievement of eventual economic self-support, the scarcity of private capital and managerial and administrative talents, the development of fully acceptable projects under the Development Loan Fund, the need to develop a more stable government in accordance with US long-term political objectives, the normalization of ROK-Japanese relations, and the resolution at departmental level of the differing views on the responsibility for administration of US economic aid programs in Korea in conformity with Executive Order 10575.

The question of the Chinese Communist statement of May 6, delivered to the British Chargé in Peiping for delivery to the Sixteen, has not been covered in the attached report but will be included in an updating memorandum when the report goes forward to the OCB.

Recommendation:⁴

That you approve the draft OCB progress report.

0. Source: Department of State, Central Files, 611.95B/6–458. Secret. Drafted by Lane and approved by Parsons.
1. For text of NSC 5702/2, “U.S. Policy Toward Korea,” August 9, see Foreign Relations, 1955–1957, vol. XXIII, pp. 489–498.
2. Dated May 28; attached but not printed. A copy of the OCB Progress Report on Korea, adopted by the OCB on June 25 and noted by the NSC on July 3, is in Department of State, OCB Files: Lot 62 D 430, Korea 1953 to date; see Supplement.
3. Paragraph 13d of the Korean Armistice Agreement signed on July 27, 1953, prohibited “the introduction into Korea of reinforcing combat aircraft, armoured vehicles, weapons, and ammunition; provided, however, that combat aircraft, armoured vehicles, weapons, and ammunition which are destroyed, damaged, worn out, or used up during the period of the Armistice may be replaced on the basis of piece-for-piece of the same effectiveness and the same type”. For text of the Armistice Agreement, see TIAS 2782; 4 UST 234–354.
4. Approved by Robertson.