Foreign Relations of the United States, 1961–1963, Volume XXII, Northeast Asia

210. Telegram From the Embassy in Korea to the Department of State⁰

Seoul, April 11, 1961, 8 p.m.

1349. Embtel 742.¹ As termination of my mission here approaches, I would single out four paramount questions not susceptible to ready conclusive answers which point to actions and postures I believe we should take over extended period. At same time reftel continues to represent comprehensive and current summation Emb’s views on Korean scene.

(1) How best to bring our influence to bear on ROKG in order to have Koreans take measures we believe decidedly in their as well as in our interests?

Press stories to the contrary notwithstanding, these past several months in Korea have seen considerable accomplishment, including such basic reforms as institution of realistic unitary exchange rate, conclusion of new bilateral aid agreement,² measures to put “sick” industries on their feet, to raise transportation power rates, as well as rationalize the electric power industry. These important products of “Dillon Package”³ required a lot more cooperative resolve and effective background political action than the Chang Myon govt has been given credit for. Moreover, these measures, taken as a whole and particularly in context Jan-Feb food shortages and resulting rising price trends, imposed short-term hardships and inevitable popular reactions which ROKG and ROK-US relations had to weather.

Rigors of these accomplishments put our relationships and ROK constitutional system to new trial and highlighted question of ROK sovereignty and question of US respect for ROK sovereignty. ROK sensitivities particularly stirred up as result of conclusion by end of February of new bilateral aid agreement which somewhat irrationally regarded by ROKs as derogatory of their sovereignty and language of which gave considerable offense. Incident brought out fact that nationalism in Korea, delayed by war and reconstruction, now becoming an important factor in Korean life. Moreover, pressures on ROKs to normalize aid procedures and economic relationships with US gave new prominence to status of force question on which no action was taken.

Yet our general approach of holding out additional assistance to ROKG only in return for ROK compliance with specific conditions seems to have been highly successful in achieving results we had sought unavailingly for years. Question arises therefore how in period of rising nationalism and of perhaps declining overall US assistance US can nevertheless pursue same general tactic as reflected in Dillon letter, exerting greater influence on ROKs to place their house in order. Tremendous tasks lie ahead, including spurring economic development, eliminating corruption, promoting the austerity movement, etc., without taking steps which involve “interference” from US, these things likely not to be done in time, yet if we overplay our hand and stir up serious ROK resentment, our efforts could be dangerously counter-productive.

Basic answer lies in being firm in our councils, yet never treating ROKs as less than equal, of consulting them properly on international issues, and of maintaining sympathetic understanding for a nation which has gone through great agony, remains divided, and has enormous economic and political problems. ROKs are tested friends looking to US leadership and guidance but not wishing to be reminded of dependency on US. In present nationalistic setting, bringing our influence to bear more effectively on ROKG will take some doing. Answer would seem to lie in exerting more influence by doing it less conspicuously. Aware of this problem for some time, Embassy has already devised many techniques for quietly influencing legislators and ROKG executive branch. More and more and more meetings with PriMin have been held without knowledge of press through rendezvous at my home or elsewhere. Visits to Korea of influential US officials would be helpful in this regard, assuming, of course, that our counsels would be discreetly conveyed; and visits to US of key ROK officials (like FinMin Kim last fall) should be utilized to maximum effect. Above all, it will require hard, sustained efforts applied widely but with the ultimate in diplomacy, tact and patience.

(2) How to make the ROK democratic system more effective?

Here I feel we must do more to influence PriMin Chang Myon to exercise leadership—an ingredient definitely lacking at present in Korean political scene. He is no dynamic leader by nature and it will be difficult to alter this style which reflects PriMin’s own personality and character. However, we should continue to urge that PriMin act decisively to get through important bills or act on other needed measures, bearing in mind that when he has acted in a forthright, forceful way, results have been good for country and party. This is not to suggest that he should act autocratically or without proper consultation with opposition. Indeed one of his faults has been failure on occasion to prepare groundwork for more expeditious legislative action through adequate consultation with opposition leaders as well as elements his own party.

Particularly in these challenging times, PriMin and his cohorts cannot afford to act in politics-as-usual manner. They should recognize that semi-emergency times call for statesmanship, greater unity and concerted effort.

We have also counselled PriMin—although he seems to have been unresponding so far and therefore our counsels should perhaps be more strongly accentuated—to get out among his own people, to break free from the chrysalis of Seoul politics and identify himself as the kind of leader of the people who understands their problems and spearheads their interests. For example, PriMin and Cabinet members never visited areas reported to be suffering from famine during past several months.

We would also hope to induce PriMin to show better judgment in some of his appointments, notably in the diplomatic field, and to show greater disposition for drawing younger leaders into top positions—particularly younger leaders pledged to integrity and austerity in Korean life. In latter regard, pervading effects of oriental family system and traditional respect for elders is going to make it difficult to achieve quick progress in having wider, more influential participation of younger leaders in politics, business and society. Nevertheless, it is apparent that there is sharp divergency between the convictions, training and values of the Korean under thirty as compared with his elders. It is obviously to our advantage that these younger elements be able make their contributions through the established conservative political parties. We should not try to force them into a premature prominence but we should be alert for opportunities to assist them to gain experience and public recognition. The emergence of such younger elements might also provide a factor which at present time is sadly lacking in Korea, i.e. a group which knows that a modern state can limit graft and corruption in both govt and business and that South Korea can hardly hope survive unless it does take such measures.

Furthermore, we must discourage any ROKG tendency to rely on repression as means of retaining power. While there is need for tightening up security laws in Korea, communism and leftism will be far more effectively counteracted by positive measures to improve national wellbeing (such as National Construction Service) than by anti-Communist laws. Accent must be upon the positive, not upon the negative. Korea must be made to look forward rather than backward.

(3) How to inculcate greater hope among ROK in their own future and greater mutual trust and confidence among themselves?

I am increasingly persuaded that this is the basic psychological problem here. Stark, bleak facts of economic life and frustrations over continued divisions of Korea are prominent among factors explaining widespread feelings of hopelessness in future, continuing mutual recriminations among Koreans who as a people have been traditionally addicted to distrust of fellowman, and all this creates an atmosphere wide open to exploitation by enemies of a free Korea. To overcome this deeply disturbing state of national mind involves improvement of conditions of life and closing the widening gap between ROK expectations and the actual rate of progress toward those aspirations.

A carefully conceived and rigorously pursued long-range economic development plan is an absolute necessity, providing not only the blueprint for action but also the grounds for hope and a sense of achievement that would go with the formulation and execution of such a program. ROK increasingly aware of importance such planning and govt busy on developing plans in consultation with US advisers. ROKG has hailed new US administration’s recent announcement of proposal to give US economic aid programs on long-term basis for economic development purposes and in harmony with recipient countries on long-range development programs. This announcement in itself injected a new ray of hope in ROK community.

If National Construction Service proves to be the important benefit to Korea which I believe it will be, its continuation should be encouraged and supported by US.

Japan, longtime and natural trading partner of ROK, offers great possibilities for developmental aid to Korea—at least in form of long-term investment loans—and for furnishing technological assistance which Korea eminently requires. Recent efforts of Italian and German private interests (backed by their respective govts) to enter Korean development with long-term credits for industrial projects have been welcomed by ROKG and should be encouraged by US. On other hand, although ROK foreign investment law has now been in effect for over 15 months, there has been no rush of foreign private investors to Korea and not one capital investment project has actually been initiated under this law. Since the law itself appears to provide adequate safeguards for investment, political and social instability seem to be main inhibiting factors.

Also needed to counteract lack of faith and hope among Koreans is more responsible press and a far better govt information service. We are working hard in encouraging progress in these fields. Press, of course, responds best to advice from newspaper contacts from abroad. A recent letter from IPI Director criticizing Korean press irresponsibility had deep impact. This kind of approach should be repeated.

(4) How to bring about soonest normalization ROK-Japanese relations and establishment of mutually beneficial ties between ROK and Japan?⁴

Past few months marked by discouragingly slow pace in this direction.ROKG at last realizes time is working against it and, within limitations set by Korean political scene, is working hard for early settlement. Unless improved progress in current ROK-GOJ talks is not soon forthcoming, I believe we should consider whether US taking more active role in trying to induce settlement might not be less risky than permitting situation continue to drift. There may be temptation to transfer this middleman responsibility to another third party such as ICJ or neutral group but it is doubtful that any outside group could be as efficacious in bringing ROK and GOJ together as US.

So much for the four main questions emerging from events of past few months. Additional to these and to recommendations contained in reftel, I feel that there are two basic problems which have received inadequate attention and need redressing. I refer to problem of excessive population growth and to problem of excessive numbers of unemployed college graduates. These phenomena, if unmitigated, are going to be dangerously compromising to the viability, stability and security of free Korea. Korea would do well to examine and emulate, as valid and desirable, family planning methods being pursued in India and elsewhere. High literacy and educational system in Korea furnish useful background in this regard. As to unemployed graduates of higher institutes, I believe we should exert influence to encourage more vocational technical and scientific training at expense of liberal arts and law, plus higher entrance and graduation requirements for college students.

In relinquishing my duties here, I wish to thank those many able colleagues of all US agencies represented in Seoul who, reinforced by excellent guidance and backstopping from Dept and other agencies in Washington, are so effectively promoting US interests in this strategic peninsula.

McConaughy

0. Source: Department of State, Central Files, 795B.00/4-1161. Confidential; Priority. Repeated to Tokyo and to CINCPAC for POLAD.
1. Reference should be to telegram 942, January 31, which was the Embassy’s “comprehensive and current summation” of the Korean scene. (Ibid., 795B.5-MSP/1-3161)
2. Officially “Agreement providing for economic, technical and related assistance, with agreed minute and exchange of notes,” which entered into force on February 28, 1961. (TIAS 4710)
3. The “Dillon Package” was embodied in a letter with two annexes from the Under Secretary of State Dillon to Prime Minister Chang Myon, October 25, 1960. Dillon’s letter offered the ROK $165 million of Defense Support Assistance plus $7.3 million in Technical Cooperation Assistance, but required the ROK to make a series of reforms in its exchange rate, to normalize its aid procedures, to raise significantly public utility and transportation rates, and to resolve outstanding problems related to effective use of aid. Dillon’s letter plus two annexes are in telegram 382 to Seoul, October 25, 1960. (Department of State, Central Files, 795B.5-MSP/10-2560)
4. At the 476th meeting of the National Security Council on February 9, Secretary of State Rusk stated that he attached great importance to encouraging the ROK to reopen relations, particularly trading relations, with Japan. (NSC Action No. 2402-b, approved by the President on February 11; ibid., S/S-NSC (Miscellaneous) Files: Lot 66 D 95, NSC Record of Actions)