795B.56/8–1651
Memorandum of Conversation, by H. O. H. Frelinghuysen of the Office of Northeast Asian Affairs
| Participants: | Dr. Yu Chan Yang, Korean Ambassador |
| Mr. Pyo Wook Han, First Secretary, Korean Embassy | |
| Mr. Dean Rusk, Assistant Secretary Far Eastern Affairs | |
| Mr. Noel Hemmindinger, NA | |
| Mr. H. O. H. Frelinghuysen, NA |
The Korean Ambassador, at his request, called on Mr. Rusk this morning and discussed the following matters: The 21 million dollar OFLC obligations; the reduction of the Congressional authorization for the United States contribution to UNKRA; the suspense account; and ROK participation in the Japanese Peace Treaty.
OFLC Obligation
Ambassador Yang expressed the hope that the United States would cancel the 21 million dollar surplus property obligation which he claims had been made by the American Military Government in 1947,1 and accepted by the Korean Government in the belief that it was only a formality and would later be cancelled. Mr. Rusk explained to the Ambassador that it would take an act of Congress to cancel or alter the terms of the debt and that any such action would probably result in like demands by other nations who have similar, but much larger, obligations. Mr. Rusk advised the Korean Ambassador that, inasmuch as the annual interest on the obligation was minor in comparison to the huge sums the US was putting into Korea through the military and relief programs, it would be wiser if the Korean Government did not press this matter at this time. Mr. Rusk pointed out that to introduce this subject into Congress at this time when it is harassed by tremendous problems would only serve as an irritant.
Congressional Reduction of U.S. Contribution to UNKRA
The Ambassador expressed concern that the Congressional committee [Page 822] had reduced the authorization for the United States contribution to UNKRA by 100 million dollars. He said that he had discussed this matter with President Truman who had assured him that he should have no fear on this point as the United States would continue to provide the necessary assistance to the Republic of Korea. Mr. Rusk explained that the Congressional committee had cut the requested authorization because UNKRA was not yet in a position to assume relief functions and because the Military was now providing the necessary assistance. He emphasized that Chairman Richards, who had proposed the reduction, recognized the need for relief and rehabilitation assistance to Korea but believed that the 61 million dollars which remained for UNKRA together with the assistance provided by the Military was sufficient for the time being. When UNKRA could assume responsibility for the relief functions, Congress could then consider a bill for further assistance.
Mr. Rusk told the Ambassador that he had pointed out to the Senate Committee that to refuse the full authorization for UNKRA would adversely affect the morale of the Korean people, and United States ability to persuade other UN member states to contribute, and might result in the unavailability of funds when they are needed. The administration would continue to press this view upon the Congress, but it was possible that it would not be accepted even by friends of the administration, since there were strong pressures in the Congress to reduce the over-all Mutual Security appropriation, and this appeared to be one place where a cut would not hurt. Korea need not worry, Mr. Rusk concluded, since there was every indication that Congress would authorize the funds when needed.
The Suspense Account
Ambassador Yang expressed the hope that, in light of Korea’s mounting inflation, the United States Government would repay in dollars the won advanced by the ROK Government. He estimated that won advances to date amounted to approximately 100 million dollars for which the Korean Government has been printing almost one billion won daily. Mr. Han said that 53% of the expenses of the Korean Government were accounted for by won advances to the United Nations Command. Mr. Rusk said that not only had Ambassador Muccio been an earnest advocate on behalf of the Korean Government in this matter, but that there was sympathy in Washington for the Korean Government’s request. He thought he would be able to inform the Ambassador soon that an agreement in principle had been reached to reimburse Korea for won sold to individual members of the U.S. forces. The details would take a little longer to work out.
[Page 823]ROK Participation in the Japanese Peace Treaty
Ambassador Yang said that he must again express his Government’s earnest desire to attend the conference at San Francisco as a signatory to the Japanese Peace Treaty. He emphasized that not only would this do much to boost the morale of his people but also that it would have a beneficial influence in the Far East by refuting the Communist claim that American imperialism acted without consideration of the desires of the peoples of the Far East. He suggested that the Soviet decision to attend might occasion a reconsideration by the U.S. and that it would improve the position of his government in any dealings which the ROK might later have with Japan with reference to other problems such as a fishing agreement. Mr. Rusk said that, although he could give the Ambassador little encouragement on this point and doubted whether the Soviet Union’s presence at the conference would have much effect upon the decision, he would take the matter up with Mr. Dulles. Mr. Rusk explained to the Ambassador that the primary consideration at the conference Would be to maintain a unity of purpose and that inasmuch as Korea’s presence at the conference was not a point on which there was such unity, largely because the ROK had only been recognized as a lawful government in 1948, he did not think that the ROK’s presence would contribute significantly to combatting Soviet efforts to create disunity. He also pointed out to the Ambassador that the absence of a ROK delegation should not be considered as a loss of prestige for ROK, and that it might be wiser for the ROK not to make such an issue of the matter that loss of prestige appeared to result.2
- See Foreign Relations, 1947, vol. vi, pp. 727, 786, and 789.↩
- Shortly after this conversation the Republic of Korea was invited to attend the Peace Conference as a non-signatory power; for related documentation, see vol. vi, Part 1, pp. 777 ff.↩