Conference files, lot 60 D 627, CF 160
No. 671
United States Minutes of the Second
Meeting Between President Rhee
and the Secretary of State
DRT MIN 2
Subject:
- Economic Assistance to the Republic of Korea.
Participants:
- ROK
- President Syngman Rhee
- Prime Minister Paik1
- Foreign Minister Pyun
- Defense Minister Sohn2
- Minister Kim
- United States
- Secretary Dulles
- Secretary Stevens3
- Ambassador Lodge, United States Representative to United Nations
- Ambassador Briggs4
- General Maxwell Taylor, Acting CINCUNC
- Assistant Secretary Robertson, FE
- Assistant Secretary McCardle, Public Affairs
- Mr. Arthur Dean, Consultant
- Mr. Kenneth T. Young, Jr., Director, Office of Northeast Asian Affairs
- Mr. Niles Bond, Counselor of Embassy
[Here follows discussion of economic assistance to Korea; for text, see the memorandum of conversation by Young, volume XV, Part 2, page 1475.]
Korean-Japanese Relations
Secretary Dulles took the opportunity afforded by President Rhee’s last remark above to present in broad detail the economic, political and strategic status in Japan of the Far East and the need for President Rhee to change his thinking regarding Japan in order to take account of Japan’s status and importance. The Secretary said that both Korea and the United States should look at the situation as a whole, because it is necessary to recognize that Japan must be allowed to live. If Japan goes communist, Korea will be lost. Since Japan is essentially an industrial economy without adequate resources of its own, it must live on its manufactures and manufacturing capabilities. Unless this process continues under the auspices of the United States and the free world, it will inevitably come under Soviet communism, which desires to control Japan as a workshop for war. The Secretary suggested to President Rhee that he must recognize as a problem of ROK national security the necessity for keeping the Japanese economy viable and strong. As an example, the Secretary pointed to the manufacture of locomotives which would take a long time before the ROK could establish its own factory to make. Accordingly, it was a good idea to buy them in Japan because that would make them quickly available for the needs of Korea and also give Japan business. Otherwise, Japan might become communist, for it would starve without trade with the free world.
President Rhee urged the United States to heed his plea. He said that many Japanese were now going around in the United States asking that many Japanese were now going around in the United States asking that the $200 million fund be used in Japan. He wanted that money to be used in Korea to build up Korean industries. He then pointed to a number of examples where Japan had been used for a source of supply or services which he considered altogether unfair. He said that the military authorities had distributed boxes of Japanese dried fish in Korea when Korea itself produces its own fish, which is much more desirable and edible than the fish in those boxes. He said that he had recently had to send out some 2,000 Japanese technicians and engineers who had been brought [Page 1475] into Korea. He mentioned the case of using Japanese technicians to repair the telephone exchange in Seoul. He had asked General Van Fleet5 why Koreans had not been given a chance to do this repair job, to which General Van Fleet had answered that no Koreans were sufficiently trained for that work. President Rhee said that it was not fair to employ Japanese and at the same time not train the Koreans for the same job. He was gratified that General Van Fleet had fully understood and agreed with this. President Rhee also mentioned the case of the Japanese dredge for Kunzan Harbor, which General Coulter6 had approved when he was Deputy Commander of the Eighth Army, but which President Rhee had asked to be removed from Korean waters. Therefore, he strongly suggested that the Combined Economic Board should determine what is necessary to buy from Japan and what can be done without from Japanese sources, so that the United States dollars can be used in the proper way, from the Korean point of view.
Secretary Dulles said that he appreciated President Rhee’s point of view, since it was his responsibility to look out just for the ROK. It was natural for President Rhee to view Japan as a former enemy which had ruled Korea for some time. It was understandable that President Rhee, as a life-long patriot, fighting for the interests of Korea, should have such prejudices against Japan. On the other hand, the Secretary pointed out, the United States must take a broad view as the leader in the world struggle against communism. The Secretary explained the general strategic position in the Far East which required holding a position anchored in the north in Korea, which swung through the offshore island chain through Japan, Formosa, and the Philippines, to Indo-China at the other end. If that arc can be held and sufficient pressures developed against the communists, it might be possible eventually to overthrow communist control of the mainland. However, if any part of that strategic position is lost, the whole position will go under. Since the United States must be concerned with the whole position, it must give its attention to Japan in order for Japan to have a chance to live and not turn to the USSR. The Secretary asked President Rhee to recognize that the United States must have responsibility for spending its funds where it believes they will do the most good, including Japan. He pointed out that Japan now faced a trade deficit of many hundreds of millions of dollars which were made up only by the special procurement of the United States in [Page 1476] Japan. Thus, the United States alone was keeping Japan from real economic difficulties. The Secretary said that we would respect and promote President Rhee’s desire to spend United States funds in Korea. However, it would not be possible to spend them entirely in Korea since we must spend some in Japan to help Japan. It is necessary to hold both Korea and Japan, since it would not be possible to maintain Korea if Japan is abandoned. There must be strong, healthy economies in both countries. Furthermore, the United States has the responsibility for backing up all the friendly nations in the Far East. We are putting over a billion dollars into Indo-China, and several hundred million into Formosa and Japan and billions into Korea. The Secretary said that President Rhee must trust the United States to expend these funds in terms of the benefit to the total welfare of all these nations together.
President Rhee asked the United States to give the ROK a chance to handle its rehabilitation itself. If the Koreans can do it in Korea, they should be allowed to. If the Koreans can not do it, President Rhee said they would then turn to Japan. But he urged the United States not to build up Japanese industry alone and to spend United States funds in other countries and not in Japan
Secretary Dulles then asked President Rhee how he would propose to keep Japan from going communist, assuming for the moment he were the President of the United States and had the responsibilities which President Eisenhower has. President Rhee replied that, first, he would request the Japanese Government to outlaw the Japanese Communist Party and, second, that the United States should tell Japan it would not help Japan if it dealt with the Soviet Union or Communist China. He said that he was opposed to having the United States give so much aid to Japan because in the course of time Japan would become the controlling economic power in Asia. He wanted United States funds to be used for the buildup of the individual economies of the other countries. The Secretary said that the only sound basis for the development of Japan and all the free countries in Asia was in multilateral trade. President Rhee replied that if Japan is built up as the producer and the other countries remain as buyers the others will become “slaves to Japan”. He felt that the building up of the “Japanese empire” would give the United States a very hard time some day.
The Secretary said that President Rhee was quite wrong if he felt that the United States was aiding Japan just because it had some particular attachment for Japan. That was not the case, at all, since the United States had also fought Japan in the last war. On the contrary, the United States was helping Japan mainly to build it up as part of the whole anti-communist front.
[Page 1477]President Rhee again referred to his complaint that during the last seven years every dollar for Korea had been spent in Japan and that people are trying to have the new funds spent there also. He explained that these people were not the high authorities but “low level” persons, who can find “a hundred different ways” to buy in Japan. He again urged that we should spend the money to build up Korea.
The Secretary said that the United States could be considered as sort of a general staff for planning for the whole Asian front against communism. The Japanese people have work to do which means they must be able to manufacture and trade. He felt that President Rhee wanted to build up industry in Korea and opposed any international trade with Japan. President Rhee said that he did not disagree with all of the general considerations that the Secretary had presented. He was just emphasizing the need to use funds for the construction of industry in Korea instead of using these funds forever to buy materials in Japan, and thus build up Japanese industry. Admiral Sohn then described in some detail the kind of industries that were needed in Korea for its livelihood and defense.
The Secretary concluded the discussion by saying that he understood President Rhee’s point of view and he felt the latter understood his. President Rhee agreed.
- Paik Tu Chin.↩
- Admiral Sohn had received this appointment on June 30.↩
- Robert T. Stevens, Secretary of the Army.↩
- Ellis O. Briggs, Ambassador to Korea.↩
- Lt. Gen. James A. Van Fleet, Commanding General of the Eighth Army in Korea from April 1951–February 1953.↩
- Lt. Gen. John B. Coulter, ret., Director of the U.N. Korean Reconstruction Agency.↩