895.20/12–1649: Telegram
The Ambassador in Korea (Muccio) to the Secretary of State
1514. Deptel 1036, December 9.1 For information Department and other concerned agencies, following is our estimate of use by Korean [Page 1109] security forces of ECA common use items for fiscal year 1950, base on use to date this year (read in three columns: item, quantity, estimated value for fiscal year 1950):
Gasoline, 3,276 drums per month, $263,000; lubricants, blank, $26,000; special fuel, 200,000 gallons per month, $216,000; Diesel oil, 300 drums, $45,000; cotton, 20,400 pounds per month, $73,440; hides and skins, 200 tons per year, $138,000; cement, 200 tons per month, $38,400; lumber, 200,000 board feet per month, $156,000; rubber, 400 tons per year, $142,000; paint, 65 tons per year, $58,500; gas for 10 AT–6 planes, 60,000 gallons per year, $10,000; total $1,166,340.
Foregoing estimate does not, of course, include diversions which may have been made by security forces from Korean economy, figures on which are naturally not favorable.
Re questions posed in reftel, our answers as follows:
It difficult determine relative importance common use items versus strictly military items. Both are equally essential elements in effectiveness ROK military establishment. It will be appreciated, for example, no modern army, including ROK Army, could stay in field without POL. Apart from POL, Embassy of view strictly military items transcend in importance common use items set forth reftel.
It is impossible to estimate specifically what diversion ROK might make from civilian economy if common use items not financed by ECA or MDAP. However, based on recent experience and observations, it our view ROK would make any diversions it felt necessary and practicable in order maintain public security. In event major crisis such as major attack from north or greatly stepped-up guerrilla operations, we could expect diversions which would seriously impair ECA recovery program. Serious deterioration of Korean economy resulting from stepped-up military requirements could bring about severe economic crisis, which would in long run jeopardize efficiency of ROK military establishment.
If items other than POL and lumber were financed by ECA, situation set forth above would be little changed in view of minor outlays involved. In this general connection we should like to point out that virtually all items except POL used by ROK Security Forces enter into Korean economy in some way prior to reaching security forces.
It is desired to point out ECA supplies and equipment for third quarter and part of fourth quarter FY 1950 already under procurement. It appears therefore, as regards FY 1950 ECA is assuming no [Page 1110] substantial additional burden in financing common use items for security forces.
It is also desired to point out value of common use items for use ROK Security Forces as estimated above, is minor compared with total requirements of Korean economy. Re POL, which is major common use element, in FY 1951 ECA mission here contemplates financing no POL or at best only special fuel and diesel oil since Jacona and Electra being operated as special projects. By second quarter 1951 Korean foreign exchange financed gasoline and lubricants should be arriving Korea. Problem of diversion which most serious in case gasoline will then be one for ROK to handle.
In considering common use financing problem, Department and other interested agencies attention is invited following considerations (1) MDAP program for Korea, as presently constituted, is wholly inadequate and allows ROK Security Forces barest minimum of ammunition, some ordnance spares, small quantity signal equipment, etc. It allows virtually no replacements and fails to take care of pressing air force and coast guard requirements. (2) Security force replenishment and replacement need here are relatively greater than in virtually any other MDAP area because of conditions existing here: armed forces facing each other along entire stretch of thirty-eighth parallel with sporadic clashes and daily battles with guerrillas in hinterland. (3) ECA must appreciate its program here dependent on maintenance peace and order. The more ECA can help in provision of common use items, the more MDAP funds can be utilized for urgently needed military items and consequently progress of ECA program better insured. In view foregoing considerations I reiterate recommendations made in Embtel 1447 December 1 that common use items continue to be financed by ECA through FY 1950.
- Not printed. In this telegram the Department requested information on the relative importance of POL, cotton, hides and skins, cement, lumber, and rubber for use by the Korean military establishment compared with strictly military items which would otherwise be included in the $10 million fiscal year 1950 Korean Mutual Defense Assistance Program. The Department wished to know what diversion the Republic of Korea would make from the civilian economy if these items were not financed by ECA or MDAP funds. It also wished to know whether such diversions would seriously affect Korean economic recovery progress and the efficiency of the Korean military establishment. In addition, the Department requested information on the above queries based on the assumption that all the above items except for POL and lumber would be financed by ECA in fiscal year 1950. (840.20/12–949)↩