Foreign Relations of the United States, 1951, Korea and China, Volume VII, Part 1

895B.13/6–951: Telegram

The Secretary of State to the Embassy in Korea

secret

Washington, July 3, 1951—4 p. m.

4. This is Joint State–ECA Msg. Reurtel 1033¹ efforts being made reach agreement re partial settlement won advances to UN forces by payment to Korea of dols recd from UN personnel exchange for won.

Interested agencies believe application ECA counterpart fund balance on Govt overdraft undesirable now. With inflationary pressures active in Kor economy see neither necessity nor advantage in releasing CP fund balance to cancel part of overdraft. If such cancellation permitted further expansion overdraft may result. We fear making CP balances avail Kor Govt may slow down present commendable endeavor maximize current Govt revenues.

Ur success in raising CP rate appreciated.

Acheson

1. Dated June 9, p. 527.