Foreign Relations of the United States, 1952–1954, Korea, Volume XV, Part 1

S/S–NSC files, lot 63 D 351, NSC 118 Series

Memorandum by the Secretary of the Treasury (Humphrey) to the Administrative Assistant to the President for National Security Matters (Cutler)¹

confidential

[Washington,] March 10, 1953.

The following is a very brief report on the activities of the Committee to which I was appointed Chairman to arrange for the settlement by the Army for wons in Korea.²

Immediately after my appointment to the Committee the following representatives met.

Secretary Stevens—Army

General Collins—Army

Harold Stassen—MSA

Joseph Dodge—Budget

Robert Macy—Budget

Wilford J. McNeil—Defense

John M. Allison—State

Secretary Humphrey—Treasury

The result of that meeting is set forth in the attached memorandum, copy of which was sent to each member. Settlement was made by the Army as authorized except that it was all for cash, nothing in kind and the money has been paid.

There was some confusion about the appointment of an economic adviser. Some delay ensued, but Mr. Tasca has now been appointed for the job and will report to General Clark. It is suggested that we be very sure that Mr. Tasca’s position and authority be very fully understood by every one concerned so that he will have the best opportunity to do a good job without confusion. This should also be cleared with Mr. P.H. Shinicky, Chairman, National Assembly Republic of Korea, in accordance with letter to the President dated January 30, 1953, copy sent to me with copy of memorandum to the Secretary of State on March 2, 1953.³ Ambassador Lodge feels that there is some doubt as to just what Tasca’s position with U.N. can be, but will advise further in that connection later.

G. M. Humphrey

[Attachment]

Memorandum for the Members of the Interagency Committee for the Settlement of Republic of Korea Currency Advances to United States Forces

confidential

[Washington,] February 16, 1953.

It is my understanding that it was the consensus of opinion at the meeting this morning that General Clark’s request should be granted, that he be permitted to effect the present settlement for $87,000,000 because he has gone so far with it that his situation might be seriously prejudiced by further delay and the imposition of new negotiations under new auspices. The settlement, however, was to be made upon the following conditions:

1. That henceforth the exchange rate would be 18,000 won to the dollar.

2. That this rate would be reviewed and revised on a suitable basis each thirty, sixty or ninety days, never longer than quarterly—preferably on a thirty-day basis.

3. That as much of the settlement as possible, subject to negotiations by General Clark, would be paid in kind of a kind most helpful to Korean economy.

4. That henceforth, and as soon as possible, economic affairs in Korea would be put in the hands of a new appointee who would be subordinate to and report to General Clark, and superior to everyone else in the economic field. He would be a representative of the President and given as much power as possible from each of the following: State, Defense, MSA, Treasury, and Budget, and would have full authority over such funds as might be designated by them respectively. He would be an officer of UN, with such authority as might be obtained over UNKRA funds.

5. Mr. Stassen will alert Mr. Tasca for the job, if he is agreeable to General Clark, with request that he go to Korea as soon as possible and report on the authority and program in detail that he would prefer. We will undertake to obtain all necessary authority as early as possible in accordance with his wishes.

Secretary Stevens and General Collins will communicate with General Clark and advise the Committee at the earliest possible time.

We will each investigate the formalities required to accomplish our respective undertakings.

1. This memorandum was transmitted to the NSC for its information under a separate covering memorandum by Lay, Mar. 10, 1953.
2. For the authorization to settle the problem of ROK currency advances to U.S. forces, see memorandum of discussion at the NSC meeting of Feb. 11, item 5 on p. 771.
3. Neither printed.