Foreign Relations of the United States, 1961–1963, Volume XXII, Northeast Asia

298. Memorandum From Michael V. Forrestal of the National Security Council Staff to President Kennedy⁰

Washington, March 28, 1963.

KOREA

Governor Harriman and Mr. Yager (Director of East Asian Affairs in State), Mr. Sloan (deputy to Paul Nitze in Defense) and Admiral Heinz will report to you on the current situation in Korea.¹ The purpose of this meeting is to bring you up-to-date on developments in Korea in the past few weeks.

As you will recall, the military junta, headed by Chairman Park, came into power in Korea in May 1961. At the outset our attitude toward the Government was equivocal; but Ambassador Berger, after several months at his post, came to the conclusion that the military junta might provide Korea with a stable, reasonably clean government and one that we could work with.

The junta functioned well for the first year; but beginning in early 1962 a series of difficulties began to arise. In April of that year the junta adopted a political Purification Law, which in effect banned political activity by the opposition for a period of 6 years. In June of 1962 the junta adopted a currency conversion program and froze private bank accounts. The effect on the economy was depressing and confidence was badly shaken. Shortly after this action, it became known that Kim Chong-pil, head of the Korean CIA and Chairman Park’s son-in-law, had made the greatest financial coup in Korean history by manipulating the stock market for a profit of approximately $20 to $30 million. There are suspicions of other financial manipulations by the CIA.

The junta had announced at the beginning of its regime that it would transfer power to a popularly elected civilian government in the summer of 1963. It repeated this promise from time to time and secured the adoption of a new constitution by referendum. Last January a pro-junta political party was formed, headed by Kim Chong-pil with the purpose of securing the election of Chairman Park as President and, it later turned out, the maintenance of Kim Chong-pil in power. At this point the junta began coming to pieces because of the conflict between Kim and other factions of the military junta. On February 18th Chairman Park, having become disillusioned with the military administration, announced that he would withdraw from the presidential race provided the civilian political leaders would agree upon a 9-point program featuring political harmony and the continuation of certain basic political objectives, including the normalization of relations with Japan. The political leaders accepted and Kim Chong-pil left the country as a roving ambassador.

At the beginning of this month a series of coup plots and counter plots preceded an announcement by Chairman Park on March 16th that he considered it necessary for the military rule to be extended for four more years, and that a national referendum would be held on this subject in April. There is some evidence that some, if not all, of the coup plots were engineered to support Park’s announcement.

At the moment the situation is still unclear. The Korean military leaders have apparently sided with Chairman Park, and the civilian politicians remain adamant in their refusal to accept what appears to them to be an indefinite extension of the military government. We have been pressing for a “pan-national” solution in which the civilians and the military would get together to agree on a compromise government which would represent a broader range of Korean political life. There has been some evidence that Chairman Park may be reconsidering his insistence on prolongation of military rule. In the meantime he has sent you a personal letter, which is reported in the attached cable.²

0. Source: Kennedy Library, National Security Files, Countries Series, Korea, General, 8/62-3/63. Secret.
1. See footnote 5, Document 295.
2. In a March 19 letter to President Kennedy, Pak detailed his reasons for not transferring the government to “ever corrupt politicians.” Pak cited the recent political situation, “the dishonorable feud among politicians,” and “anti-state plots masterminded by certain radical elements as justifications for his decision. (Telegram 713 from Seoul, March 25; Department of State, Central Files, POL 15 S KOR) In telegram 712 from Seoul, March 25, Berger reported that the Acting Foreign Minister had informed the Embassy that a new transitional military government under Pak would consist of 50 persons, two-thirds of them civilians. Pak would also have an advisory board of 30 elder statesmen. (Ibid.)