Text
.,
Seoul, Korea
April 4, 1967
Dear Homer:
"Kor ea, that is, South Korea, the Republic of Korea, has
very little.
11
It has no forests -- the Japanese destroyed them.
11
lt has no hydroelectric power -- that's in the north.
''It does not produce enough food to feed its peopl e.
lt has almost no factories,
11
11
Ambassador Winthrop Brown
It has no oil.
11
continued.
11
It has no gas.
1
'lt has only one ass et - - and that is its people.
11
The Korean people have a great capacity to learn, both the
rural farms and the city people.
11
They are able to laugh at themselves -- and the Koreans
are not afraid to say ' thank you.
1 11
They have said "thank you,
11
and said it very well .
The dis-
tinguished business leaders who met Dick Thomas, Olof Lindstedt,
Mrs. Freeman and me at the plane expressed it in the patois picked up
from our service men :
11
Stateside send son when we have war.
State side have war and we send son.
11
Now
-2-
And they said it without
11
ifs 11 or "buts.
11
Our Ambassador
recalled his visit to President Chung Hee Park to ask for a division of their
troops to go to South Vietnam.
Park 1 s reply was simple:
11
Certainly, see
my Chief of Staff and tell him when and where you need them,
11
Last year
when we asked for a second division, it, too, was provided -- for a total
of 45,000 Korean troops now in Vietnam.
Of course, the Koreans were heavily indebted to us.
But so
are many other countries which have not sent so much as a squad to Vietnam.
We have supplied most of the military equipment, not only for the two divisions in Vietnam, but also for their very large army at home ,
Nevertheless,
this small country (approximately thirty million people in a land the size of
}~
Minnesota) spends 80 to 85 per cent of its national budget
to maintain its
military force, the fourth largest in the world, whereas so much of the world
avoids such expense, preferring to rely on the United States.
Yes, the Koreans are not afraid to say "thank you.
11
Although it
took only a few words for President Park to agree to send us his troops, it
,:,
Its total budget is up from less than thirty billion won in 19 64 to over
seventy billion in 1966, Half of this is raised in direct and half in indirect
taxes, Personal income taxes account for about 50 per cent more than
corporate income taxes . Much income still escapes taxation and it may
be that some corporations and individuals keep several separate earnings
statements. (At present no American accounting firm has a branch in
Korea,) Despite this problem, the government is rapidly increasing
tax collections -- this year to one hundred billion won.
-3-
took great political courage, for his country is poor and, through 1964,
with rampant inflation raising prices as much as 20 or 30 per cent a year,
the average man 1 s purchasing power was not rising but, in fact, declining
a little each year .
Why should he help the rich United States with its war?
As President Park anticipated, the opposition party made great capital of
this and condemned Park for his subservience to the United States.
As eve n
President Park could not have anticipated, but as the missionaries and the
local village officials soon began to report, the people in the remote villages
tending their tiny tea paddies, when they h eard the news, were not in fact
resentful -- they were proud.
Their country was so st rong that the United
States needed their help and they were paying back their debt.
Once again the soldier turned politician, President Park, had
outwitted the opposition and done so with what would have seemed an unpopular
act.
The opposition had to back down and now merely grouses that certainly
the country shouldn't send any more troops.
The presidential election coming up on May 3 will offer the
people the choice of Park or 71-year old former President Po-Sun Yun who,
campaigning on Saturday, called for ''an end to the present government's
,,,
,,,
autocratic rule, corruption and subjugation of the nation to foreign hands.
11
Although it is arrogant to express any opinions about so comp lex
a society after a visit of only two days, it seems to me that in a sense the
oppos ition's points are valid.
,:,
As reported in the KOREA HERALD for Sunday, April 2, 1967.
-4-
1.
The present government is autocratic.
2.
There is widespread corruption.
3.
The nation is dependent on foreign influence.
But unless I have completely misread the people I s attitude,
President Park has little to fear -- in 1967.
His real test may come four
years from now in the spring of 1971.
The government is autocratic in the sense that it is run by an
extraordinarily courageous, forceful, indefatigable, determined revolutionary
army officer who seized power by a coup d'etat on May 16, 1961, and has
since run the country on the bas is of what is good for it in the long run,
whether it is popular or not.
Thus, to reduce crime and a possibility of
insurrection, the country is subjected to an absolute curfew from midnight
to 4:00 a. m., and, though we are driven in a car with a CIA sticker that
allows us to go through any roadblock and avoid any detention, if we were
to be out fifteen minutes past twelve o'clock, we would be locked up.
His determined autocracy takes many other forms.
Earlier a
novice in this field, he has learned a great deal about economics and is
determined to pr event inflation and to encourage i nvestment in capital as sets
in a country heretofore almost devoid of productive machinery.
To do this
he has held wages at a low level, offered relatively little in the way of
consumer goods and has directed production toward investment (primarily
investment in the production of goods for export), thus providing both jobs
and foreign exchange,
-5-
Park I s government has accomplished near miracles.
which were 120 million in 1964 will exceed 350 million this year.
e xpectancy has doubled in the last thirteen years.
in an over-populated country) is down.
Exports
Life
The birth rate (so important
In the past two years gross national
product has risen 12 per cent each year in real terms and, though by our
standards inflation is rampant, the consumer price rise last year was limited
to 14 per cent.
Wages have risen more rapidly so that for the past two years
the ordinary man has improved his purchasing powe r .
People are dressing
better, going to the movies more (some 170 million paid admissions last year).
There are 150 thousand television sets as against none five years ago.
Pilferage
from U. S. supplies is down by one-half and, as we hear almost every place else
in the world,
11
You just can 1t find a maid her e.
11
This is not to say that Korea is a land of milk and honey.
It cannot
be compared to Japan even fifty years ago, but it stands today about where
Ta iwan was seven years ago.
These are great accomplishments, but until 1965 they were at
the temporary expense of the average man.
I can't imagine a political leader
in any other free democratic country having the courage to adopt the stern
measures which Park has enforced and I am overwhelmed both by the people 1 s
approval of his severe disciplines; at the sa~ t ime one would have to acknowledge that Korea is not quite as free as we might expect.
But the next five-
year plan calls for a 31 per cent increase in per capita income and, though
the people don 1t love tough General Park, they believe he will achieve this
and they are not sure anyone e ls e could.
-6-
The government is also corrupt, as the opposition complains.
Businessmen report that in dealing with the government at lower levels
(and the government is all-pervasive -- just to walk out of the Seoul Airport
requires inspection and stamps by five separate officials), it is necessary
in every .i nstance to bribe petty officials or at l east to pay them something
(
11
bribe" seemed too harsh a word to the Koreans, who look on this as a
normal form of compensating the government bureaucrats who are woefully
uncle rpaid).
In our limited stay we had no direct contact with corruption.
On the other hand, we did see a great many of the higher officials from the
Deputy Prime Minister,:, on down and, though it is possible they may have
risen through the lower ranks of corruption, these senior men were as
bright, knowledgeable, aggressive and confident as any government officials
I have ever had the pleasure of meeting.
It may be that we were directed
primarily to those who speak English, but we saw the head of the Economic
P l anning Board and his assistant, the Minister of Finance and his assistant,
and the heads of the two largest commercial banks.
Each of these men spoke
English fluently and most of the government officials to whom we talked had
been educated in the United States.
,:,
They were knowledgeable, incisive, and
Chang Key-Young, 51 years old, ex-banker and newspaper publisher,
is referred to with awe as "the big bulldozer, 11 an apt description
of his overwhelming drive and aggressiveness. Dick, Olof and I met
with him twice and were worn out after ten minutes of his "Will you
help us? Thirty million for fifteen years? Ten? Ten million for three
to five years? We will help you -- what will you do? 11
-7-
hard working.
One assistant told us that he had had no Saturdays and only
one Sunday off i n the last six months .
I accept the fact that there is corruption, but I am impressed
with the fact that the governmental leaders are extraordinarily able and
overwhelmingly confident of the future of their country.
The opposition is right in its contention that the government is
subject to great foreign influence.
obvious,
It is, indeed .
Our presence is most
Of the two newest office buildings -- of equal size and side by side
one houses the Korean Government financial offices (the Economic Planning
Board and the Ministry of Finance) .
The other is occupied by the U, S. 0. M.,
our Economic Aid Mission,
Many store fronts and advertisements are in
English as well as Korean .
The streets are full of jeeps, both n ew military
models and older ' 'surplu s" models now painted black and used as everything
from taxis to "limousines" (but never as trucks - - they are much too fine
for that!).
The R . 0. K. soldiers wear U. S. Army uniforms and our military
installations and U.S. 0, M, compound with its golf course are prominent .
Many American firms are moving in and the Korean businessman speaks
frequently about his "golfa game . "
In addition to our economic and military
aid we are buying about ten or twe lve million dollars of goods each year for
Vietnam and R. 0. K. soldiers and workers tre re are remitting another fifty
million dollars.
-8-
Our presence is obvious.
Our aid and military influence may
decline in the days ahead; our business influence is almost certain to
increase,
President Park,in his determination to advance the economy, has
caused the legislature to adopt the Foreign Capital Introduction Law to lure
capital into Korea, in part by offering the inducement of a five-year tax holiday
to any company that has at least 25 per cent of its equity invested by foreigners.
At a time when most other economies (notably the Japanese) seek to discourage foreign investment, Korea is extraordinary a.nd, though it offers
a limited domestic market, it provides cheap, high-quality labor that should
be extremely attractive to many of our manufacturers.
The Japanese are making strenuous efforts to take advantage of
Korea I s cheap labor, but the Koreans still harbor intense resentment against
the Japanese.
One large employer told me that he had recently employed a
very able young man who, after six months, resigned because there was so
much Korean exchange of business with Japanese firms.
Syngman Rhee,
who was deposed by Park's coup in 1961 (and has since died), is earning
renewed admiration for his having had the strength to accept a slower rate
of economic growth as a price for excluding the Japanese during his regime .
,,,
......
But the Japanese are out to overcome this if possible.
,:,
Today, even the
The "normalization agreement " (re-establishing diplomatic relations)
signed in 1965 re-established relations between the two countries -- an
act of grave political significance to both governments - - theretofore
quite hostile. It also provided something less than a billion dollars
($800 million), some in gifts, some in loans.
-9French are coming in and are about to begin local assembly of the Renault
for sale throughout Asia.
Thus, the opposition is right in pointing to the fact that the
present government is autocratic, there is widespread corruption and the
nation is subject to foreign influence, but (on the bas is of my very superficial
know ledge) I would guess that on May 3 President Park will do very well.
What kind of people are these that willingly accept these burdens?
In the first place, they are of Tungusic and Mongolian origin (as
a result of invasions beginning in the third millennium B. C.) and this is reflected
in their appearance,
Dede asked some of our Korean friends to describe what
they felt were the physical differences between themselves and other Asiatics .
They felt that they are a bit taller than the Japanese and have rounder and
flatt er faces.
Their eyes are less slanted than the Chinese and their color
somewhat lighter,
In the second place, they are much more cheerful, from the
dancer in the kieseng house to the workers in the city and the villagers on
their tiny farms, they are smiling.
Even when our driver speeds into a crowded
street with his rude horn honking, the people scamper out of the way without
a gesture or a curse, very nimble but unperturbed .
In the third place, they are hard workers.
Driving through the
countryside on Sunday, we were quite impressed with the industry; girls
sitting by the side of the road breaking rocks into gravel with hammers,
-10-
farmers working on their mud dikes which hold the precious water to
irrigate their room-size paddies, the constant stream of bicycles carrying
everything from a supply of tinware utensils to twenty-foot trees (the
Koreans are replanting every place), the bullock carts loaded with black
cylinders of coal dust and clay which virtually every home burns in its
stove.
They work all of the time and they work very effectively.
Joel
Bernstein (a graduate of the University of Chicago), the head of our Aid
Mission here, reports that the Fairchild Company has found the Korean women
not only as adept as their American counterparts in assembling semiconductors, but able to keep up a rapid work rate for longer hours.
This is
at wage rates less than half of that in Japan, and much less than one-tenth
:{::
of ours -- about 501 a day.
Lastly , they are enthusiastically optimistic.
I can only under -
stand this confidence in the face of the extraordinarily low living standards
that they have suffered in the past.
Today, with an average annual income
of about $105, they are still very poor, but compared to what they were ten
or twenty years ago, they are better off and, though their real purchasing
power declined from 1960 through 1964, there has been an increase in the last
two years. They are confident it will increase rapidly in the future.
,:,
Of course in time these wage rates will increase. There are labor
unions, but with unemployment still at 7 or 8 per cent there is no
great upward push .
-11-
Long the thin slice of ham between the thick slices of bread -China 120 miles (across the Yellow Sea) to the west and Japan 120 miles
(across the Korean and Tsushima Straits) to the east, arrl with the U.S. S . R .
just north of them across the Yalu and the Tumen Rivers -- Korea has been
repeatedly invaded from all three directions.
There are few Koreans now alive who had any mature experience
before the Japanese invaded their country in 1910 and began a harsh domination (as contrasted with quite a sensitive rule in Taiwan),
The Japanese
set out to destroy Korean institutions and names (they even changed the name
of the country to
11
Chosen").
They humbled the people (who feel that, culture
having come to Japan from China via Korea, they, the Koreans, are superior
to the Japanese).
This domination continued until the end of World War II.
At that time, President Roosevelt with a generous gesture gave
the north half of the country - - all of that lying above the Thirty-eighth
Parallel of Latitude (about the latitude of San Francisco) - - to the Russians
as a reward for their belated and modest help against Japan, and under the
supervision of the United Nations an election in the south half was held on
May 10, 1948, and the Republic of Korea was created.
This division was
a bum bargain for the free world, as the Japanese had built all of their
heavy industry and 85 per cent of their hydroelectric plants in the north.
The south, cut off from its electrical energy and raw materials,
was industrially weak with virtually no minerals or natural resources .
A
mountainous, undeveloped, overpopulated, agrarian country whose only raw
mate r ial, its forests, had been decimated by the Japanese, unable even to
-12-
feed its elf, South Korea was obviously weak.
This naturally suggested
to the rulers of the richer, more industrially developed north that, if they
were to move down and take over the southern half, no one would seriously
resist.
The South Korean Government was obviously too weak and there had
been some statement from the United States that was interpreted to indicate
that it would not interfere.
But when the Communists did invade in 1950, the southerners
fought furiously and a decisive President Truman induced the United Nations
to come in (with the United States bearing most of the burden} and to engage in
a long, hard war .
We paid a high price.
suffered 158, 000 casualties.
We may recall that U.S. troops
We are more likely to have forgotten that the
South Koreans suffered 1,313,000, including women and children.
Our government must have been sorely tempted to allow MacArthur
to pursue the invaders above the Thirty-eighth Parallel and to take over the
more productive northe rn half of the country.
Perhaps if we and the ROK had
been acting alone we could have done so, but for the United Nations defense
was one thing, invasion quite another.
Thus, in July of 195 3, an armistice was achieved at the Thirtyeighth Parallel, which remains probably the most festering border between the
Communists and the free world today .
As was stated in the SATURDAY
REVIEW (October 8, 1966) ;
Nowhere else in the world where people of different
ideologies meet is there the same open contempt.
Nowher e else does the boiling point appear to simmer
so constantly and ominously. 11
11
Officially the two halves are still at war.
A cease fire was
negotiated fourteen years ago, but still no peace treaty has been signed.
-13-
Just last week, in advance of a scheduled meeting between the north
and south at the border, word was received that the head newsman cover ing the meeting for the north (their top newsman with rank equal to a
deputy minister) would like to defect .
At the end of the meeting, as the
North Koreans entered the ir cars, the newsman ra,n for one of ours.
Just
as two North Korean armed guards reached him, a Captain Bair ~ho had
once played with the Chicago Bears) dove i nto them.
The newsman reached
our car and escaped to freedom.
As the border is only about forty miles north of Seoul, we had
planned to drive up there early this morning (25, 000 people visited our side
last year) but a change in our appointments made that impossible.
*
Thus, at the war's end in 1953, South Korea was destitute and
our government, having helped to achieve its freedom, stepped in to aid
its economy.
In the intervening years we have given over six billion dollars
in economic and military aid which has enabled them to remain independent
(but at a far lower cost than we would have incurred had we used our own
more expensive soldiers) .
The economic (as distinguished from military) aid,which at one
time was as high as $230 million per year, is now down to an annual rate
of $45 million dollars and is decreasing at the rate of about ten million
dollars per year.
:::,
Thus, it is anticipated that it will phase out entirely in
This may have been fortunate, as the following day "one of the most
serious gun fights since the armistice 11 was fought in the truce zone
with four North Koreans shot to death and two wounded. See the
JAPAN TIMES, Friday, April 7.
-14-
four or five years (as it did a few years ago in Taiwan).
Although my observations were very brief, it seemed to
me that the Korean village is very poor .
was two or three years ago, but poor,
Perhaps not as poor as it
The houses are made of mud bricks
(about the same as the adobe bricks used in our Southwest) with rice straw
roofs.
There are no houses on the farms; they are crowded close together
in the small villages, each surrounding a small mound or open field.
houses have one or two rooms, with windows of paper.
Most
The more affluent
villagers (and many city families) have cement tile roofs with three or
four rooms, generally in an
11
L
11
shape with a wall around the other two
sides to enclose a yard or garden .
Through the kindness of International Minerals and Chemicals,
we met a Mr. K. K. Kim.
A wealthy, cultured gentleman who was reared
in North Korea (as were a great many of the business and government
leaders and some ten million refugees who have stolen south since the end
of the war), one of the country's leading poets, who led the way from the
traditional stylized three or four line poem to freer verse, Mr. Kim came
south for freedom and has achieved both business and cultural importance.
The leading manufacturer of grass cloth, a movie producer, trader, and in
,:,
Almost half of the population are named Kim, Pak (which we generally
pronounce Park), and Yi (which we generally pronounce Lee) , Other
very common surnames a re Cho i, Cho, Chung, Han, Kang and Yoon.
A person generally has three names and the surname may either be used
as the first, middle or last name, but since there are so few family
name s, the Korean knows immediately which of the several names is
the f am il y name.
-15-
shipping, an excellent dancer, he has collected pottery (one bowl is
valued at more than $30,000) and art to the point where, when Mrs. Freeman
was disappointed that she could not visit the National Museum (because the
wife of the Prime Minister of Thailand was there), Mr. Kim's daughter
said,
11
Never mind, we 111 go to Father 1 s house; he has a better collection.
It was a lovely house,
11
Mrs. Freeman reports that it was sur-
rounded by high-rise apartments and office buildings, protected by a high
wall with barbed wire on top, and was one of the few lovely old homes in the
city.
With the typical dull gray tile roof, the exterior was partly plastered
and partly highly polished wood,
Some of the windows were of paper, some
of glass with etched flower designs in the center.
The homes were heated
in the traditional Korean manner with an ondol floor .
The round cylinders of
coal dust and clay are burned in small ovens and the smoke and heat are
carried from these through ducts in the clay or cement floor .
(Thus, in the
typical house the oven serves the dual purpose of cooking and heating.)
The
rooms are separated by walls or shoji screens and the house surrounded by a
narrow, wooden balcony which is the principal means of getting from one room
to another.
The Kims 1 home had a modern bath with running cold water and, to
Mrs . Freeman's delight, a crocheted toilet seat cover,
The furniture was
upholstered and covered in heavy linen slip covers of the kind that were more
common in our nicer homes years ago and which remain a fixture in the
Japanese offices today.
There were lovely fresh spring flowers casually
placed in bowls (the Koreans think the Japanese flower arrangements far too
-16formal and stylized).
Mrs. Freeman and the family sat on colorful silken
pillows on the floor around a black lacquered dining table inlaid with mother
,I,
of pearl and ate with silver chopsticks ..,,
Mrs. Freeman reports that their luncheon was of a clear soup
followed by a dish of boiled fish and beef put together so closely that it
looked like a striped whole.
This was followed with pressed egg yolks and
vegetables, tiny stuffed green peppers and a bowl of rice.
It was ended
with a glass of tepid rice water (the water that the rice had been cooked in),
followed by citron tea -- which is made without tea by pouring boiling water
over very thinly sliced lemon, previously heavily sugared and stored underground for a year before serving - - with little pine nuts floating on top.
Although Mrs. Kim does not speak English, her three daughters
all speak fluently.
The one with whom we had become best acquainted,
Mrs. Huh, graduated from the University of Seoul with a major in English
literature and then went to Northwestern University and obtained her graduate
degree in speech.
The girls were much more outgoing than Japanese women,
The ladies talked about clothes.
Historically, the Koreans wore
mostly white, and were known as the "white-clad race" in distinction from the
Chinese and Japanese who wore much more color to reduce the necessity
for cleaning.
Even today in the villages you see many men and women dressed
in white -- apparently clean even though the wearer may be repairing mud
~:~
These are heavier but much thinner than the bamboo chopsticks used
more generally in Japan and, in fact, are much more difficult for us .
- 17-
dikes around his paddy.
The woman's han-po (1'kimono" is a hated Japanese
word) is an ankle -length fully gathered skirt with an overblouse (chogori)
tied in a bow in front with ribbons.
Although many of the younger women
now wear western clothes in the summer, the traditional costume, now made
in beautiful silks and brocaded satins, is very popular in the winter, "for we
can wear much more underwear underneath without its showing.
11
The ladies also talked about religion and, though we had seen a
number of churches, this is apparently due more to diversity than intensity
of religion.
Shamanism, an animistic nature worship, was the original
religion and remains important in the rural areas .
Buddhism reached its
peak in the eleventh century and has d eclined steadily, though there has been
some revival of interest in the last few years ,
Confucianism, really more a
code of ethics than a religion , is the strongest influence,
of the people are Christians ,
About 8 per cent
In the Kim family, Mr, Kim and Mr, Huh have
no religion, but accept the precepts of Confucianism.
Mrs. Kim is a Buddhist
and Mrs. Huh is a Methodist .
They also spoke of marriage.
In older days all marriages were
arranged and this remains the practic e in some of the rural areas.
Among
the more e ducated city families the decision is apparently about fifty-fifty.
For instance, when Miss Kim returned to Seoul from Northwestern, her
parents discussed with her the kind of a man she might like to marry.
Clearly
he should be educated and have some foreign experience in order that they
would have this common ground ,
The father urged that she pick a professor,
-18 -
as she herself teaches, and because professors have much more time to
be with their families than do businessmen.
He said,
11
If you marry a
businessman, you can only expect him home one day a week, on Sunday.
11
After considerable discussion, she voted for a businessman and her father
set out to find those he felt were the most eligible.
She picked Mr. Huh,
who himself had graduated from the University of North Carolina
family are people of considerable importance in Seoul.
and whose
It appears to have
been an excellent match for both except that (as a seven handicap player)
Mr . Huh spends Sunday on the golf course.
The Kims are grateful for their girls but put more emphasis on
their eldest son (who is traditionally accorded considerable respect even in
his youth) and they sincerely hope that their daughters I marriages will result
in numerous grandsons.
For a poor country it is surprising the emphasis that has been
placed on education.
Virtually every village, no matter how small, has one
building w h ich,by its size and the orderliness of its yard, indicates that it is
a school.
Lit eracy is something over 85 per cent , there is great emphasis
on vocational training, and many go on to higher education .
There are several
universities in Seoul with an enrollment in excess of 30,000 students .
If I have been impressed with any one thing on our trip so far,
it is that it is of the greatest import ance tha t we in the United States take
advantage of these low-cost labor pools and do not abandon them exclusivel y
to the Japanese .
There is no large domestic market in Korea.
It is not a
-19-
place for us to produce radios or televisions for local sale, but it is
certainly a place to produce goods for sale throughout Asia and for return
to the United States.
The Koreans produce magnificent textiles, their silks
are beautiful (it's either the woof or the warp of all Thai silk that comes
from Korea),
Korean-made shirts sell at $1. 40 in Tokyo in competition with
Japanese - made shirts selling for $4. 00 and up .
Though they import their
wool from Australia, they are now making first-rate woolen cloth and, with
patterns and styles from our country, I would think Korea would be an
excellent source of manufacture of men's suits and coats.
For some products, such as automobiles, which require a very
large local market in order to achieve the mass production necessary to
become competitive, Korea, despite its far lower labor costs, may not offer
as gr eat an inducement as Japan, for Japan has the large tariff-protected
market ,
But for the one thousand and one products that can be distributed
throughout the world, Korea, Taiwan and Thailand all offer the tremendous
advantage of low labor costs and, of these three, Korea probably offers the
best, most willing and deft workman . .
This labor market, combined with the government's enthusiastic
welcome of foreign capital (other than Japanese) and especially American
investment , is most attractive.
market knowledge.
The Kbreans need capital, technology and
They prefer to get it from the United States, for they
have gotten to know us as comrades in arms, they know we have no colonial
ambitions, and they feel that we are aggressive enough to counterbalance
the Japanese.
-20-
Thus, this welcome, plus low-cost labor and the tax inducements, offers a combination of advantages which many of our companies
should seriously explore.
To date we have not done so to the extent that
we should, and the passage of time will make it more difficult to do so.
For instance, we were told that within four years all central telephone
equipment will be German (Siemens); no U. S . company competed for
the business.
In making a substantial capital investment in any foreign
country one is naturally concerned about the continuation of those qualities
which make it initially attractive.
An invasion from the north would com-
pletely change all present conditions, but our Ambassador and the Korean
business people think this risk is negligible .
A very severe drought
for
a year or two might bring about a change in government, as might extremely
severe reverses in Vietnam.
Inexperienced in democracy, Korea has no
record of political stability.
Our Ambassador says that on his arrival the
l argest group of men he met were ex-ministers, but a change in government
would probably not mean a change in underlying philosophy .
With almost
every South Korean family having relatives in the north, their preference for
democracy is so strong that it is certainly unlikely that they would in any
::=:t
event become socialistic or communistic .
,:c
There are lesser risks, a change
There are some Communist influences . A year or tv.o ago there were
seve ral disruptive student protests, which in the past hav e been of major
political influence. President Park, believing that the students w e re being
led by a few Communist professors, closed every university and declared
they would stay closed until the named professors were dropped from the
faculties . This "interference with academic freedom'' gave our government
representatives a cold chill -- but it worked and "the myth of student
invincibility was destroyed. 11
-21-
in the tax laws (which are extremely intricate), a devaluation of the
currency (which has been stable since March of 1965 at 270 won to the
dollar), or other changes,
Though such risks are present, I would think
that for many foreign investors the inducements would outweigh such fears.
The one business that does not appear extremely attractive is
banking.
While seeking to attract foreign capital (about $170 million will
come in this year), the government is anxious to hold inflationary pressures
within some limits by discouraging domestic consumption.
To that end, it
requires the banks to pay 30 per cent on savings deposits (which will go up
about $15 million this year) and at the same time they have fixed the maximum
inter est rate to be charged on loans at 26 per cent .
In addition, the Bank
of Korea requires reserves of 45 per cent of time deposits and 55 per cent
of demand deposits, on only a part of which does it pay interest, and that
at only 5 per cent.
Thus, the banks would be suffering dis as tr ously except
that the government guarantees the banks an income adequate to pay a
dividend of 13 per cent.
This is obviously an inadequate rate (in competition
with a 3 0 per cent savings interest rate) to attract any additional capital
into the banks (and they need it).
But with the government owning about
one-half of the bank stocks, this is not considered a severe handicap.
Despite
the discouraging immediate prospects, several Japanese and .American banks
have applied for the privilege of opening branches.
It appears that the Chase
(which is to open in June), the First National City and the Bank of America
will be allowed to open this year, and that two Japanese banks may also be
-22-
permitted to open .
One problem they won't have is finding help .
.
University graduates are happy to start at $50 per month .
For the American businessman, Seoul is not a bad place to
visit or even to be stationed for some length of time.
spot.
It is not a garden
The countryside is mountainous without the beauty of forests.
The city itself is bleak and it is cold about six months out of the year.
The tourist finds adequate hotels,
Walker Hill Resort, built
by army labor and named after one of our general s killed there in the nineteen
fifties, is large (263 rooms) and quite comfortable, with good food and a
large and well-run night club, much more elaborate than any in Chicago and
with many available hostesses .
It also has a skeet range, archery, bowling,
tennis, swimming and horseback riding.
The downtown hotels are comparable
to medium-class, commercial hotels in the United States, but there is a
new one being built and it is said that Hilton intends to start one later
this year.
Korean food, based on rice and kimchi (cabbage, red pepper,
ginger, salted fish and onion) tends to be quite highly spiced with garlic.
Even the Pulgoki, or "fire meat,
rubbed in .
11
broiled beef, has a good deal of garlic
(Indeed, there is a pervasive air of fat and garlic in many of the
villages and I noticed several of the westernized Koreans frequently taking
S en- Sen or its equivalent, apparently to ameliorate their garlic breath . )
Their fish is good and they have plenty of rice {although they do not produc e
enough soybeans or wheat).
-23-
Their local beer is good and they have many places of enter tainment.
Instead of geisha houses, they have kieseng houses.
guests of Mr. Kim, we visited one -- Sun Woon Gak -Supreme Paradise.
11
As the
11
the Orient 1 s
Located outside of the city at the base of the mountains,
an extraordinarily elaborate and beautiful restaurant with very pretty girls,
:;::::
good food and more cheerful entertainment than is common in Japan .
There are several golf courses in the city and I believe there is good fishing in the streams and fairly good boar hunting in the mountains.
For the ladies there is shopping for beautiful silks and satins,
amethysts and topaz and some antique art.
Travelling seldom makes one chauvinistic.
Knowing ourselves
and our political leaders, we tend to look on our nation 1s policies a little bit
cynically, but one cannot visit Taiwan or Korea (or contemplate what will
probably be our role after a truce is ultimately attained in Vietnam) without
feeling a real sense of pride.
discipline.
::::
We, too, have been willing to accept a
We, too, have been willing to postpone some immediate
I had a very pretty girl as my companion. A graduate of Seoul
University, she majored in music and hopes to become a concert
pianist. As she had been on the job only three days, she was anxious
to do the right thing. At one point she asked if I had any hobby. When
I asked her the same question, she said, 11 0h, yes, kissing. 11 When I
said I didn't think of that as a hobby, she replied, 11 But I do it every
day. 11 After some more conversation, it developed that she meant
kieseng -- the art of entertaining.
-24-
enjoyments, in order that our government could do what it felt was right,
and we have supported it in spe nding tremendous sums to enable these
oriental societies, to whom initially we owed nothing, to survive and
maintain their freedom and to build economies that provide employment
and the prospect of a better life for millions of Asiatics,
I have never completed a vis it to a country for which I felt
as much hope as I feel now on leaving the Republic of Korea.
With appreciation for the opportunity to take this trip, I am
Capita I: Pyongyong
Popuiation (1964): 11 ,800,000
Density: 254 per square mil e
Area:
Capital: Seoul
Population (1965), 28,353,000
Den~ity: 746 per ,quo re mile
Distribution (HI. 1955):
Urban: 38 percent, Rurol: 62 percent
Area: 38,004 square mile.s
Elevation: Highest point: 6, 398 feet
Lowest point: Sea level
Prlnclpol language: Koreon
Principal religions: Buddhism; Confucianism,
Chondokyo; Chrl,tianity
Political divi sio ns: 9 provinces and special
Municipality of Seoul
Currency unit: 1 Won= 100 Chong
National holiday: August 15, Independence Day
National anthem: A.e-Gukka
46 1540 square miles
Elevation: HlghHI point: 9,003 feet
Lowest point: Seo level
Principal language: Korean
Principal rel19ion1: Buddhism; Confucianism;
Chondokyo; Christianity
Political divi1ion1: 9 provinces
Currency unit: 1 Won = 100 Chong
KOREA
ECONOMY
Sea
of
ECONOMY
HEAVY INDUSTRY
LIGHT INDUSTRY
Chemicals
m
f ood Processing
leather Produ cts
Pulp & Poper Pro duc ts
@
Rubber Producrs
[)
~)~~~c~lay & Gloss
:t,-
Te x tiles
SCALE
75 Miles
Q ••<• • <•.
c:t, Cotton
5
~
Silk
C
Tobacc o Products
OTHERS
J
Fishing
&,
Seaport
I[;,-
Wa te r Pow er
D
Fis hing Arecs
MINING
~.
~ G , Gra phite
~c
Cool
'¢1 c"'
Copper
~G
Gold
D
Plantation
Ag riculture
D
Forestry with so me forming and Po sture
~l
~
Mg
Magnesium
Iron Ore
~r.
Tungsten
Leed
~Tc
Tole
AGRICULTURE
LJ
General farming
D
D
Seasonal Grazing with
Sparse AgricultUre
Non-Agricultural Areas
Cop~!ght by Rend McNelly & Co.
end R e produced with Their Permission
Seoul, Korea
April 4, 1967
Dear Homer:
"Kor ea, that is, South Korea, the Republic of Korea, has
very little.
11
It has no forests -- the Japanese destroyed them.
11
lt has no hydroelectric power -- that's in the north.
''It does not produce enough food to feed its peopl e.
lt has almost no factories,
11
11
Ambassador Winthrop Brown
It has no oil.
11
continued.
11
It has no gas.
1
'lt has only one ass et - - and that is its people.
11
The Korean people have a great capacity to learn, both the
rural farms and the city people.
11
They are able to laugh at themselves -- and the Koreans
are not afraid to say ' thank you.
1 11
They have said "thank you,
11
and said it very well .
The dis-
tinguished business leaders who met Dick Thomas, Olof Lindstedt,
Mrs. Freeman and me at the plane expressed it in the patois picked up
from our service men :
11
Stateside send son when we have war.
State side have war and we send son.
11
Now
-2-
And they said it without
11
ifs 11 or "buts.
11
Our Ambassador
recalled his visit to President Chung Hee Park to ask for a division of their
troops to go to South Vietnam.
Park 1 s reply was simple:
11
Certainly, see
my Chief of Staff and tell him when and where you need them,
11
Last year
when we asked for a second division, it, too, was provided -- for a total
of 45,000 Korean troops now in Vietnam.
Of course, the Koreans were heavily indebted to us.
But so
are many other countries which have not sent so much as a squad to Vietnam.
We have supplied most of the military equipment, not only for the two divisions in Vietnam, but also for their very large army at home ,
Nevertheless,
this small country (approximately thirty million people in a land the size of
}~
Minnesota) spends 80 to 85 per cent of its national budget
to maintain its
military force, the fourth largest in the world, whereas so much of the world
avoids such expense, preferring to rely on the United States.
Yes, the Koreans are not afraid to say "thank you.
11
Although it
took only a few words for President Park to agree to send us his troops, it
,:,
Its total budget is up from less than thirty billion won in 19 64 to over
seventy billion in 1966, Half of this is raised in direct and half in indirect
taxes, Personal income taxes account for about 50 per cent more than
corporate income taxes . Much income still escapes taxation and it may
be that some corporations and individuals keep several separate earnings
statements. (At present no American accounting firm has a branch in
Korea,) Despite this problem, the government is rapidly increasing
tax collections -- this year to one hundred billion won.
-3-
took great political courage, for his country is poor and, through 1964,
with rampant inflation raising prices as much as 20 or 30 per cent a year,
the average man 1 s purchasing power was not rising but, in fact, declining
a little each year .
Why should he help the rich United States with its war?
As President Park anticipated, the opposition party made great capital of
this and condemned Park for his subservience to the United States.
As eve n
President Park could not have anticipated, but as the missionaries and the
local village officials soon began to report, the people in the remote villages
tending their tiny tea paddies, when they h eard the news, were not in fact
resentful -- they were proud.
Their country was so st rong that the United
States needed their help and they were paying back their debt.
Once again the soldier turned politician, President Park, had
outwitted the opposition and done so with what would have seemed an unpopular
act.
The opposition had to back down and now merely grouses that certainly
the country shouldn't send any more troops.
The presidential election coming up on May 3 will offer the
people the choice of Park or 71-year old former President Po-Sun Yun who,
campaigning on Saturday, called for ''an end to the present government's
,,,
,,,
autocratic rule, corruption and subjugation of the nation to foreign hands.
11
Although it is arrogant to express any opinions about so comp lex
a society after a visit of only two days, it seems to me that in a sense the
oppos ition's points are valid.
,:,
As reported in the KOREA HERALD for Sunday, April 2, 1967.
-4-
1.
The present government is autocratic.
2.
There is widespread corruption.
3.
The nation is dependent on foreign influence.
But unless I have completely misread the people I s attitude,
President Park has little to fear -- in 1967.
His real test may come four
years from now in the spring of 1971.
The government is autocratic in the sense that it is run by an
extraordinarily courageous, forceful, indefatigable, determined revolutionary
army officer who seized power by a coup d'etat on May 16, 1961, and has
since run the country on the bas is of what is good for it in the long run,
whether it is popular or not.
Thus, to reduce crime and a possibility of
insurrection, the country is subjected to an absolute curfew from midnight
to 4:00 a. m., and, though we are driven in a car with a CIA sticker that
allows us to go through any roadblock and avoid any detention, if we were
to be out fifteen minutes past twelve o'clock, we would be locked up.
His determined autocracy takes many other forms.
Earlier a
novice in this field, he has learned a great deal about economics and is
determined to pr event inflation and to encourage i nvestment in capital as sets
in a country heretofore almost devoid of productive machinery.
To do this
he has held wages at a low level, offered relatively little in the way of
consumer goods and has directed production toward investment (primarily
investment in the production of goods for export), thus providing both jobs
and foreign exchange,
-5-
Park I s government has accomplished near miracles.
which were 120 million in 1964 will exceed 350 million this year.
e xpectancy has doubled in the last thirteen years.
in an over-populated country) is down.
Exports
Life
The birth rate (so important
In the past two years gross national
product has risen 12 per cent each year in real terms and, though by our
standards inflation is rampant, the consumer price rise last year was limited
to 14 per cent.
Wages have risen more rapidly so that for the past two years
the ordinary man has improved his purchasing powe r .
People are dressing
better, going to the movies more (some 170 million paid admissions last year).
There are 150 thousand television sets as against none five years ago.
Pilferage
from U. S. supplies is down by one-half and, as we hear almost every place else
in the world,
11
You just can 1t find a maid her e.
11
This is not to say that Korea is a land of milk and honey.
It cannot
be compared to Japan even fifty years ago, but it stands today about where
Ta iwan was seven years ago.
These are great accomplishments, but until 1965 they were at
the temporary expense of the average man.
I can't imagine a political leader
in any other free democratic country having the courage to adopt the stern
measures which Park has enforced and I am overwhelmed both by the people 1 s
approval of his severe disciplines; at the sa~ t ime one would have to acknowledge that Korea is not quite as free as we might expect.
But the next five-
year plan calls for a 31 per cent increase in per capita income and, though
the people don 1t love tough General Park, they believe he will achieve this
and they are not sure anyone e ls e could.
-6-
The government is also corrupt, as the opposition complains.
Businessmen report that in dealing with the government at lower levels
(and the government is all-pervasive -- just to walk out of the Seoul Airport
requires inspection and stamps by five separate officials), it is necessary
in every .i nstance to bribe petty officials or at l east to pay them something
(
11
bribe" seemed too harsh a word to the Koreans, who look on this as a
normal form of compensating the government bureaucrats who are woefully
uncle rpaid).
In our limited stay we had no direct contact with corruption.
On the other hand, we did see a great many of the higher officials from the
Deputy Prime Minister,:, on down and, though it is possible they may have
risen through the lower ranks of corruption, these senior men were as
bright, knowledgeable, aggressive and confident as any government officials
I have ever had the pleasure of meeting.
It may be that we were directed
primarily to those who speak English, but we saw the head of the Economic
P l anning Board and his assistant, the Minister of Finance and his assistant,
and the heads of the two largest commercial banks.
Each of these men spoke
English fluently and most of the government officials to whom we talked had
been educated in the United States.
,:,
They were knowledgeable, incisive, and
Chang Key-Young, 51 years old, ex-banker and newspaper publisher,
is referred to with awe as "the big bulldozer, 11 an apt description
of his overwhelming drive and aggressiveness. Dick, Olof and I met
with him twice and were worn out after ten minutes of his "Will you
help us? Thirty million for fifteen years? Ten? Ten million for three
to five years? We will help you -- what will you do? 11
-7-
hard working.
One assistant told us that he had had no Saturdays and only
one Sunday off i n the last six months .
I accept the fact that there is corruption, but I am impressed
with the fact that the governmental leaders are extraordinarily able and
overwhelmingly confident of the future of their country.
The opposition is right in its contention that the government is
subject to great foreign influence.
obvious,
It is, indeed .
Our presence is most
Of the two newest office buildings -- of equal size and side by side
one houses the Korean Government financial offices (the Economic Planning
Board and the Ministry of Finance) .
The other is occupied by the U, S. 0. M.,
our Economic Aid Mission,
Many store fronts and advertisements are in
English as well as Korean .
The streets are full of jeeps, both n ew military
models and older ' 'surplu s" models now painted black and used as everything
from taxis to "limousines" (but never as trucks - - they are much too fine
for that!).
The R . 0. K. soldiers wear U. S. Army uniforms and our military
installations and U.S. 0, M, compound with its golf course are prominent .
Many American firms are moving in and the Korean businessman speaks
frequently about his "golfa game . "
In addition to our economic and military
aid we are buying about ten or twe lve million dollars of goods each year for
Vietnam and R. 0. K. soldiers and workers tre re are remitting another fifty
million dollars.
-8-
Our presence is obvious.
Our aid and military influence may
decline in the days ahead; our business influence is almost certain to
increase,
President Park,in his determination to advance the economy, has
caused the legislature to adopt the Foreign Capital Introduction Law to lure
capital into Korea, in part by offering the inducement of a five-year tax holiday
to any company that has at least 25 per cent of its equity invested by foreigners.
At a time when most other economies (notably the Japanese) seek to discourage foreign investment, Korea is extraordinary a.nd, though it offers
a limited domestic market, it provides cheap, high-quality labor that should
be extremely attractive to many of our manufacturers.
The Japanese are making strenuous efforts to take advantage of
Korea I s cheap labor, but the Koreans still harbor intense resentment against
the Japanese.
One large employer told me that he had recently employed a
very able young man who, after six months, resigned because there was so
much Korean exchange of business with Japanese firms.
Syngman Rhee,
who was deposed by Park's coup in 1961 (and has since died), is earning
renewed admiration for his having had the strength to accept a slower rate
of economic growth as a price for excluding the Japanese during his regime .
,,,
......
But the Japanese are out to overcome this if possible.
,:,
Today, even the
The "normalization agreement " (re-establishing diplomatic relations)
signed in 1965 re-established relations between the two countries -- an
act of grave political significance to both governments - - theretofore
quite hostile. It also provided something less than a billion dollars
($800 million), some in gifts, some in loans.
-9French are coming in and are about to begin local assembly of the Renault
for sale throughout Asia.
Thus, the opposition is right in pointing to the fact that the
present government is autocratic, there is widespread corruption and the
nation is subject to foreign influence, but (on the bas is of my very superficial
know ledge) I would guess that on May 3 President Park will do very well.
What kind of people are these that willingly accept these burdens?
In the first place, they are of Tungusic and Mongolian origin (as
a result of invasions beginning in the third millennium B. C.) and this is reflected
in their appearance,
Dede asked some of our Korean friends to describe what
they felt were the physical differences between themselves and other Asiatics .
They felt that they are a bit taller than the Japanese and have rounder and
flatt er faces.
Their eyes are less slanted than the Chinese and their color
somewhat lighter,
In the second place, they are much more cheerful, from the
dancer in the kieseng house to the workers in the city and the villagers on
their tiny farms, they are smiling.
Even when our driver speeds into a crowded
street with his rude horn honking, the people scamper out of the way without
a gesture or a curse, very nimble but unperturbed .
In the third place, they are hard workers.
Driving through the
countryside on Sunday, we were quite impressed with the industry; girls
sitting by the side of the road breaking rocks into gravel with hammers,
-10-
farmers working on their mud dikes which hold the precious water to
irrigate their room-size paddies, the constant stream of bicycles carrying
everything from a supply of tinware utensils to twenty-foot trees (the
Koreans are replanting every place), the bullock carts loaded with black
cylinders of coal dust and clay which virtually every home burns in its
stove.
They work all of the time and they work very effectively.
Joel
Bernstein (a graduate of the University of Chicago), the head of our Aid
Mission here, reports that the Fairchild Company has found the Korean women
not only as adept as their American counterparts in assembling semiconductors, but able to keep up a rapid work rate for longer hours.
This is
at wage rates less than half of that in Japan, and much less than one-tenth
:{::
of ours -- about 501 a day.
Lastly , they are enthusiastically optimistic.
I can only under -
stand this confidence in the face of the extraordinarily low living standards
that they have suffered in the past.
Today, with an average annual income
of about $105, they are still very poor, but compared to what they were ten
or twenty years ago, they are better off and, though their real purchasing
power declined from 1960 through 1964, there has been an increase in the last
two years. They are confident it will increase rapidly in the future.
,:,
Of course in time these wage rates will increase. There are labor
unions, but with unemployment still at 7 or 8 per cent there is no
great upward push .
-11-
Long the thin slice of ham between the thick slices of bread -China 120 miles (across the Yellow Sea) to the west and Japan 120 miles
(across the Korean and Tsushima Straits) to the east, arrl with the U.S. S . R .
just north of them across the Yalu and the Tumen Rivers -- Korea has been
repeatedly invaded from all three directions.
There are few Koreans now alive who had any mature experience
before the Japanese invaded their country in 1910 and began a harsh domination (as contrasted with quite a sensitive rule in Taiwan),
The Japanese
set out to destroy Korean institutions and names (they even changed the name
of the country to
11
Chosen").
They humbled the people (who feel that, culture
having come to Japan from China via Korea, they, the Koreans, are superior
to the Japanese).
This domination continued until the end of World War II.
At that time, President Roosevelt with a generous gesture gave
the north half of the country - - all of that lying above the Thirty-eighth
Parallel of Latitude (about the latitude of San Francisco) - - to the Russians
as a reward for their belated and modest help against Japan, and under the
supervision of the United Nations an election in the south half was held on
May 10, 1948, and the Republic of Korea was created.
This division was
a bum bargain for the free world, as the Japanese had built all of their
heavy industry and 85 per cent of their hydroelectric plants in the north.
The south, cut off from its electrical energy and raw materials,
was industrially weak with virtually no minerals or natural resources .
A
mountainous, undeveloped, overpopulated, agrarian country whose only raw
mate r ial, its forests, had been decimated by the Japanese, unable even to
-12-
feed its elf, South Korea was obviously weak.
This naturally suggested
to the rulers of the richer, more industrially developed north that, if they
were to move down and take over the southern half, no one would seriously
resist.
The South Korean Government was obviously too weak and there had
been some statement from the United States that was interpreted to indicate
that it would not interfere.
But when the Communists did invade in 1950, the southerners
fought furiously and a decisive President Truman induced the United Nations
to come in (with the United States bearing most of the burden} and to engage in
a long, hard war .
We paid a high price.
suffered 158, 000 casualties.
We may recall that U.S. troops
We are more likely to have forgotten that the
South Koreans suffered 1,313,000, including women and children.
Our government must have been sorely tempted to allow MacArthur
to pursue the invaders above the Thirty-eighth Parallel and to take over the
more productive northe rn half of the country.
Perhaps if we and the ROK had
been acting alone we could have done so, but for the United Nations defense
was one thing, invasion quite another.
Thus, in July of 195 3, an armistice was achieved at the Thirtyeighth Parallel, which remains probably the most festering border between the
Communists and the free world today .
As was stated in the SATURDAY
REVIEW (October 8, 1966) ;
Nowhere else in the world where people of different
ideologies meet is there the same open contempt.
Nowher e else does the boiling point appear to simmer
so constantly and ominously. 11
11
Officially the two halves are still at war.
A cease fire was
negotiated fourteen years ago, but still no peace treaty has been signed.
-13-
Just last week, in advance of a scheduled meeting between the north
and south at the border, word was received that the head newsman cover ing the meeting for the north (their top newsman with rank equal to a
deputy minister) would like to defect .
At the end of the meeting, as the
North Koreans entered the ir cars, the newsman ra,n for one of ours.
Just
as two North Korean armed guards reached him, a Captain Bair ~ho had
once played with the Chicago Bears) dove i nto them.
The newsman reached
our car and escaped to freedom.
As the border is only about forty miles north of Seoul, we had
planned to drive up there early this morning (25, 000 people visited our side
last year) but a change in our appointments made that impossible.
*
Thus, at the war's end in 1953, South Korea was destitute and
our government, having helped to achieve its freedom, stepped in to aid
its economy.
In the intervening years we have given over six billion dollars
in economic and military aid which has enabled them to remain independent
(but at a far lower cost than we would have incurred had we used our own
more expensive soldiers) .
The economic (as distinguished from military) aid,which at one
time was as high as $230 million per year, is now down to an annual rate
of $45 million dollars and is decreasing at the rate of about ten million
dollars per year.
:::,
Thus, it is anticipated that it will phase out entirely in
This may have been fortunate, as the following day "one of the most
serious gun fights since the armistice 11 was fought in the truce zone
with four North Koreans shot to death and two wounded. See the
JAPAN TIMES, Friday, April 7.
-14-
four or five years (as it did a few years ago in Taiwan).
Although my observations were very brief, it seemed to
me that the Korean village is very poor .
was two or three years ago, but poor,
Perhaps not as poor as it
The houses are made of mud bricks
(about the same as the adobe bricks used in our Southwest) with rice straw
roofs.
There are no houses on the farms; they are crowded close together
in the small villages, each surrounding a small mound or open field.
houses have one or two rooms, with windows of paper.
Most
The more affluent
villagers (and many city families) have cement tile roofs with three or
four rooms, generally in an
11
L
11
shape with a wall around the other two
sides to enclose a yard or garden .
Through the kindness of International Minerals and Chemicals,
we met a Mr. K. K. Kim.
A wealthy, cultured gentleman who was reared
in North Korea (as were a great many of the business and government
leaders and some ten million refugees who have stolen south since the end
of the war), one of the country's leading poets, who led the way from the
traditional stylized three or four line poem to freer verse, Mr. Kim came
south for freedom and has achieved both business and cultural importance.
The leading manufacturer of grass cloth, a movie producer, trader, and in
,:,
Almost half of the population are named Kim, Pak (which we generally
pronounce Park), and Yi (which we generally pronounce Lee) , Other
very common surnames a re Cho i, Cho, Chung, Han, Kang and Yoon.
A person generally has three names and the surname may either be used
as the first, middle or last name, but since there are so few family
name s, the Korean knows immediately which of the several names is
the f am il y name.
-15-
shipping, an excellent dancer, he has collected pottery (one bowl is
valued at more than $30,000) and art to the point where, when Mrs. Freeman
was disappointed that she could not visit the National Museum (because the
wife of the Prime Minister of Thailand was there), Mr. Kim's daughter
said,
11
Never mind, we 111 go to Father 1 s house; he has a better collection.
It was a lovely house,
11
Mrs. Freeman reports that it was sur-
rounded by high-rise apartments and office buildings, protected by a high
wall with barbed wire on top, and was one of the few lovely old homes in the
city.
With the typical dull gray tile roof, the exterior was partly plastered
and partly highly polished wood,
Some of the windows were of paper, some
of glass with etched flower designs in the center.
The homes were heated
in the traditional Korean manner with an ondol floor .
The round cylinders of
coal dust and clay are burned in small ovens and the smoke and heat are
carried from these through ducts in the clay or cement floor .
(Thus, in the
typical house the oven serves the dual purpose of cooking and heating.)
The
rooms are separated by walls or shoji screens and the house surrounded by a
narrow, wooden balcony which is the principal means of getting from one room
to another.
The Kims 1 home had a modern bath with running cold water and, to
Mrs . Freeman's delight, a crocheted toilet seat cover,
The furniture was
upholstered and covered in heavy linen slip covers of the kind that were more
common in our nicer homes years ago and which remain a fixture in the
Japanese offices today.
There were lovely fresh spring flowers casually
placed in bowls (the Koreans think the Japanese flower arrangements far too
-16formal and stylized).
Mrs. Freeman and the family sat on colorful silken
pillows on the floor around a black lacquered dining table inlaid with mother
,I,
of pearl and ate with silver chopsticks ..,,
Mrs. Freeman reports that their luncheon was of a clear soup
followed by a dish of boiled fish and beef put together so closely that it
looked like a striped whole.
This was followed with pressed egg yolks and
vegetables, tiny stuffed green peppers and a bowl of rice.
It was ended
with a glass of tepid rice water (the water that the rice had been cooked in),
followed by citron tea -- which is made without tea by pouring boiling water
over very thinly sliced lemon, previously heavily sugared and stored underground for a year before serving - - with little pine nuts floating on top.
Although Mrs. Kim does not speak English, her three daughters
all speak fluently.
The one with whom we had become best acquainted,
Mrs. Huh, graduated from the University of Seoul with a major in English
literature and then went to Northwestern University and obtained her graduate
degree in speech.
The girls were much more outgoing than Japanese women,
The ladies talked about clothes.
Historically, the Koreans wore
mostly white, and were known as the "white-clad race" in distinction from the
Chinese and Japanese who wore much more color to reduce the necessity
for cleaning.
Even today in the villages you see many men and women dressed
in white -- apparently clean even though the wearer may be repairing mud
~:~
These are heavier but much thinner than the bamboo chopsticks used
more generally in Japan and, in fact, are much more difficult for us .
- 17-
dikes around his paddy.
The woman's han-po (1'kimono" is a hated Japanese
word) is an ankle -length fully gathered skirt with an overblouse (chogori)
tied in a bow in front with ribbons.
Although many of the younger women
now wear western clothes in the summer, the traditional costume, now made
in beautiful silks and brocaded satins, is very popular in the winter, "for we
can wear much more underwear underneath without its showing.
11
The ladies also talked about religion and, though we had seen a
number of churches, this is apparently due more to diversity than intensity
of religion.
Shamanism, an animistic nature worship, was the original
religion and remains important in the rural areas .
Buddhism reached its
peak in the eleventh century and has d eclined steadily, though there has been
some revival of interest in the last few years ,
Confucianism, really more a
code of ethics than a religion , is the strongest influence,
of the people are Christians ,
About 8 per cent
In the Kim family, Mr, Kim and Mr, Huh have
no religion, but accept the precepts of Confucianism.
Mrs. Kim is a Buddhist
and Mrs. Huh is a Methodist .
They also spoke of marriage.
In older days all marriages were
arranged and this remains the practic e in some of the rural areas.
Among
the more e ducated city families the decision is apparently about fifty-fifty.
For instance, when Miss Kim returned to Seoul from Northwestern, her
parents discussed with her the kind of a man she might like to marry.
Clearly
he should be educated and have some foreign experience in order that they
would have this common ground ,
The father urged that she pick a professor,
-18 -
as she herself teaches, and because professors have much more time to
be with their families than do businessmen.
He said,
11
If you marry a
businessman, you can only expect him home one day a week, on Sunday.
11
After considerable discussion, she voted for a businessman and her father
set out to find those he felt were the most eligible.
She picked Mr. Huh,
who himself had graduated from the University of North Carolina
family are people of considerable importance in Seoul.
and whose
It appears to have
been an excellent match for both except that (as a seven handicap player)
Mr . Huh spends Sunday on the golf course.
The Kims are grateful for their girls but put more emphasis on
their eldest son (who is traditionally accorded considerable respect even in
his youth) and they sincerely hope that their daughters I marriages will result
in numerous grandsons.
For a poor country it is surprising the emphasis that has been
placed on education.
Virtually every village, no matter how small, has one
building w h ich,by its size and the orderliness of its yard, indicates that it is
a school.
Lit eracy is something over 85 per cent , there is great emphasis
on vocational training, and many go on to higher education .
There are several
universities in Seoul with an enrollment in excess of 30,000 students .
If I have been impressed with any one thing on our trip so far,
it is that it is of the greatest import ance tha t we in the United States take
advantage of these low-cost labor pools and do not abandon them exclusivel y
to the Japanese .
There is no large domestic market in Korea.
It is not a
-19-
place for us to produce radios or televisions for local sale, but it is
certainly a place to produce goods for sale throughout Asia and for return
to the United States.
The Koreans produce magnificent textiles, their silks
are beautiful (it's either the woof or the warp of all Thai silk that comes
from Korea),
Korean-made shirts sell at $1. 40 in Tokyo in competition with
Japanese - made shirts selling for $4. 00 and up .
Though they import their
wool from Australia, they are now making first-rate woolen cloth and, with
patterns and styles from our country, I would think Korea would be an
excellent source of manufacture of men's suits and coats.
For some products, such as automobiles, which require a very
large local market in order to achieve the mass production necessary to
become competitive, Korea, despite its far lower labor costs, may not offer
as gr eat an inducement as Japan, for Japan has the large tariff-protected
market ,
But for the one thousand and one products that can be distributed
throughout the world, Korea, Taiwan and Thailand all offer the tremendous
advantage of low labor costs and, of these three, Korea probably offers the
best, most willing and deft workman . .
This labor market, combined with the government's enthusiastic
welcome of foreign capital (other than Japanese) and especially American
investment , is most attractive.
market knowledge.
The Kbreans need capital, technology and
They prefer to get it from the United States, for they
have gotten to know us as comrades in arms, they know we have no colonial
ambitions, and they feel that we are aggressive enough to counterbalance
the Japanese.
-20-
Thus, this welcome, plus low-cost labor and the tax inducements, offers a combination of advantages which many of our companies
should seriously explore.
To date we have not done so to the extent that
we should, and the passage of time will make it more difficult to do so.
For instance, we were told that within four years all central telephone
equipment will be German (Siemens); no U. S . company competed for
the business.
In making a substantial capital investment in any foreign
country one is naturally concerned about the continuation of those qualities
which make it initially attractive.
An invasion from the north would com-
pletely change all present conditions, but our Ambassador and the Korean
business people think this risk is negligible .
A very severe drought
for
a year or two might bring about a change in government, as might extremely
severe reverses in Vietnam.
Inexperienced in democracy, Korea has no
record of political stability.
Our Ambassador says that on his arrival the
l argest group of men he met were ex-ministers, but a change in government
would probably not mean a change in underlying philosophy .
With almost
every South Korean family having relatives in the north, their preference for
democracy is so strong that it is certainly unlikely that they would in any
::=:t
event become socialistic or communistic .
,:c
There are lesser risks, a change
There are some Communist influences . A year or tv.o ago there were
seve ral disruptive student protests, which in the past hav e been of major
political influence. President Park, believing that the students w e re being
led by a few Communist professors, closed every university and declared
they would stay closed until the named professors were dropped from the
faculties . This "interference with academic freedom'' gave our government
representatives a cold chill -- but it worked and "the myth of student
invincibility was destroyed. 11
-21-
in the tax laws (which are extremely intricate), a devaluation of the
currency (which has been stable since March of 1965 at 270 won to the
dollar), or other changes,
Though such risks are present, I would think
that for many foreign investors the inducements would outweigh such fears.
The one business that does not appear extremely attractive is
banking.
While seeking to attract foreign capital (about $170 million will
come in this year), the government is anxious to hold inflationary pressures
within some limits by discouraging domestic consumption.
To that end, it
requires the banks to pay 30 per cent on savings deposits (which will go up
about $15 million this year) and at the same time they have fixed the maximum
inter est rate to be charged on loans at 26 per cent .
In addition, the Bank
of Korea requires reserves of 45 per cent of time deposits and 55 per cent
of demand deposits, on only a part of which does it pay interest, and that
at only 5 per cent.
Thus, the banks would be suffering dis as tr ously except
that the government guarantees the banks an income adequate to pay a
dividend of 13 per cent.
This is obviously an inadequate rate (in competition
with a 3 0 per cent savings interest rate) to attract any additional capital
into the banks (and they need it).
But with the government owning about
one-half of the bank stocks, this is not considered a severe handicap.
Despite
the discouraging immediate prospects, several Japanese and .American banks
have applied for the privilege of opening branches.
It appears that the Chase
(which is to open in June), the First National City and the Bank of America
will be allowed to open this year, and that two Japanese banks may also be
-22-
permitted to open .
One problem they won't have is finding help .
.
University graduates are happy to start at $50 per month .
For the American businessman, Seoul is not a bad place to
visit or even to be stationed for some length of time.
spot.
It is not a garden
The countryside is mountainous without the beauty of forests.
The city itself is bleak and it is cold about six months out of the year.
The tourist finds adequate hotels,
Walker Hill Resort, built
by army labor and named after one of our general s killed there in the nineteen
fifties, is large (263 rooms) and quite comfortable, with good food and a
large and well-run night club, much more elaborate than any in Chicago and
with many available hostesses .
It also has a skeet range, archery, bowling,
tennis, swimming and horseback riding.
The downtown hotels are comparable
to medium-class, commercial hotels in the United States, but there is a
new one being built and it is said that Hilton intends to start one later
this year.
Korean food, based on rice and kimchi (cabbage, red pepper,
ginger, salted fish and onion) tends to be quite highly spiced with garlic.
Even the Pulgoki, or "fire meat,
rubbed in .
11
broiled beef, has a good deal of garlic
(Indeed, there is a pervasive air of fat and garlic in many of the
villages and I noticed several of the westernized Koreans frequently taking
S en- Sen or its equivalent, apparently to ameliorate their garlic breath . )
Their fish is good and they have plenty of rice {although they do not produc e
enough soybeans or wheat).
-23-
Their local beer is good and they have many places of enter tainment.
Instead of geisha houses, they have kieseng houses.
guests of Mr. Kim, we visited one -- Sun Woon Gak -Supreme Paradise.
11
As the
11
the Orient 1 s
Located outside of the city at the base of the mountains,
an extraordinarily elaborate and beautiful restaurant with very pretty girls,
:;::::
good food and more cheerful entertainment than is common in Japan .
There are several golf courses in the city and I believe there is good fishing in the streams and fairly good boar hunting in the mountains.
For the ladies there is shopping for beautiful silks and satins,
amethysts and topaz and some antique art.
Travelling seldom makes one chauvinistic.
Knowing ourselves
and our political leaders, we tend to look on our nation 1s policies a little bit
cynically, but one cannot visit Taiwan or Korea (or contemplate what will
probably be our role after a truce is ultimately attained in Vietnam) without
feeling a real sense of pride.
discipline.
::::
We, too, have been willing to accept a
We, too, have been willing to postpone some immediate
I had a very pretty girl as my companion. A graduate of Seoul
University, she majored in music and hopes to become a concert
pianist. As she had been on the job only three days, she was anxious
to do the right thing. At one point she asked if I had any hobby. When
I asked her the same question, she said, 11 0h, yes, kissing. 11 When I
said I didn't think of that as a hobby, she replied, 11 But I do it every
day. 11 After some more conversation, it developed that she meant
kieseng -- the art of entertaining.
-24-
enjoyments, in order that our government could do what it felt was right,
and we have supported it in spe nding tremendous sums to enable these
oriental societies, to whom initially we owed nothing, to survive and
maintain their freedom and to build economies that provide employment
and the prospect of a better life for millions of Asiatics,
I have never completed a vis it to a country for which I felt
as much hope as I feel now on leaving the Republic of Korea.
With appreciation for the opportunity to take this trip, I am
Capita I: Pyongyong
Popuiation (1964): 11 ,800,000
Density: 254 per square mil e
Area:
Capital: Seoul
Population (1965), 28,353,000
Den~ity: 746 per ,quo re mile
Distribution (HI. 1955):
Urban: 38 percent, Rurol: 62 percent
Area: 38,004 square mile.s
Elevation: Highest point: 6, 398 feet
Lowest point: Sea level
Prlnclpol language: Koreon
Principal religions: Buddhism; Confucianism,
Chondokyo; Chrl,tianity
Political divi sio ns: 9 provinces and special
Municipality of Seoul
Currency unit: 1 Won= 100 Chong
National holiday: August 15, Independence Day
National anthem: A.e-Gukka
46 1540 square miles
Elevation: HlghHI point: 9,003 feet
Lowest point: Seo level
Principal language: Korean
Principal rel19ion1: Buddhism; Confucianism;
Chondokyo; Christianity
Political divi1ion1: 9 provinces
Currency unit: 1 Won = 100 Chong
KOREA
ECONOMY
Sea
of
ECONOMY
HEAVY INDUSTRY
LIGHT INDUSTRY
Chemicals
m
f ood Processing
leather Produ cts
Pulp & Poper Pro duc ts
@
Rubber Producrs
[)
~)~~~c~lay & Gloss
:t,-
Te x tiles
SCALE
75 Miles
Q ••<• • <•.
c:t, Cotton
5
~
Silk
C
Tobacc o Products
OTHERS
J
Fishing
&,
Seaport
I[;,-
Wa te r Pow er
D
Fis hing Arecs
MINING
~.
~ G , Gra phite
~c
Cool
'¢1 c"'
Copper
~G
Gold
D
Plantation
Ag riculture
D
Forestry with so me forming and Po sture
~l
~
Mg
Magnesium
Iron Ore
~r.
Tungsten
Leed
~Tc
Tole
AGRICULTURE
LJ
General farming
D
D
Seasonal Grazing with
Sparse AgricultUre
Non-Agricultural Areas
Cop~!ght by Rend McNelly & Co.
end R e produced with Their Permission