Ambassador PORTER. No; we haven't committed anything yet. Some of the people who have examined it on behalf of CINPAČ think it has a potential and we are not sure of that yet. In other words, it is a subject that is under discussion and debate in Korea and as between us and CINPAC at this time.

Mr. GALLAGHER. Regarding the manufacture of all military uniforms, are these uniforms that will be used by Koreans?

General MICHAELIS. That is correct, sir. The ROK's manufacture their own uniforms exclusively.

Mr. GALLAGHER. Why would that be a new item?

General LEKSON. I think it is uniform design and also certain things like webbing which they do not now manufacture and certain other items that are portions of the uniform as opposed to just the cloth portion.

Mr. GALLAGHER. The study for the coproduction of the killer boats. Have we passed the study period for those boats yet?

General LEKSON. Design and hopefully into even a water tank test here very shortly of the design of the hull.

Mr. GALLAGHER. How much money is committed to that?

General LEKSON. To the total program?

Mr. GALLAGHER. Yes, the total program.

General LEKSON. I think over a 5-year period we had [security deletion]. This depends on the price of the craft actually. The initial portion for this first year was about [security deletion].

Mr. GALLAGHER. Where will those boats be manufactured, there or here?

General LEKSON. The program as it is developing, and it is still a proposal in discussion with ROK, is that the prototype along with some of the boats would be built here with perhaps coproduction in Korea on the latter portion of the program. This has to still be worked out with the ROK. They have been apprised of it.

Mr. GALLAGHER. Perhaps I should direct this question to Ambassador Porter and Ambassador Brown. The thing that troubles many of the Members of Congress is the economic impact that Japan may be having in Korea as it is having in the Philippines where we have a great deal of responsibility and great investment and yet the profits of commercial enterprise and economic development seems to be going to Japan.

Could you elaborate on what the problems are? Are they serious? Ambassador PORTER. There are certainly serious problems of adjustment in the balance of trade between Japan and Korea. Japan is a very enticing market for the Koreans either to look for investment or to look for machinery with which to equip their industry.

This has led to a situation where the Japanese have invested both in loans to provide machinery for Korean factories and have made an equity investment in those factories through capitalization to permit commencement of operations, et cetera, and thereby profit from the output of the mills themselves.

Therefore, you have the two categories: the Japanese who is getting a return on machinery he has financed and the Japanese who is getting a return on the amount of investment capital he has provided quite apart from machinery.

Needless to say, if we are looking at the textile segment of Japanese investment, none of the textiles produced by firms in which the Japanese may be interested are allowed into Japan.

The purpose of those items, the end, shall I say, placement of those items is in the United States or in countries which will admit them. The Japanese have sold, because of their proximity and because of low prices, a great deal of farming machinery, the lightweight type of machinery, to the Koreans.

They have certain kinds of equipment well suited to rice culture and for those reasons they have been able to build up a commanding trade in Korea itself. In return, the Japanese restrict their take to Korean fishing products, nets and a very small variety of goods such as plywood, the manufacture of which, incidentally, they finance in Korea itself.

There does not seem to have been a major effort by the Japanese to bring their trade into balance. So far as U.S.-Korean trade is concerned, it is in quite good balance. We, of course, do provide a great deal of finance for development of Korean industry through the ExImbank. Now U.S. Government investment loan contributions are decreasing and Koreans are looking to normal areas of international finance for their needs.

They are coming to American private banks as well as to the ExImbank and are finding the funds that they require there. Nevertheless, they have, of course, the problem with us of paying for more expensive items than they might be able to buy in Japan.

However, they prefer to do that, if at all possible. Provided the spread is not too great, they will in most cases go for the American product.

As soon as the Ford Motor Co. car came on the market in Korea, it cut 50 percent out of the sales of the Japanese product there. I cite that purely as an example.

Our trade with the Koreans is on quite a healthy basis and we have no reproaches from them and, in fact, we have many requests to ease credit to Korean firms so that they can buy more.

I think these few words explain the difference between our relationship with them and those they have with the Japanese.

Mr. GALLAGHER. Thank you Ambassador Porter. Do you have anything to add to that, General?

General MICHAELIS. I do not, Mr. Chairman.

Mr. GALLAGHER. Mr. Whalley?

Mr. WHALLEY. No questions, Mr. Chairman.

Mr. GALLAGHER. General, that concludes our hearing for today and we want to thank you very much for your cooperation. We also thank your staff as well as Ambassador Porter and Ambassador Brown for being with us again today.

It was a pleasure to have you with us and we are greatly pleased by your presentation and to hear that things are going well. We shall report to the full committee and to the Congress that matters in Korea are still worthy of support of at least this body of Congress. Thank you very much.

The committee stands adjourned.

(Whereupon, the executive session adjourned, to reconvene in a hearing at 2 p.m., June 10, 1971.)

AMERICAN-KOREAN RELATIONS
IONS

THURSDAY, JUNE 10, 1971

HOUSE OF REPRESENTATIVES,

COMMITTEE ON FOREIGN AFFAIRS,

SUBCOMMITTEE ON ASIAN AND PACIFIC AFFAIRS,

Washington, D.C.

The subcommittee met at 2:20 p.m., in room 2172, Rayburn House Office Building, Hon. Cornelius E. Gallagher (chairman of the subcommittee) presiding.

Mr. GALLAGHER. The subcommittee will come to order.

you

The Chair apologizes for the delay in getting underway. As know, we have a very important piece of legislation on the floor and most of our members are there. They will be arriving as soon as it is possible.

This session of the Asian and Pacific Affairs Subcommittee will come to order, and I want to welcome all of you here today. This day concludes the 3 days of hearings into American-Korean relations. During the past 2 days, we have heard in executive session from American Ambassador to Korea William Porter, and the Commanding General of the U.S. troops, U.N. Command, General Michaelis. I truly wish I could report to you everything they have said because, in spite of some disturbing information, the vast majority of what we heard is both extremely helpful and genuinely good, as regards the American-Korean relationship.

The United States has suffered some problems in its policies since World War II. We must be candid and realize that the American aid program, particularly in Asia, has not always been an unqualified suc

cess.

Korea, however, stands in sharp contrast, and since our society seems to be willing, almost eager, to castigate itself when things do not go perfectly, I believe we should all share a moment of pride about what has been created in Korea. Most of the credit, of course, for success must go to President Park who has shown independence, ability, and sound judgment in leading his nation from the dismal days of the early 1950's to Korea's vitality, its economic expansion and political stability, which even the most uncharitable observer must now recognize, especially in light of the recent elections. None of this is to imply that more problems do not remain.

Professor Robert Scalapino, who we are proud and privileged to have with us today, along with Professor Gisbert Flanz, will detail for us the major threat facing South Korea when he testifies to the presence of North Korea. We must never forget the dreadful invasion of South Korea and continued capability of the North to mount re

newed aggression. Korea has made constitutionalism work while at the same time creating a powerful defensive military posture.

Because it is in a very real sense under the gun of the Communist threat, its ability to meet the needs of its people during the difficult days has been a model of democratic development.

One of the purposes of these hearings, undertaken before our subcommittee considers the Indochina war, has been to see if there are lessons learned from the Korean experience which could be applied to the on-going tragedies associated with our conflict in Vietnam. We will very carefully review the testimony taken in the last 2 days and I am sure we will receive additional relevant information today relating to our stated goal in Asia: allowing free men to freely choose their government.

Professor Flanz will speak specifically to the development of a viable constitutionalism in Korea and will, I am confident, disclose how democracy has been made to work in Korea.

So, on this final day of the hearings into Korea, there is cause for celebration for those of us who continue to urge responsible American participation in the development of a free Asia. However, we must never forget the lessons of the 1950's nor should we overlook the complexities facing the governments in Asia in the 1970's.

I will now ask Professor Scalapino to present his testimony, and I am sure members of the subcommittee would like to ask questions. Professor. We are indeed delighted to have both of you gentlemen, who have such outstanding credentials, to appear before this subcommittee and speak on Korea. Please proceed, Professor.

STATEMENT OF ROBERT A. SCALAPINO, PROFESSOR OF POLITICAL SCIENCE, UNIVERSITY OF CALIFORNIA, BERKELEY, CALIF.

Mr. SCALAPINO. Thank you very much, Mr. Chairman. I want to express my appreciation for being asked to testify before your subcommittee. It is a great honor.

Among the factors which threaten the peace of East Asia, none is more troublesome than the issues posed by the so-called divided states. Here, I should like to deal briefly with one of those states, namely, the Democratic People's Republic of Korea, to use its official title. This state has already been the initiator of one major war, and over the past decade, it has combined extensive military preparations with an extremely belligerent line politically against the non-Communist world, and particularly against the Republic of Korea, the United States and Japan. It seems important, therefore, to attempt some assessment of the current nature of the North Korean regime, its policies-domestic and foreign-and its probable future course.

Let me begin with a broad and somewhat ominous generalization: North Korea today is one of the most highly militarized, totally mobilized, tightly controlled states in the world. A society of 13 million, it currently has nearly 470,000 men in its armed forces, a people's militia of 1.400.000, and substantial security-police forces in addition. Moreover, almost every adult North Korean, and many youths, belong to one or more mass organizations, each of which, in turn, is closely linked with the Communist Party. That party alone-labeled

the Korean Workers' Party-has a membership of approximately 1,600.000. This represents one of the highest ratios of party membership to total population of any Communist state. In partial explanation, party leaders assert that since the party is destined to govern the entire 40 million Koreans living on the peninsula, it must be sufficient for this task, both in size and in experience.

What is the essence of the North Korean political system? In a number of respects, this state operates as an orthodox Communist polity. A single party wields absolute power. The earlier fiction of united front" politics whereby minor, "democratic" parties were given some representation has been almost completely abandoned as the utility of such parties waned. The Korean Workers' Party, triumphantly stresses its allegiance to Marxism-Leninism, and uses ideology as a central instrument of mass mobilization. It repeatedly calls for the achievement of "steel-like unity" under the banners of a monolithic party, supported by a "unitary ideology," epitomized by the "thought of our great leader Kim Il-song." In a broader sense, the regime displays the same range of coercive and persuasive techniques that has come to be associated with the Communist system elsewhere. Important variations, to be sure, exist, stemming from the particular political culture of this society. The range goes from police-state tactics, intense criticism sessions, and periodic reassessments of one's class background and party character to lifelong political education, the extensive use of pageantry for purposes of state, and important rewards economic and political-for those who make "positive" contributions. In sum, this is a system in which punishments and rewards are clearly and sharply delineated so that the masses can choose "the correct path" without difficulty. Finally, in the economic sphere, the system is characterized by a command economy, its basic goals and structure drawn initially from the Soviet model, with later modifications undertaken as the occasion demanded.

To depict the North Korean political system in this general fashion, however, is to overlook or obscure those special qualities that are necessary to a fuller understanding of its policies and political style. Let me first refer specifically to the character of political leadership. The DPRK is currently governed by old guerrillas, namely, by men who participated in the Manchuria-based anti-Japanese partisan movement during the 1930's, and most of whom retreated into the Soviet Union under Japanese pressure about 1941, subsequently returning to Korea with the Red Army at the close of World War II. These partisans numbered only in the hundreds, but those who have survived the travails of the last 30 years currently occupy key positions in the party and state.

A profile of the senior North Korean leader today might be drawn as follows: he was born in North or South Hamgyong Province or in eastern Manchuria; he is now in his late 50's or early 60's; his background is rural or quasi-rural, and he is of peasant or lower middle class origins; his formal education is limited, generally not more than elementary or some middle school training; in his earlier years, his contact with Chinese or Russians was fairly extensive, and he may use one or both of these languages; otherwise, his contacts with the outer world have been extremely limited, except for his special rela