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Library of Congress
Report by Vyshinsky to Molotov concerning trade and economic cooperation between the Soviet Union and the United States, August 1941
To Comrade V. M. Molotov
I present for your confirmation:
1. The draft resolution of the USSR Council of People’s Commissars [SNK SSSR] on extending the trade agreement currently in effect between the USSR and the U.S.A. to August 6, 1942.
2. The text of notes which will be exchanged this August 4 in Washington between Umanskii and Welles.
The SNK SSSR resolution and notes which will be exchanged this August 4 in Washington are subject for publication.
In addition to this note on extending the agreement, two other notes will he exchanged:
a) on the U.S.A. rendering economic cooperation to us (with subsequent publication);
b) on the inapplicability for us of discretionary conditions concerning our gold and silver (without publi-cation).
The texts of the last two notes are not yet in our possession.
[handwritten: ] I am also enclosing a draft response to Comrade Umanskii.
[signed] A. Vyshinsky
” ” August 1941
Stalin is a 1992 television film, produced for HBO, starring Robert Duvall portraying Soviet leader Joseph Stalin.
November 27 1958
Obtained for NKIDP from the P.R.C. Foreign Ministry Archives by Gregg Brazinsky and translated for NKIDP by Mengyin Kung. [Document 204-00064-02 (1)]
The document features a conversation between the Chinese and Korean delegates during a luncheon covering the topics of DPRK’s industrial and agricultural development, the state of South Korea’s military, the recent Japanese-American Security Treaty, and recent contact between North and South Korea. The conversation continued after the luncheon, additionally covering: electricity, steel, cotton, and sugar production; political organization; military; the 5-year plan; South Korea; US military involvement in socialist states; the Soviet Union; Japan; Taiwan; the Socialist camp; Chinese volunteer troops in Korea; and Vietnam.
Prime Minister Kim Il Sung (right) of Communist North Korea and Chinese Premier Zhou Enlai wave to crowds after arriving in Beijing on a state visit.
Time: 1:00 PM, 27 November 1958
Location: Xihua Hall
[Delegates from] China: Deputy Premier Peng Dehuai, Deputy Premier Premier He Long, Deputy Premier Chen Yi, Deputy Minister Zhang Wentian, Ambassador Qiao Xiaoguang.
[Delegates from] Korea: Prime Minister Kim Il-Sung, Deputy Chairman Pak Jeongae, Deputy Prime Minister and Foreign Minister Nam Il, Minister of National Defense Kim Gwangrae, Minister of Education and Culture Li Yeongho, Ambassador Li Ilgyeong
|Interpreter: Jiang LongqiuNote taker: Wang Shikun[North Korean] Prime Minister Kim Il-Sung and the Korean delegation paid [PRC] Premier Zhou Enlai a visit the day they arrived in Beijing. Zhou invited the delegation to a luncheon in Xihua Hall [of the Zhongnanhai]. During the lunch, Premier [Zhou] asked about the development of the industrial and agricultural sectors in Korea. Prime Minister Kim Il-Sung gave a brief introduction on the situation of Korea’s food, steel, and electrical sectors this year.
Deputy Premier Peng Dehuai asked about the production in South Korea and whether there were exports. Prime Minister Kim said that parts of rice in South Korea were exported to Japan. He said that [the fundamental environment] in South Korea was not good and had not recovered after the destruction [of war]. Most of the goods and materials were imported from the United States. People could not even afford to buy some basic commodities in the market.
Deputy Premier Peng asked if there was any production of ammunition in South Korea. General Kim Gwangrae said that recently South Korea was preparing to build some arsenals in Busan which would produce bullets, grenades, etc. [He was not sure] if [the arsenals] were built or not. He said there were 700,000 soldiers in [South Korean President] Rhee Syngman’s standing army, so South Korea spent a big portion of its budget on military.
Premier Zhou mentioned the recently-signed Japanese-American Security Treaty by the Nobusuke Kishi government. He said [the treaty] was to misguide Japanese people. It was meant to follow West Germany, to restore Japan’s militarism, re-militarize Japan. But Japanese people suffered from the war; they were the first ones ever suffered from the damage of atomic bombs. Therefore, Japan’s socialist party and Japanese people disagreed with Kishi’s plan, which was a good thing. Premier [Zhao] asked Prime Minister Kim his opinion on this issue. Kim said that the United States and the Kishi administrations’ plan could never come to fruition. Although they linked everything up now, it would eventually fall apart. It is fundamentally flawed; their way would only cause everything to go in the opposite direction. It would educate Japanese people. Recently, Deputy Premier Chen Yi made a statement regarding Kishi’s plan; Japanese people welcomed and supported [the statement]. Foreign Minister Nam Il said, “We issued an editorial the day after reading Chen Yi’s statement. We welcomed Chen’s statement.”
Deputy Premier Peng asked whether fishermen in the south crossed the “38th parallel” recently. Kim said that in the spring, there were nine ships, around 40 people. “We invited them to visit the north, and helped them catch many fish, filled their ships, and let them go. They had a favorable impression.” Kim said, “Not only that, some journalists from the south liked to listen about construction in the north. Recently we organized a meeting in Panmunjom for journalists from the north and the south. Our journalists gave them some documents. They were very happy and brought those back. Panmunjom thus became a place [for both sides] to meet.” Premier, Deputy Premier Peng, Deputy Premier Chen Yi all praised this arrangement and thought this was good.
[All the delegates] also talked about some other daily life issues. The conversation continued after the luncheon.
Premier [Zhou]: Hocus pocus—this is what our country is trying to destroy—superficial beliefs. We are mobilizing people to do this. We are doing a general survey of radioactive substances in the country. We distributed 2,000 plus detectors around the country, to 20,000 plus communes to let people do it. We will keep secret the location of those places where there is a lot [of the radioactive substances], and publicize those places where there is little. [Developing] industry is not something mysterious; everyone can do it. I have some words to say: let all people develop industry; yet it is not easy. On the one hand, let everyone develop industry, but [at the same time] there need to be larger scale collective efforts. This is how we combine popularity and collectivity together.
Prime Minister Kim: This year, we’ve seen the results of China’s Great Leap Forward that destroyed superficial beliefs, as well as your success in developing handicraft industry and small-scale industry. We now have around 1,000 small-scale enterprises. Because of labor shortages, we cannot do it on a larger scale, but can only do it at county level. [We] mobilized the family members of staff to do more light industry, food industry, and daily life product industry, such as pottery and porcelain as well as cement. It is the same in the countryside. It is beneficial that farmers take advantage of their fallow time to develop steel industry. Farmers are highly motivated.
Premier: That is [true] because this helps increase production.
Kim: By doing this, it is also convenient to do irrigation work in the countryside. We’ve already constructed some small-scale hydroelectric plants. It is estimated that by next year, the electrification will be completed. Presently in Korea 36% of the countryside is still without electricity.
Premier: Your electrification development is way ahead of us.
Kim: Small-scale power plants are easy, as long as there are brooks.
Premier: That is good, walking with your own two legs [being practical]. Or else once large power plants fail, the whole countryside will be affected.
Kim: Small-scale plants are all independent.
Premier: How much of an increase will there be next year?
Kim: The Tokro River [one of the tributaries of the Yalu River/Amnok River] Hydroelectric Power Plant [which is in Kanggye, the provincial capital of Chagang, N. Korea] will be completed by next year. [There will be an] 80,000 kilowatt [increase]. [We are] recovering thermal power plants in several places; [we can increase the power generation] to 10 billion kWh by next year. [We need to] increase 8.9 billion kWh this year. Our goal is 20 billion kWh.
Premier: 20 billion kWh distributed according to the population, every ten people can have 100,000 kWh of electricity.
Deputy Premier Peng: Based on our situation, that is quite a high figure. Based on the situation in Western Europe, more is needed.
Premier: We haven’t reached 30 billion kWh this year. [We can] have 80 billion kWh next year.
Kim: We have shortcomings in terms of developing animal husbandry and cooking oil. Now we have to develop animal husbandry and vegetable cooking oil. People’s living standards continue to increase. They need not only food but also good food.
Premier: Did you have droughts this year?
Kim: Many. Very little water is left in the reservoirs. Hydroelectric plants did not have enough water [to operate]. We had very little rain this year. Elders say that this is the first time in a hundred years. According the forecast, we will have more rain next year. We are promoting energy conservation. [People are] used to wasting [electricity].
Premier: We saw that there were many lights without switches in Korea.
Kim: There were some lights that burnt coal. Now they are all gone.
Premier: Your steel production should follow [the electricity production] too.
Kim: It is estimated that iron production will reach 1 million tons next year (we have 450,000 metric tons [one metric ton equals to 1,000 kilograms] this year), and steel production 650,000 to 700,000 metric tons (now it’s 400,000 metric tons).
Premier: [Steel production] can reach 1 million tons the year after next year?
Premier: 1 million metric tons of steel means one ton of steel for every ten people. We need to have 60 million metric tons of steel to attain that ratio. You are ahead of us, which is very good. Isn’t it great to reach the goals of socialism? (Premier turned to Comrade Pak Jeongae) Comrade Pak Jeongae, you surpassed us very quickly. We are very pleased and should congratulate you.
Pak (smiled and nodded)
Kim: With your help.
Premier and Deputy Premier Peng: Mainly on your own, through your own efforts.
Peng: You’ve got many advantages–transportation, power, raw materials, minerals, and so on.
Premier: How about cotton this year?
Kim: Still very little; [we] mainly depend on you and the Soviets. The government purchased 50,000 metric tons of unginned cotton.
Premier: 50,000 metric tons of unginned cotton and 17,000 metric tons of ginned cotton will be 34 million catties [a catty is approximate 600 grams]—that is more than 300,000 piculs [one picul equals to 100 catties].
Kim: We have good harvest of cotton this year due to good weather. Plus we used nutrition pots that shortened one month of the growing period of cotton. We plan to plant more cotton next year. The production of flax this year is good as well—one field yielded one metric ton.
Premier: Your nutrition pots were successful. [It is] good for your weather since you have shorter frost-free period. Korean people are used to physical labor. We also mobilize women now. You have enough material for producing paper. Do you have enough material for sugar?
Kim: We had some wrong beliefs in terms of producing sugar. Last year our [people] who were in charge of light industry visited China and decided that we could have more beets next year, to produce sugar with indigenous methods. It could be successful. We can have 20,000 metric tons [of sugar] plus 10,000 metric tons imported. Koreans don’t like drinking tea and coffee that much. We are used to drinking water.
Premier: You can grow some tea in your mountains.
Kim: We have no plan for now. According to ancient records, there was tea in the southern part of Korea, from the seeds brought from China. Which one is better for sugar production: Sugarcanes or sugar-beets?
Premier: Certainly sugarcanes are better. Sugar-beets get go bad easily. However you have a short frost-free period, so it’s probably not easy to extract sugar from sugarcanes. It’s faster to get sugar from sugar-beets.
Kim: We had some sugar-beets in the Japanese-occupation period. Some problems occurred, so we gave up. We grew some sugar-beets this year. It doesn’t look bad.
Premier: How’s the recovery of your handicraft industry?
Kim: We’ve recovered 900 small workshops, and some 700 to 800 cooperative groups.
Premier: How many agricultural cooperatives?
Kim: 3,873 after merging “li” and “groups.”
Premier: You eliminated one [administrative] organ, right?
Kim: We used to have “classes” above “li.” We eliminated “[administrative] organs,” so now there are only four levels.
Premier: It’s better to have it simplified. How many counties do you have?
Kim: 200 counties.
Premier: How many provinces?
Kim: Nine provinces.
Premier: How many staff member do you have in administrative agencies?
Kim: 16,000 people, not including teaching and administrative staff.
Premier: How many are there in the teaching and administrative staff?
Kim: Around 70,000 to 80,000. After downsizing, we have the smallest ratio of government workers and total population among all nations.
Premier: After downsizing, we have 1.3 to 1.4 million government workers in central and local government agencies. You have fewer people in the central government; we have more people and more cities. We have five levels from the central government to “towns,” [xiang, township/country/village] as opposed to your four levels from the central government to “li.”
Kim: We merged “li” and “groups,” which cut down 7,000 people in the staff.
Premier: That is a good idea.
Kim: We also merged supply and marketing cooperatives into li, which cut down some 10,000 people.
Premier: Are these people taken care of by the cooperatives?
Kim: We are still trying it out. The central government still provides [for these peoples’ livings].
Premier: The cadres we demoted are still paid with salaries. The cooperatives would be overwhelmed to shoulder such a burden suddenly.
Kim: Our cooperatives provide [for workers’ living.] We haven’t yet handed schools over to cooperatives.
Premier: How many troops do you have now?
Kim: 300,000 troops. Troops are more [than government workers].
(One paragraph screened.)
Premier: You have a huge burden. [Having] 300,000 troops is because you are facing different circumstances. How many workers do you have?
Kim: Workers and staff are 1.1 million.
Premier: That’s a good ratio.
Deputy Premier Peng: The industrial and agricultural output values in Korea are higher than ours.
Premier: What are the industrial and agricultural output values that you announced?
Kim: The ratio of industry to agriculture is 70%. I don’t remember the exact number.
Premier: You sped up your industrialization, electrification, and mechanization.
Kim: We have 30,000 truck tractors. 15,000 cars will be fine.
Premier: We are experimenting in farming with electrical tractors in Guangdong. You can pay a visit there. When [King] Sihanouk [of Cambodia] came to China, he visited the one in Tianjin. It wasn’t that good at that time. [Electrical tractors] save oil and steel, and are not heavy. How many years did you shorten your scheduled date of fulfilling your five-year plan?
Kim: We will fulfill it next year (two years earlier), but we announced that it would be finished a year and a half earlier than scheduled.
Premier: We can finish our five-year plan this year. You have many advantages, which is totally different from the situation in the two Germanys. [As long as] your peoples’ living standard continues to improve, people in the south will move [to the north].
(One paragraph screened.)
Kim: Our slogan is “fight for another two years.” China has fought for three years.
Premier: To better your infrastructure to influence [the situation with the south]. Who will take over after Rhee Syngman?
Kim: Yi Gibung. He is a parliamentarian, but very old.
Premier: There are only old people left in the south. Their ambassador to Taiwan, Kim Hong-Il, is he a cadre of Rhee’s?
Kim: He emerged from the Manchukuo government.
Nam Il: He does not come from Rhee’s direct faction.
Premier: Is there any possibility that he will take over from Rhee?
Kim: [Rhee] does not have a high prestige in Korea. Yi Gibung probably has more prestige [than Rhee].
Premier: There will be chaos wherever Americans set fire. Like in Iraq.
Deputy Premier Chen: It was difficult to know beforehand that there would be coup in Sudan.
Premier: Armed coups crop up everywhere in Asia and Africa. There are armed riots in Indonesia; there were coups in North Africa, Algeria, Sudan and Egypt; the same in Iraq, Jordan, Ceylon, Pakistan and Burma. Although U Nu said he stepped down himself, he was actually [overthrown] in a coup. The same in Thailand. There have been two [coups] in South Vietnam, but they were suppressed. Coups are everywhere. The backyard of the United States, the Latin America, is facing the same situation. The U.S. supports military coups everywhere, sets fire everywhere, and therefore it’s inevitable that nationalist states fight. There could be changes in southern Korea, because they depend on military, not people, and there will always be people who oppose them. We can categorize the examples we have. First is Iraq, a good example. [Iraqis] had a thorough revolution, leaving Americans with no proxy to support and had to recognize Iraq. The second example is Indonesia. The U.S. supported the rebels in the beginning, but in the end had to recognize Sukarno as he insisted on fighting the rebels. The third example is in Lebanon, the U.S. withdrew eventually, leaving a bad reputation. The fourth example is in Latin America, the U.S. attempted to conduct a conspiracy in Argentina, but failed eventually. All these are armed coups, either revolutions or counter-revolutions. Now that the U.S. has shown its failure in several places, which was concluded in the recent election in the U.S., Dulles’ brinkmanship policy was defeated. To the socialist camp, [the U.S.] is on the defensive. Of course, if there is any conflict among us, they will definitely exploit it. As long as we are united, they can never defeat us. Hungary is a good example, and so is Taiwan. We insist on fighting, they will reconsider [their strategy]. The situation in Quemoy and Matsu also accounts for the U.S.’s defensive strategy.
We leaders in the socialist camp have to build our countries. The stronger we are, the more chaotic it will be in the capitalist world. They don’t recognize us now? That’s good. (Smiles at Deputy Premier Chen) Then we have less to do, less trouble.
Deputy Premier Chen: Then I am going to “lose my job.”
(One paragraph screened.)
[Unknown]: Now while they think the situation in Taiwan is somewhat pacified, they are having conflict in the west again. France wants to have a trade union with Italy, the Netherlands, Belgium, Luxembourg and West Germany against Britain. The British are furious. It’s good to have [Charles] DeGulle as president, so that there is no harmony among them.
Deputy Premier Peng: The U.S. exposes their weaknesses the most in Korea.
Premier: Now [U.S. power] is declining. In another ten years, [our power] could be considerable.
Deputy Premier Peng: [We] improve a bit each year; then it will be considerable.
Premier: You are doing better than us. You eliminated illiteracy; you learned new technology fast. The Soviet Union is making efforts to build their nation. [The Soviet Union] is the big brother, with a strong foundation. We don’t [have a strong foundation yet]. We learn fast, but that’s not enough. You are better, at least you eliminated illiteracy.
Kim: According to the situation in northern Korea, I think we only need another 3.5 million tons of steel.
Premier: In another ten years, everything in the socialist camp can surpass imperialist states. Or at least [our] major things have to surpass theirs.
Kim: We think so, too. It will have a great impact on southern Korea that we successfully finish our ten-year construction plan. Then, it is possible to reunite Korea peacefully. As long as you can pin down Americans (the interpreter did not hear this line and did not translate it.)
Premier: The situation will be different in southern Korea by then. Taiwan, for instance, if Chiang Kai-shek or his agent pronounced to reunite with the mother land, the U.S. could do nothing. I’m saying that the fortress can be penetrated from the inside. External factors can influence internal ones, and then internal factors will work themselves out.
Deputy Premier Peng: How many Koreans are there in Japan?
Kim: 600,000 people. According to Japanese statics, 400,000 requested to come back to northern Korea. After the armistice, they requested to come back, but our condition was too dire to welcome them back. Now we can receive them again. Nam Il has made several statements in relation to this. The Japanese government did not give an official response. It is the association of Koreans in Japan that is leading the people’s movement in Korea. [The association] leads the overseas Koreans to urge the Japanese government to give work authorization and leads petition movements. Japanese people also set up organizations to help Koreans to come back to Korea (including Hatoyama in the Japan Socialist Party). From the perspective of Japanese people, they wish Koreans could go home because they are also having a hard time making ends meet. The problem here is the fact that these people request to go back to northern Korea which affects “Japan-Korea talks.” The Japanese government is in an awkward position. The Foreign Minister’s statement was sent to the Japanese government through the Japanese Embassy in the Soviet Union. However, the Japanese government sent the statement back to us three days after they received it.
Nam Il: The Japanese said it was a hot potato.
Premier: Did the Japanese merchant ships come?
Kim: Boats came stealthily.
Premier: As long as they have the will to come back, there will be a way. Just take their time.
Kim: We are not planning on bringing them back soon, either. We prepare for a long fight. First we ask the Japanese government to arrange those people’s lives, give them jobs. As long as [the Koreans in Japan] can fight, their dream will come true.
Premier: The longer they stay suppressed in Japan, the stronger their will to fight Japanese and Americans. Thus, [Japanese] actually are training these people for us.
Kim: It is also a good way to influence public opinion in southern Korea. We are taking care of those Koreans in Japan while the government in the south is doing nothing. People in the south said, “Only the Republic cares about us and solves our problems.” Each year we budget 130 to 140 million Japanese yen for education for the Koreans in Japan. It’s been three years.
Premier: How do you send the money?
Kim: Through banks.
Premier: Japanese don’t oppose it?
Kim: They did not oppose it. This actually helps relieve some of their difficulties.
Premier: Do you, the Korea Workers’ Party, have any opinion on our way of dealing with the Taiwan issue? Can you understand [our methods]?
Kim: We fully support China’s methods.
Park: Fully support.
Premier: Our Minister of Defense has issued a proclamation four times.
Kim: Chiang Kai-shek did not respond?
Premier: They don’t dare to respond now. The U.S.-Chiang contradiction is still developing, though.
Deputy Premier Peng: They said the proclamations were to instigate the U.S.-Chiang relations.
Deputy Premier Chen: We were instigating their relations.
Kim: If we don’t let Americans go, they are to be blamed.
Premier: You understand the proclamation, but some of the western comrades don’t. It’s hard to translate. But Chiang Kai-shek understands, and Americans are beginning to understand. Dulles understands, too. His recent speech at the U.S. national church committee seems like responding to Chairman Mao’s “paper tiger” statement. He said that the free world has strengthened; the socialist camp will undergo some changes. He is putting his hope in us, in that there will be contradiction in the socialist camp. That means, so far, he has no other way to deal with us; it also means that he does not dare to fight. Once we strengthen our unity, his dream will be shattered. He also says that freedom is not reliable, is empty. He says that freedom can not help stabilize Asian and African countries. It needs economic aid, needs money. Therefore, he wants those Christians to do some ideological work for him. He wants them to persuade capitalists not to be extravagant but to invest in Asian and African countries.
Deputy Premier Peng: The production in Britain has reduced 20%, 25% in the U.S. It has also reduced in France and in Japan.
Premier: Their world has shrunken and they still can’t cooperate [with each other]. [There is also an] economic crisis and multiple contradictions.
Kim: Premier Zhou is right. We need to earn time to build ourselves.
(Several paragraphs screened)
[Premier:] Your construction has gone quite well. We are pleased. You showed such a warm welcome when the volunteer troops returned home. I wondered whether that probably disturbed your schedule [of construction].
Kim: It was our obligation to send off the volunteer troops when they left Korea. They bled for Korea and rendered so many achievements. It was also an education to Korean people, as well as an influence to politics outside [Korea], contradicted the rumor that Korean people did not welcome the volunteer troops. Yet we did not do it formal enough.
Premier: That was formal enough. Guo [Moruo] came back from Korea and composed more poems than we can cover [in this conversation].
Kim: When the volunteer troops left Korea, almost every Korean cried. It’s people’s affection. I am grateful for your appreciation of our construction. It’s an encouragement to us.
Premier: Your [situation] is not easy, either.
Kim: Finally, I would like to mention that when Deputy Prime Minister Li Juyeon and Comrade Li Chong-ok visited China last time, we already solved the issues of long-term trade and loan. We are very pleased and would like to express our appreciation.
Premier: We had limited power and did only very little.
Kim: We are very content. The Standing Committee listened to the report from Comrade Li Juyeon and was very content with it.
Premier: We will be able to help more once our construction improves. Everyone minds his own construction of socialism and we will all be pleased. After you come back from Vietnam, should we issue a communiqué?
Kim, Pak Jeongae and Nam Il said that they were willing to issue a communiqué at the same time.
Premier: That is good. We can assign this to the two foreign ministers. They can assign it to others and we don’t have to worry about it.
Kim: Our military delegation does not have many things on the agenda this time. We used to contact the volunteer troops when they were [in Korea]. Now that the volunteer troops have returned, we need to talk about how to maintain contact in the future. Another thing is about mutual learning and military education. I hope that Minister Peng Dehuai will be able to help.
Premier: That’s good. He (Peng Dehuai) was in the liberation army as well as the volunteer troops.
Deputy Premier Peng: The military delegation can see whatever they wish to see. We have no secrets to keep from a fraternal country.
Kim: The Vietnamese delegation brought a military group last time it visited Korea. The Korean military delegation will come with us to Vietnam this time. They may not come back with the government delegates when we come back from Vietnam. They could stay longer in China, visit more places.
Premier: That’s good. The Foreign Affairs Office of the Ministry of Defense will communicate with them about the details of the itinerary of the military delegation.