BUSINESS ABROAD: Korean Rebuilding

On a shaky wooden table outside his shop on Seoul’s crowded South Gate Road last week, a gold-toothed leather craftsman tacked a crudely lettered sign: “Be-cus no more fight, no more gun holster but al kine camera bag.” Throughout war-torn South Korea, from the open-sewered streets of Pusan to the rice-rich fields just below the front lines, there were similar signs of economic stirrings.

“Seoul’s crater-pocked streets,” reported TIME Correspondent James Greenfield last week, “are filled with civilian cars and taxis again. Where they suddenly came from, nobody seems to know. Every afternoon Korean businessmen, shabby in their ill-fitting Western suits, gather in places like the Teahouse of the Opening Lotus to discuss Korea’s future. In buildings all over the city, shivering workmen sigh with relief as glass windows go in for the first time in three years. By night, streets are alight with candles as Koreans, with small trays mounted on wooden tripods, offer candy, chewing gum, apples and cigarettes. Said one U.S. economist on the scene: ‘It looks to me as if one half of the Koreans are trying to sell bubble gum and candy to the other half.’ ”

Busy Presses. After the ravages of more than three years of war, it will take more than candy, bubble gum and “al kine camera bag” to supply a decent living standard for South Korea’s 22 million people. In three years, 600,000 homes have been destroyed; because of a high birth rate and the influx of tens of thousands of refugees, 900,000 new or rebuilt houses are needed. Coal production is down 50% from prewar. Grain output, the core of Korea’s economy, is off from 3,500,000 tons to 2,300,000. In a nation whose gross national product is $1.4 billion, property damage is estimated anywhere from $1 billion to $3 billion.

The economy is plagued by runaway inflation. Private credit is rigidly controlled, but the government keeps the printing presses going to supply food and pay to its army of 19 divisions. In six months the money supply has jumped 60%, from 10 to 16 billion whan.*Though the whan is pegged officially at 60 to $1, the going black-market rate is 260 to $1. Retail prices are up 7.200% from 1947 (though the rate of rise has slowed to 2% a month); wholesale prices, under government control, are up 5.600%.

Bricks & Mortar. The American most concerned with Korea’s economic plight is 53-year-old C. (for Clinton) Tyler Wood, a Princeton man, onetime Wall Street broker, State Department aide and now economic coordinator between the U.S., the U.N. and the ROK government. Wood is no economic czar. Says he: “Korea is a sovereign nation and we’ve got to remember that all the time.”

This fiscal year, Ty Wood and his U.N. and Korean counterparts will spend $628 million, more than half of it from the U.S., on Korean reconstruction. Koreans wanted 70% of the money spent on capital goods, but Wood disagreed on the grounds that “if you put all your money into bricks and mortar for factories which will take two or three years to pay off, you’ll have lost the battle against inflation.” Last week Wood won his argument for consumer goods. In the approved budget, $132 million will go for military supplies, $198 million for capital investments, and a whopping $298 million for consumer goods and raw materials to keep prices under control.

Textile Comeback. By a bleak austerity program, Wood and his associates hope to boost Korea’s gross national product from $65 per capita to more than $100 per capita in five years. But the ROK army will be a steady drain on the economy, and some are doubtful that an austerity program will work.

A few prosperous Seoul businessmen are already riding around in new Buicks and Studebakers. Moreover, President Syngman Rhee, anxious for international prestige, has splendiferous plans for an international airline, an ocean-going merchant marine, and several luxury hotels. In a nation which pays its ministers $170 a month and where the average suit costs $125, corruption may siphon off some of the aid funds.

Nevertheless, Tyler Wood is confident that the hard-working Koreans will pull through. The most hopeful sign to date is the comeback of the textile industry, which by working three shifts a day is exceeding prewar output by 20%.

-To curb inflation last February, the government called in the won, replaced it with the whan at the rate of one whan to 100 won.