The Radio Business
"So. This time we mean to launch a radio distribution program in Korea."
The words were exactly what Ki-jo had expected, and they came out of Frank's mouth.
"We're thinking of putting the project in your hands, Mr. Lee. What do you say?"
Damn it. Ki-jo swallowed the groan.
This was not the first time the United States had tried to put radios into Korean hands. From the days of the American military government onward, Washington had labored to spread them, convinced that broadcasting was an effective instrument of propaganda for propping up an anti-communist, pro-American regime.
The result had been failure. A receiver cost more than ordinary Koreans could pay, and there was no station powerful enough to throw a signal across the whole country. That was why the first distribution drive collapsed.
The second came during the Korean War. To wage psychological warfare and propaganda, the Americans imported cheap sets from Japan and handed them out free of charge. That, too, fell short. The power shortage was desperate; there was simply no electricity to run a radio. Rolling blackouts arrived as regularly as meals, and a cord in the outlet changed nothing—the set stayed dead. As a last resort they bought and distributed receivers that ran on direct current, only to find there were no batteries. The second radio drive failed just as thoroughly.
Even after the war, ownership remained wretched. Before his return he had looked the figures up: in 1954 the whole of the Republic of Korea held roughly forty-five thousand receivers, and about four hundred thousand listeners. The statistics concealed a trap. American soldiers who owned radios were counted in the total, so Koreans with a set of their own were fewer still. Broadcast in Korea, and Americans would do more of the listening than Koreans. In a place like Busan, Japanese signals came in more clearly than anything from home.
And in the middle of this, they want to try radio distribution again. Is that it? And they mean to put it on me?
The third drive would begin two years from now, in 1956, and would not bear fruit until around 1960. It hardly needed saying. Radio ownership rose in step with the strength of the Korean economy, and a program launched now stood a strong chance of failing. The obstacle was price. Outside the wealthy, no one could afford a receiver.
Ki-jo cast back through his memory. Radio had begun to win a real popular following only around 1956, when a radio drama called Blue Thread, Red Thread became a sensation—its theme song swept the country, and a film was even made of it. It was the same season KBS boasted of installing a hundred-kilowatt transmitter, and the season a handful of coal-fired plants, raised with FOA funds, eased the shortage of power. Only after that ground had been laid did sets begin to spread, and even then there was no Korean-made radio. Every one of them was imported.
They were trying to hand him a project that was certain to fail.
"Seeing that President Lee has been selecting students for Harvard, I take it you have an interest in electronics. This comes at a fortunate moment. You may begin at once."
Blind to the churn behind Ki-jo's silence, the director of the United States Information Service said it while indicating the papers Ki-jo had submitted. Ki-jo found he had folded his arms.
Manufacturing radios and getting them into people's hands was no small undertaking. If he simply resolved to squeeze as much American money from the thing as he could, he might have accepted on the spot. Import the parts, assemble the sets, sell them, and when distribution failed, plead that conditions in Korea were unsuited to it. Along the way he could quietly skim a portion of the dollars paid out as project funds. But theft of that kind had never suited him.
When Ki-jo held his silence, Frank spoke.
"Bring this one off, and I'll see that your company can draw on a share of the counterpart funds."
Counterpart funds. A portion of the proceeds the Korean government earned by selling American aid goods at public auction. Five percent of those proceeds was deposited with the Bank of Korea, and the deposits could not be used without American approval.
Frank was holding the funds out like a carrot, with the look of a man who expected terms like these to settle the matter. Ki-jo's face did not brighten.
Drawing on the counterpart funds is no different from drinking poison.
The problem was the Korean government. It regarded the money America had forced into deposits at the Bank of Korea as its own. If the aid was meant to be free, then give it freely—why pile the money up in a fund and then forbid them to spend it as they pleased? That was the government's basic view. Later, when the counterpart funds had mounted to astronomical sums, Seoul would try to spend them where it wished and clash with Washington. America would insist they be used as the contract required, and only with American permission. Korea would demand to know why money given as a grant was now being treated as if it had been extended on credit.
And they wanted him to take that money and use it? The Americans understood Koreans far too little. They were lightly courting the government's hatred—the kind that tells a man to take the money and go die of it.
Ha... what am I supposed to do with this...
He was thrown, but he set his principles quickly.
As things stand, a radio distribution program will be hard to make succeed. But I can't refuse it, either. That could turn Frank against me. And the counterpart funds—those I must not accept. Not under any circumstances.
With his principles fixed, he ordered his thoughts. The U.S. Information Service wanted radios produced in Korea and sold cheap, because the Korean government had classified them as luxury goods and laid crushing tariffs on imported sets. Imported components, though, carried heavy duties of their own. Bring the parts in from abroad and assemble them here, and the price still would not come down. In the history he remembered, a single domestically assembled radio built from imported parts had cost more than ten thousand hwan. Those early Korean sets had no competitive edge, and they did not sell.
I have to come at this differently from last time.
His mind made up, Ki-jo unfolded his arms and answered.
"Very well. I'll do it. But I won't take the counterpart funds."
At his acceptance the director and the broadcast officer smiled. Frank only looked at him strangely.
"You won't take the counterpart funds?"
There was a challenge in the way Frank asked it. Ki-jo nodded without a word.
"Then you want some other compensation?"
"No. I don't need compensation. Help me a little, instead."
"Help you with what, exactly?"
"Arrange for me to take subcontract work from RCA."
"...RCA?"
"Yes. I mean to establish Cheongsan Electronics. I'd ask you to see that we can become a subcontract manufacturer of radios for RCA."
RCA, the Radio Corporation of America, was in those years the greatest radio company in the United States. It had begun as the broadcasting division of GE, General Electric, and once it monopolized both radio broadcasting and the manufacture of receivers inside the country, the American government split it off from GE under the antitrust laws. It held the vacuum-tube patents, and NBC, America's famous network, belonged to RCA. It developed the nation's first black-and-white television and its first color set, and went on to electron microscopes, the LED, the LCD, CMOS, and satellite broadcasting—an immense enterprise that led the electronics of the modern age.
This time it was Frank who folded his arms. He was frankly incredulous.
Is Lee Ki-jo doing this because he doesn't want the radio job? How can he ask me for something this difficult...?
Frank had already taken him for a man not easily handled. He had not thought him this reckless.
"Mr. Lee, can you tell me what makes you think RCA would subcontract radio production to a Korean company?"
At the question Ki-jo smiled, just slightly. Typical of Frank. Whatever he didn't understand, he asked on the spot—direct as ever. Skeptical by temperament, yes, but give him a logical account and he knew how to listen, and how to judge whether a thing might work. Slowly, Ki-jo set about persuading him.
"Do you know which company's radios are the most widely spread in Korea right now?"
"Zenith," said John Curtis, the broadcast officer, answering in the others' place.
"I'd expect you to know, in your line of work. They sell briskly at the Army PX and on the black market. For well-off Koreans, setting a hundred-dollar Zenith in the house is something to boast about."
Frank looked at John as if to ask whether that was true. John nodded.
"As I understand it, RCA is the leading radio manufacturer in America. Don't Americans put RCA at the top of the list, and buy a Zenith only when the price or the design doesn't suit them?"
"That's right," Frank said.
"Then please invite someone from RCA's Japan branch to Korea. I'll handle the rest."
"So let me see if I have this. You'll show them Zenith selling well in Korea, get under RCA's skin, and have them build an OEM plant here. Is that what you're saying?"
"The worst I can do is break even. It's worth a try."
At that, the three Americans seated on the sofa in front of him let out a thin, disbelieving laugh.
"You think it'll work? You're confident?" Frank asked.
"Can rivalry alone move a company? I'll try to persuade the people at RCA myself. RCA is a business. They won't invest unless the Korean market looks attractive."
"And what do you intend to say to them?"
Ki-jo grinned. "I'll go home tonight and think it over."
The strength went out of Frank all at once. What kind of gall is this? The trust he had built up in Ki-jo felt as if it were giving way beneath him.
Frank was not a man who trusted people readily, and years in intelligence work had made him careful in his judgments of them. This time, though, he felt Ki-jo had truly crossed the line. What enticing proposal was a Korean brickmaker supposed to lay before an American giant?
He decided to hold the joint radio project in abeyance, and he brought the conversation to a close. He did promise, all the same, to have an RCA man brought to Korea through the embassy in Tokyo.
The moment Ki-jo left the director's office, the three Americans took up the radio program again where they sat.
"I thought if we pressed the counterpart funds on him, he'd snatch at them. I didn't expect him to refuse."
James Stewart, director of the United States Information Service, said it with a cigarette at his lips.
"Even so, his strategy was interesting—showing them how popular Zenith is in Korea, and drawing RCA in that way."
John Curtis, the broadcast officer, said.
"Lee Ki-jo has real ability. No shortage of ingenious ideas, either. But this time I'm disappointed myself."
Frank sighed as he said it.
"What do you intend to do?" James asked.
"Plan A looks hopeless. We go to Plan B."
"Plan B?"
"Yes. I've already had an eye on another firm. A company called Cheonusa has started into the radio business."
"Oh? They have?"
"For the moment they're bringing parts in a little at a time, assembling sets, and testing whether they can actually produce them."
"Well, that's something. Is it a company with prospects?"
"Better, I think, to choose a company that badly needs the counterpart funds than one with prospects. They can't raise cash the way Cheongsan Development can, but they have the will to manufacture radios in quantity."
"Offer them the funds, and they'll accept the proposal just to build a plant."
"Even so, I'll watch what Mr. Lee does, and then I'll decide."
Frank had resolved to give Ki-jo one last chance. He had not abandoned his hope in the man altogether. Look at the run of things already behind him: more than once, Ki-jo had made the seemingly impossible real. If he brought this off as well, Frank meant to back the MSG plant he had spoken of.
This project was to be the final test of Lee Ki-jo.