Against a serious backdrop of an internal Korean scandal, Secretary of State Alexander Haig last night hosted a grand reception commemorating the 100th anniversary of U.S.-Korea diplomatic relations.

Thursday South Korean President Chun Doo Hwan dismissed half his cabinet in a multimillion-dollar loan fiasco that has shaken the nation's economy amid rumors of high-level political involvement. On Thursday, the entire cabinet tendered their resignations to take broad responsibility for the national disgrace.

"We cannot trust North Korea in a situation like this. They could see that things are not good and very easily attack us," said Shin Jin-Soo, a member of the main opposition party, the Democratic Korean Party, and part of the official delegation to the United States.

"I hope he Chun Doo Hwan is not involved," said Shin. Members of Chun's family, a brother-in-law and his wife's uncle (who was arrested), have already been linked with the scandal.

"Chun will come out stronger by taking this action--even against his family," predicted Kim Se-Jin, the president's consul general in New York. "This will strengthen and legitimize him as a political leader . . . This whole thing could be a blessing in disguise because the country will take actions to normalize the stock markets so that this would not happen again."

Park Tong-jin, chairman of the Korean Assembly's Foreign Affairs Committee, dismissed the scandal as "something that happens from time to time."

"The ministers were not involved but Orientals always take full responsibility for what goes wrong," said Park. "The public expects it."

For the most part, though, the several hundred guests at last night's party at the State Department put aside internal Korean problems in favor of singing the praises of peaceful international relations. Ladies in elegant silk native Korean dress roamed under the shimmering chandeliers, nibbling delicate bites of shrimp.

"Korea is the closest friend of the U.S.," said Korean-born Samuel Moak of Richmond, who came to Washington for yesterday's festivities, which also included a parade at Fort Myer. "When it came time to help the U.S. in Vietnam, we went to war. Not many other countries would do that."

Haig called Korean support of that war "something we will never forget."

And State Department Korea desk officer Bob Richmond summed up the last 100 years: "Korea is one of the few shining diplomatic successes we have had."