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You are correct. America lost its one great opportunity to get this hostages vs nation bit correct with the Pueblo. We should have sent this message to North Korea:
"The USS Pueblo, is sovereign United States Territory. Its crew are United States military men who have sworn to give their lives for their country.The United States of America values its sovereignty over the lives of hostages. We will not negotiate.
You have eight hours to return our ship, its crew, (having suffered no further harm) and everything that was on our ship -- back to international waters -- and remove all your personnel from it.
If the Pueblo is still in Wonsan harbor after eight hours has passed, we will sink it ourselves -- with the largest hydrogen bomb in our arsenal.
We will also drop another such weapon on Pyongyang.
The clock has started...
There is at least a .99 probability that the North Koreans would have complied.
Either way, that would have been the end of capturing American vessels and planes and their crews -- by anyone...
I like the way you think.