Implication of Withdrawal of All United States Assistance or Continuing Present United States Policy
The American occupation forces in Korea could not remain in that country if all assistance to South Korea were stopped, since the cessation of all aid would lead to an early economic breakdown and to the outbreak of riots and disorder throughout the United States zone of occupation. The withdrawal of American military forces from Korea would, in turn, result in the occupation of South Korea either by Soviet troops, or, as seems more likely, by the Korean military units trained under Soviet auspices in North Korea. The end result would be the creation of a Soviet satellite Communist regime in all of Korea. A withdrawal of all American assistance with these results would cost the United States an immense loss on moral prestige among the peoples of Asia; it would probably have serious repercussions in Japan and would more easily permit the infiltration of Communist agents into that country; and it would gain for the Soviet Union prestige in Asia which would be particularly important in the peripheral areas bordering the Soviet Union, thus creating opportunities for further Soviet expansion among nations in close proximity to the Soviet Union.
Present American policy provides that, in view of the failure of the United States-Soviet Joint Commission to succeed in implementing the provisions of the Moscow Agreement regarding Korea, the matter be referred to the Four Powers for solution. It also provides that the matter be referred to the General Assembly of the United States in the event of the failure of the Four Powers to solve the Korean problem. This indicates that the United States will continue to seek, by consultation with the powers concerned, a solution of the problem, but a failure to reach an agreement on Korea in the United Nations will require that the United States make a decision regarding its future course in Korea: whether it shall withdraw or whether it shall organize a South Korean Government and under what conditions and whether it shall give economic and military aid to such a government.
A continuation of present American policies will serve to give notice to the Soviet Union and to other nations in the Far East that the United States will not abandon Korea in the face of Soviet intransigence and that the United States will continue to insist upon the fulfillment of the Moscow Agreement regarding Korea.
A continuation of present American policies will serve to deny to the Soviet Union direct or indirect control of all of Korea and prevent her free use of the entire nation as a military base of operations, including the ice-free ports in South Korea.
Appendix F to Part III—Korea
ECONOMIC
South Korea has few resources except agricultural land. This area formerly obtained much of its anthracite, electric power, timber, fertilizer, and other chemical products from North Korea, and bituminous coal and food from Manchuria, but must now obtain these essential items (except electric power) as well as raw materials and repair parts for her industries, from other external sources.
Coal—The whole of Korea, particularly South Korea, lacks coal No bituminous deposits are known and existing coal deposits are of a law-grade anthracite. The coal runs high in ash, and tends to disintegrate to powder. The largest producing mine in South Korea, constituting in fact 50 per cent of the production, is located at Sam Chok on the east coast. Production involves costly rail-sea-rail distribution. This coal can be and is being used in thermal plants by pulverizing and mixing with oil, but its use is costly and maintenance of boiler equipment is heavy. In any case, bituminous coal must be imported for the operation of the railways and most of the industries.
Electric Power—Because of the unfavorable coal situation, South Korea is at the mercy of North Korea with respect to electric power because virtually all of the large hydroelectric installations are in North Korea. In 1945 there was a total of 1,240,000 kilowatts of installed capacity, 90 per cent of it hydroelectric and in North Korea. Some of the capacity in North Korea has been removed by the Russians. At the present time South Korea depends on North Korea sources for 75 per cent of its power requirements in the winter months when stream flow for its hydroelectric plants is low, and 50 per cent to 60 per cent during the rainy summer months. Conditions will be critical during the coming winter. Minimum peak requirements are estimated at 200,000 kilowatts and only 110,000 kilowatts are in sight including the area’s own generating capacity of 60,000 kilowatts—and that only if rehabilitation materials are received—plus 50,000 kilowatts from North Korea, which is all the Russians profess to be able to deliver. If North Korea power were cut off, all industrial production in South Korea would have to be suspended, and remaining locally generated energy rationed for military and emergency use. Any new plants to correct this deficiency or permit any revival of industry would require four to five years to complete, and would still be dependent upon imported coal or oil, or upon a considerable expansion of the low quality anthracite production. There is no reasonable solution to this dilemma other than to unite North and South Korea.