501.BB Korea/4–848: Telegram
The Acting Secretary of State to the Political Adviser in Korea (Jacobs)
112. Reurtel 219 Apr 8 ’48.1 Believe latest draft enabling legislation now being discussed with Congress ensures that economic aid presently contemplated subject to adequate control SecState. Contemplated aid agreement between US and new Korean Govt will provide for discontinuation or modification such aid if in opinion SecState it is not being used effectively or for purposes intended. Complete text latest draft Occupied Areas Act 1948 being sent by pouch. Fol are sections of particular interest Korea:
“Notwithstanding the provisions of any other law, the Reconstruction Finance Corporation is authorized and directed, until such time as an appropriation shall be made for such purposes for occupied areas in Japan, Korea and the Ryukyu Islands, to make advances not to exceed in the aggregate $40,000,000 to carry out the provisions of this act in such manner, at such time, and in such amounts as the President shall determine, and no interest shall be charged on advances made by the Treasury to the Reconstruction Finance Corporation for this purpose. The Reconstruction Finance Corporation shall be repaid without interest from appropriations authorized under this Act for advances made by it hereunder.
Sec. 4. Funds appropriated pursuant to the authority of this Act and unexpended at the time of termination of the occupation by United States, of any areas for which funds are made available under this Act, may be expended by the President for the procurement of such commodities and technical services as he shall determine to be [Page 1180] necessary to assist in the maintenance of the political and economic stability of such area; Provided, That before any such assistance is made available under the provisions of this section, an agreement shall be entered into between the United States and the recognized government or authority as the President may determine to be necessary in order to assure the efficient use of such Assistance in furtherance of the purposes of this section: And Provided Further, That such agreement shall, where applicable, include requirements and undertakings corresponding to the requirements and undertakings specified in sections 5, 6 and 7 of the Foreign Aid Act of 1947 (Public Law 389, Eightieth Congress)”.
- Not printed.↩