895.6463/4–2448
The Assistant Secretary of State for Occupied Areas (Saltzman) to the Under Secretary of the Army (Draper)
My Dear Mr. Draper: Recent reports from General Hodge indicate that the Soviets have resisted attempts by the theater to settle the power agreement, and acting through the medium of the North Korean Peoples Committee, they may attempt a power cutoff prior to or coincident with the establishment of the new Korean Government. The statement is made in Seoul’s Zpol 395 of March 29, 19481 that South Korean power production in April may increase to approximately 50,000 kilowatts or slightly more than is necessary to meet South Korea’s requirements for essential purposes. Part of the increase is accounted for by the activation of the power boat Jacona in Pusan.
If it is possible to step up production in the Yongwal thermal plant and to rehabilitate the power barge Electra which has a capacity of 6,000 kilowatts, the threat to South Korea of a power cutoff by North Korea will be greatly reduced. The power boat Jacona and the power barge Electra, with a total estimated capacity of 26,000 kilowatts would seem to provide the margin of safety needed by South Korea. It is my understanding that these power units are being loaned by the Department of the Navy to USAFIK for the period of the United States occupation. If, when the occupation terminates the Department of the Navy withdraws its barges from South Korea, the newly established Korean Government would be at the mercy of North Korean Peoples Committee in regard to power supplies.
As you know, the Department of State, in the proposed Occupied Areas Act of 1948, is requesting authority from the Congress for the expenditure of funds in South Korea for economic assistance purposes for the period from the termination of the occupation until June 30, 1949. No plans for aid beyond that date have yet been formulated. The maintenance of an adequate electric power supply in South Korea is an integral part of the assistance program planned for that area by State and Army. For this reason I think it is important to reach a decision concerning the desirability and feasibility of retaining in South Korea after termination of the occupation those Navy Department power units which are now on loan to the USAFIK. If it should prove inadvisable to retain these power units in South Korea, it will be essential to seek out alternative means of increasing South Korea’s power producing facilities.
[Page 1182]I would appreciate getting your views as to the accuracy of my analysis of the problem and also any suggestions you may have as to its solution.
Sincerely yours,
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