501.BB Korea/6–1048: Telegram
The Secretary of State to the Embassy in the Soviet Union
us urgent
716. Urtel 1088, June 10.1 In event you perceive no objection note along following lines should be delivered FonOff soonest. Inform Dept time of delivery for release text here:2
“I have the honor to bring to the attention of your Excellency the matter of the distribution of electric power in Korea.
As you are doubtless aware, the principal electric power production facilities for the whole of that country are located in the area north of the 38° parallel presently occupied by Soviet forces. As you are probably also aware, those facilities were designed to meet a substantial proportion of the electric power requirements of that part of the country lying south of the 38° parallel and presently occupied by U.S. forces.
With a view to ensuring that the people of south Korea would not be deprived of the continued normal flow of electric power from such north Korean sources, the US Command entered on June 17, 1947 into an agreement with the Soviet Command designed to effect a settlement for power already supplied and to provide the basis for a subsequent settlement for power to be furnished in the future. The provisions of that agreement were substantially as follows:
- (a)
- the cost of power delivered for the period August 16, 1945, through May 31, 1947, was fixed at 16,334,735 yen, based upon 1941 prices at 0.0195 yen per K.W.H.;
- (b)
- payment should be in equipment and specified materials to be delivered by the US Command within six months from the date of delivery of final revised specifications;
- (c)
- the cost of the equipment and materials would be determined on the basis of 1941 Japanese price lists, or when unavailable or lacking the necessary data, corresponding US price lists would be used. The rate of exchange for this purpose was fixed at 100 yen equalling $23.44;
- (d)
- should the delivery of particular materials be impossible at a specified time, new terms of delivery or the substitution of other materials would be determined by mutual agreement;
- (e)
- electric power supplied after June 1, 1947, would be the subject of a separate agreement, to be signed within one month.
When it became apparent, as early as December 1947, that delays in the delivery of the specified materials would be unavoidable because [Page 1228] of their extreme shortage in the world markets, the Commanding General of the US Army Forces in Korea, in accordance with stipulation (d) of the agreement as outlined above, initiated a series of efforts to open discussions with the Soviet Command regarding the substitution of other materials, or to settle the account in American dollars. By his letter of May 8, 1948, General Hodge notified General Korotkov that the 8th shipment of materials, in partial payment of electric power received prior to June 1, 1947, would be ready for inspection and delivery on May 25, 1948. The estimated value of this delivery was given as 40% of the total debt, and it was pointed out that this amount, in addition to the 35% already delivered, left an unpaid balance of 25% which General Hodge suggested should be negotiated, under the terms of the Agreement, at a conference between the two commands. On May 14, 1948, six days after the delivery of this letter, the electric power supply to south Korea was cut off, and has never been resumed. On May 17, 1948, in a letter to General Korotkov, General Hodge protested this unwarranted action.
On June 12, 1948, General Hodge referring to his letter of May 8, 1948, notified the Soviet Command in north Korea that materials in payment of the outstanding obligation were either in Seoul awaiting delivery to north Korea, or en route to Seoul. The alternative of settling the account in United States dollars was also reiterated. In this letter,. General Hodge again proposed that upon the resumption of the flow of electric power to south Korea and the transfer of the materials now awaiting delivery to north Korea, a conference of accredited representatives of the two Commands, including representative Koreans from both north and south Korea, be convened in either Seoul or Pyongyang. General Hodge expressed the hope that through such a conference a definitive settlement of outstanding accounts, which would include payments for power delivered after June 1, 1947, could be made.
In reply to his letter of May 17, 1948, General Hodge has received a letter from General Merkulov dated June 15, 1948, which reiterated previous communications from the Soviet Command in north Korea to the effect that ‘the Soviet Command cannot fulfill the functions as an intermediary between the American Command and the Peoples Committee of north Korea, in the case of delivery of electric energy to south Korea’. Acknowledgment has not been made of General Hodge’s letter of June 12, 1948.
It is the view of this Government that so long as Soviet forces remain in occupation of north Korea, the Soviet Command cannot divest itself unilaterally of its responsibilities, including the responsibility incurred under the agreement of June 17, 1947. Should the Soviet Command persist in refusing to maintain an adequate flow of electric [Page 1229] power to south Korea, the people of that area will thereby be subjected to unwarranted hardships.
It is urged, therefore, that instructions be transmitted to the Soviet Command in Korea to resume deliveries of electric power to south Korea immediately, and to participate with representatives of the United States Command in the negotiations proposed by General Hodge.” Sent Moscow, repeated Seoul for info as Dept’s No. 203.
- Not printed.↩
- Telegram 1191, June 26, 3 p. m., from Moscow, reported the note’s delivery to the Soviet Foreign Office that day at 12:10 p. m. Telegram 210, June 29, noon, to Seoul, stated the note was being made public that day at 8 p. m., and simultaneous release at Seoul was authorized. This was repeated to Moscow as 735. (501.BB Korea/6–2648)↩