My telegram No 281 of 19th August 1946 repeated New Zealand as No
193.

In spite of further attempts to reconvene joint United States -
Soviet commission, it has proved impossible to do so owing to
Russian objections to consultation with any Korean political
organisations which oppose trusteeship proposal (see paragraph 1
of my telegram under reference).

2. Mr. Marshall when in Moscow addressed a letter to M. Molotov
proposing that commission should meet again and stating that in
the meantime United States Government sees no alternative but to
take without further delay such independent steps in its own zone
as will advance purposes of Moscow agreement. Mr. Bevin received a
copy of this letter and copies were given to your representatives
in Moscow by the United Kingdom delegation.

3. United States government has not consulted us on subject of
steps it proposes to take but we have learned unofficially from
State Department that they entail a rehabilitation scheme for
Southern Korea involving a grant-in-aid of about 600 million
dollars over a period of three years with object of making
Southern Korea economically self-sufficient. It is also proposed
to appoint a United States political adviser to assist United
States military commander in development of Korean administration
and supervision of interim legislative assembly. There has so far
been no official announcement of this plan and figure quoted is
liable to modification.

4. Plan will eventually be presented to Congress in form of a
presidential message suggesting adoption of a joint resolution to
authorise it. There is apparently no intention of taking this
action until the programme of aid for Greece and Turkey has been
approved, but subject of grant to Korea has already been raised
during Senate hearing of Bill to provide assistance to Greece and
Turkey.

5. Chinese Government has meanwhile transmitted a message through
Chinese ambassador in Moscow to Mr. Marshall suggesting that if
agreement cannot soon be reached by occupying powers consultations
in Korea should be commenced between four powers concerned in
Moscow agreement.

6. M. Molotov has now replied to Mr. Marshall's letter proposing
that [1] commission shall now meet again on May 28th and submit
its recommendations to Governments of United States and U.S.S.R.

in July or August. Copies of this letter were also given to your
representative in Moscow by United Kingdom delegation.

7. Text of messages mentioned in paragraphs 2 and 6 have now been
published.

8. We shall keep you informed of further developments.