Records of the State-War-Navy Coordinating
Committee, Lot 52-M45
Basic Initial Directive to the Commander in Chief, U.S. Army Forces, Pacific, for the Administration of Civil Affairs in Those Areas of Korea Occupied by U.S. Forces
SWNCC 176/8
[Washington, undated.]
1. The Purpose and Scope of This Directive.
a. This directive defines the authority which you will possess and the policies which will guide you in the administration of civil affairs in Korea in the initial period after Japanese surrender prior to the establishment of a trusteeship.
b. Korea, as used in this directive, is defined as those areas of Korea occupied by U.S. forces.
c. This directive is divided into Part I: General and Political; Part II: Economic and Civilian Supply; and Part III: Financial.
Part I
General and Political
2. The Basis and Scope of Military Authority.
a. By virtue of your military occupation of Korea, you are vested with the conventional powers of a military occupant of enemy territory. In addition, and in order to effectuate the Surrender Instrument executed by command of the Emperor of Japan, the Cairo Declaration and the Potsdam Declaration you are authorized to exercise all power necessary to give effect to those instruments.
b. In conformity with the provisions of the Cairo Declaration your administration of civil affairs will be based upon the treatment of Korea as a liberated country to the maximum extent consistent with the security of your forces. In order to effect the greatest possible economy of military personnel you will utilize Koreans in governmental positions as far as possible. You may also utilize Japanese in accordance with paragraph 5f below. You will also take such steps as are necessary on a military level to effectuate liaison with the Russians. In all your activities you will bear in mind the policy of the United States in regard to Korea, which contemplates a progressive development from this initial interim period of civil affairs administration by the United States and the U.S.S.R., to a period of trusteeship under the United States, the United Kingdom, China, and the U.S.S.R., and finally to the eventual independence of Korea with membership in the United Nations organization. In the exercise of your powers you will be guided by the following general principles.
3. Basic Objectives of Military Occupation of Korea.
a. The ultimate objective of the United States with respect to Korea is to foster conditions which will bring about the establishment of a free and independent nation capable of taking her place as a responsible and peaceful member of the family of nations. The achievement of this objective will require the progressive elimination of all vestiges of Japanese control over Korean economic and political life and the eventual substitution of independent Korean governmental, economic and social institutions.
b. As Commander in Chief, U.S. Army Forces, Pacific, you are charged with responsibility for assuring that the Japanese surrender terms are vigorously enforced in Korea and for initiating appropriate action to achieve the objectives of the United States.
c. You will make it clear to the Korean population that your administration of civil affairs in Korea is intended principally:
(1) To insure compliance with the surrender by the Japanese armed forces in Korea;
(2) To effect a complete political and administrative separation of Korea from Japan and to free Korea from Japanese social, economic and financial control;
(3) To facilitate the development of a sound Korean economy devoted to peaceful pursuits; and
(4) To foster the establishment of local self-government and the restoration of a free and independent nation which will conform with the principles expressed in the Charter of the United Nations.
4. The Establishment of Civil Affairs Administration in Korea.
a. Upon occupation you will take prompt action to assure the restoration and maintenance of law and order.
b. You will insure immediate compliance with all orders for carrying out the surrender issued by the Emperor and the Japanese Imperial General Headquarters to the Japanese armed forces and to the armed forces under Japanese control in Korea. In this connection you will issue such further orders as may be required.
c. Local, regional and national agencies of governmental administration will be fully utilized after elimination of those whose functions and responsibilities are inconsistent with the purposes of the occupation and after the removal of all Japanese officials, subject to exceptions permitted in paragraph 5 f below. The remaining agencies and their personnel will be given maximum responsibility for the administration of government and will be charged with the execution of your policies and directives. At all times, however, and in all circumstances you are empowered yourself to take direct action where required to carry out your objectives.
d. You will establish liaison with the Russians and seek through that liaison to achieve the maximum uniformity of procedures and policies in the control of Korea, consistent with the purposes of this directive.
5. Political and Administrative Reorganization.
a. So far as practicable, you will continue the substantive and procedural law existing in Korea at the commencement of your occupation. You will abrogate all laws, ordinances, decrees and regulations which would jeopardize the achievement of the objectives set forth in this directive. You will, in particular, assure the abrogation of all laws, orders and regulations which established and maintained restrictions on political and civil liberties on grounds of race, nationality, creed or political opinion. Agencies charged specifically with the execution of legislation abrogated or to be abrogated shall be abolished.
b. Ordinary criminal and civil courts in Korea will be permitted to continue to function subject to such regulations, supervision and control as you may determine. As rapidly as possible, Japanese judges, other Japanese court personnel and Koreans who collaborated with the former, will be removed. Such officials will be replaced with acceptable and qualified successors. Full power of review will be retained by you over all courts which are allowed to function. You will veto all decisions which are inconsistent with the purposes of your mission. You will take all practicable measures to cause the release of persons held in custody solely under laws or regulations of the type to be abrogated under paragraph 5a above.
c. You will establish such military courts as may be necessary with jurisdiction over offenses against the forces under your command and over such other acts as you may declare to be offenses against your military occupation and the implementation of the surrender. You will, however, except as otherwise deemed necessary by you, assure that Korean courts exercise an effective jurisdiction over cases not of direct or predominant concern to your military occupation.
d. Criminal and ordinary police agencies, and such others as you may consider proper to be retained under appropriate supervision, will be progressively purged of undependable and undesirable elements, and in particular, of Japanese and Koreans who collaborated with the Japanese.
e. Throughout Korea you will assure the dissolution of all elements of the Political Association of Great Japan, the Imperial Rule Assistance Association (Taisei Yokusankai), the Imperial Rule Assistance Political Society (Taisei Seijikai), their branches, affiliates and agencies or any successor organizations, and all Japanese ultra-nationalistic, terroristic and secret patriotic societies and their branches, agencies and affiliates.
f. Only in exceptional circumstances as determined by you will any Japanese be allowed to hold any position of responsibility or influence in public or important private enterprise, nor will any Korean who has been an exponent of militant Japanese nationalism and aggression, who has been an influential member of any Japanese ultra-nationalistic, terroristic or secret patriotic societies, their branches, agencies or affiliates, who has been influential in the activities of the other organizations enumerated in paragraph 5e above, or who manifests hostility to the objectives of the military occupation, be permitted to hold any office as above. Providing security factors permit, and to the extent that qualified Koreans or other suitable personnel are not available, you may temporarily make use of such Japanese and Koreans who have collaborated with the Japanese as are deemed essential by reason of their technical qualifications. You will make every effort to ensure the recruiting and training of suitable Korean replacements for such last-named personnel at the earliest possible moment. Should use be made of Japanese or non-desirable Koreans as above, care will be taken that the Korean population are informed that such use is temporary.
g. You will provide your forces with information concerning the customs of the Korean people and you will enforce such control over the association of your forces with the Koreans and Japanese as you deem necessary to avoid friction, misunderstanding and undesirable incidents. Your officers and troops should so treat the Korean population as to develop confidence in the United States and the United Nations and their representatives.
h. Representatives of civilian agencies of the U.S. Government or of other United Nations Governments shall not participate or function within Korea except upon your approval, and subject as to purpose, time and extent, to decisions communicated to you by the Joint Chiefs of Staff.
6. Demilitarization.
a. You will assure that all units of the Japanese armed forces in Korea, including the Gendarmerie (Kempei) (but not the civil police), civilian volunteer corps and para-military organizations, are promptly disarmed. Personnel of such units will not be treated as prisoners-of-war, but as disarmed units under their own officers being held for demobilization in accordance with directives issued or to be issued to you.
b. All elements of military and para-military organizations of Japanese origin found in Korea together with all associations which might serve to keep alive the military tradition of Japan in Korea will be permanently dissolved. You may, however, for a brief period of time, utilize military and naval agencies for the limited purpose of giving effect to the surrender.
c. In accordance with Section IV, SWNCC 58/5 (Annex to Appendix “B” to J.C.S. 1328 as amended by J.C.S. 1328/1), you will seize or destroy all arms, ammunition, naval vessels and implements of war, including military aircraft and aircraft designed for civil use, and stop the production thereof, except that naval combatant and auxiliary vessels and craft of all kinds, both surface and submarine, including those under repair, alteration or construction will not be destroyed or scrapped pending further instructions from the Joint Chiefs of Staff.
7. Arrest and Internment.
a. Any of the following found in Korea will be arrested and held as suspected war criminals pending further instructions concerning their disposition.
(1) All members of the Japanese Supreme Military Council, the Board of Field Marshals and Fleet Admirals, the Imperial General Headquarters, and the Army and Navy General Staffs;
(2) All commissioned officers of the Gendarmerie (Kempei) and all officers of the Japanese Army and Navy who have been important exponents of militant nationalism and aggression;
(3) All key members of Japanese ultra-nationalistic, terroristic, and secret patriotic societies; and
(4) All persons who you have reason to believe are war criminals or whose names or descriptions are contained in lists of suspected war criminals which have been or may be furnished to you.
b. All persons, regardless of nationality, who have played an active and dominant governmental, economic, financial or other significant part in the formulation or execution of Japan’s program of aggression and all high officials of the Political Association of Great Japan, the Imperial Rule Assistance Association, the Imperial Rule Assistance Political Society, and their agencies and affiliates or successor organizations will be interned pending further disposition. You may intern other civilians as necessary for the achievement of your mission.
c. You may, however, for a brief period of time utilize the closely supervised services of the Japanese arrested or interned as above who are absolutely required by you to expedite the demobilization of the Japanese armed forces.
d. You will receive further instructions concerning your responsibility with relation to war criminals, including those who have committed crimes against peace and crimes against humanity.
e. No differentiation shall be made or special consideration be accorded to civilian or military personnel arrested as war criminals either as to manner of arrest or conditions of detention, upon the basis of wealth of [or?] political, industrial, or other rank or position.
f. All nationals of countries except Japan with which any of the United Nations are or have been at war in World War II (Bulgaria, Finland, Germany, Hungary, Italy, Roumania and Thailand) will be identified and registered and may be interned or their activities curtailed as may be necessary under the circumstances. Diplomatic and consular officials of such countries will be taken into protective custody and held for further disposition.
g. Property, real and personal, owned or controlled by persons who have been detained or arrested under the provisions of paragraph 7 will be taken under your control pending directions as to its eventual disposition.
8. Prisoners of War, United Nations Nationals, Neutrals, and Other Persons.
a. You will insure that prisoners of war of the United Nations are cared for and repatriated.
b. Nationals of neutral countries will be required to register with the appropriate military authorities. They may be repatriated under such regulations as you may establish. However, all nationals of neutral nations who have actively participated in any way in the war against one of the United Nations will be arrested for disposition in conformity with later instructions. Neutral nationals will be accorded no special privileges of communications or business relationships with their home countries or people resident outside Korea. The persons, archives and property of consular officials of neutrals will be accorded full protection.
c. All civilians who are nationals of the United Nations, resident or interned in Korea will be identified, examined closely, and, if you deem it advisable, may be placed in custody or restricted residence. All such nationals who fall within the provisions of paragraph 7b above shall be arrested and held as suspected war criminals. All other United Nations nationals who have actively participated in any way in the war against one or more of the United Nations will be arrested and held for later disposition. Thereafter, they will be dealt with in accordance with instructions to be furnished you. In general, practical measures will be taken to insure the health and welfare of United Nations nationals and to facilitate their prompt repatriation if they so desire.
d. Within such limits as are imposed by the military situation, you should take all reasonable steps necessary to preserve and protect the property of the United Nations and their nationals.
e. Formosan-Chinese technically may be considered Japanese subjects and may, if necessary, be treated by you as enemy nationals. However, they are not included in the term “Japanese” as used in this directive. Insofar as military security permits, you will treat them as liberated people. Formosan-Chinese may be repatriated if they so desire under such regulations as you may establish. However, priority will be given to the repatriation of nationals of the United Nations.
f. All Korean displaced persons, including those formerly resident in Korea north of 38° North Latitude, found outside Korea should be permitted to return to Korea. You will make necessary arrangements to carry out any agreements made on a governmental level by the United States and the U.S.S.R. for exchange of displaced persons within Korea.
g. You should organize adequate reception facilities for Korean displaced persons to be repatriated from outside Korea or returned from Korea north of 38° North Latitude.
h. All Korean displaced persons formerly resident in Korea south of 38° North Latitude should be permitted to return to their homes.
i. The care and return to their homes or other disposition of internally displaced Koreans should be the responsibility of the local authorities subject to your supervision and control.
j. (1) All Japanese nationals whose place of origin was the main Japanese home islands should be repatriated to Japan with such exceptions as you may deem appropriate, such as those whose presence is temporarily required on grounds of professional or technical abilities.
(2) All repatriations of Japanese should be effected in an orderly and humane manner.
(3) You should determine the rate of repatriation from Korea on the basis of arrangements for reception to be made by the Japanese Government at your direction and subject to your approval.
(4) The movement of Japanese from Korea to Japan should be coordinated with repatriation of Koreans from Japan wherever practicable.
(5) You should take steps to protect the Japanese nationals awaiting transportation from disorders resulting from any anti-Japanese feeling on the part of the Korean people, and if necessary effect the segregation of the Japanese.
k. All expenses incurred by United States authorities in connection with displaced persons operations covered by this Directive shall be considered a part of occupation costs which may be included in the United States claims against Japan.
l. UNRRA and private relief agencies may be used at your discretion wherever available in the care and repatriation of United Nations nationals and those assimilated to them in treatment.
9. Political Activity.
a. The dissemination of Japanese militaristic, National Shintoistic and ultra-nationalistic Japanese ideology and propaganda in any form, especially that which urges continued Japanese control of Korea, will be prohibited and completely suppressed.
b. You will establish such minimum control and censorship of civilian communications including the mails, wireless, radio, telephone, telegraph and cables, films and press as may be necessary in the interests of military security and the accomplishment of the purposes set forth in this directive. Subject to such controls you will facilitate and encourage the distribution of news and information, both domestic and foreign through all channels and media. All available media of public information will be utilized for the guidance of the Korean people in the attainment of the objectives set forth in paragraph 3a through the dissemination of democratic ideals and principles.
c. You will immediately place under control all existing political parties, organizations and societies. Those whose activities are consistent with the requirements of the military occupation and its objectives should be encouraged. Those whose activities are inconsistent with such requirements and objectives should be abolished. Subject to the necessity of maintaining the security of the occupying forces, the formation and activities of democratic political parties with rights of assembly and public discussion will be encouraged.
d. Encouragement will be given to the development of democratic organizations in labor, industry and agriculture.
e. Freedom of religious worship shall be proclaimed promptly.
f. To the extent that the security of your military occupation and the attainment of its objectives are not prejudiced and, subject to subparagraphs a, b and c above, you will insure freedom of opinion, speech, press, and assembly.
g. You will not extend official recognition to, nor utilize for political purposes, any self-styled Korean provisional government or similar political organizations, although you will permit the existence, organization and activity of such groups subject to the provisions of paragraph 9 c above. You will utilize the services of members of such organizations as individuals when desirable without commitment as to the organizations.
10. Education, Arts and Archives.
a. Educational institutions will be permitted to continue or to reopen as soon as possible. As rapidly as possible, all teachers who have been exponents of Japanese militant nationalism and aggression and those who continue actively to oppose the purposes of the military occupation will be removed and replaced by acceptable and qualified Korean successors. To the extent practicable in view of the limited period covered by this directive, you will assure that curricula acceptable to you are employed in all schools and that Japanese influences are eliminated therefrom.
b. You should cause to be preserved for information and use the records of all governmental and quasi-governmental, important Japanese or Japanese controlled, private, financial, industrial, manufacturing and business concerns, and the Japanese organizations referred to in paragraph 5e above.
c. You will, so far as practicable, cause to be protected and preserved, all historical, cultural and religious objects, against depredations by the occupational forces, or others.
Part II
Economic and Civilian Supply
A. ECONOMIC
11. Objectives and Methods of Control.
a. Such controls will be imposed with respect to Korean economic activities including essential public services, financial, banking, exports, imports, and production and distribution of essential commodities, as may be necessary for the following purposes:
(1) To meet the needs of the occupying forces;
(2) To maximize production of all normal surplus items of foods and of goods important to the Korean economy.
(3) To eliminate all vestiges of Japanese control over Korean economic life;
(4) To foster conditions that will separate Korea from economic dependence upon Japan.
b. Subject to your control, participation of Korea in world trade relations will be encouraged.
12. You will utilize local, regional, and national agencies of governmental administration after elimination of those whose functions and responsibilities are inconsistent with the purposes of the occupation and after the removal of all Japanese officials subject to exceptions permitted in Part I, paragraph 5f above, for the execution of the economic measures required by your directive. At all times, however, and in all circumstances you are empowered yourself to take direct action where required to carry out your objectives.
13. Reports and Surveys.
a. You will institute or assure the maintenance of such statistical records and reports as may be necessary in the carrying out of your objectives or meeting the needs of your military government.
b. You will undertake appropriate surveys as may assist you to achieve the objectives of paragraph 14a and 20 of this directive. Reports based on these surveys will specify condition and capacity of plant and equipment, and the extent of stocks of raw materials, finished goods and goods in process. You will communicate to this government through the Joint Chiefs of Staff the results of such surveys.
14. Armament Production.
Pending receipt of a further directive you will
a. Suspend the production, acquisition, development, maintenance or use of all arms, ammunitions and other implements of war, naval vessels, and all types of aircraft, including those designed for civilian use, and all parts, components, and materials especially designed for incorporation therein.
b. Seize and safeguard all facilities used or intended for use in the production of any items covered in this paragraph, pending receipt of further instructions.
c. Permit the production of items enumerated in this paragraph to the minimum extent necessary to met the requirements of the occupying forces.
15. In order to accomplish the objective specified in paragraph 11a (2), you will encourage the conversion of facilities mentioned in paragraph 14a, for the production of consumer goods.
16. Agriculture, Industry and Internal Commerce.
You will immediately establish liaison with the Commander in Chief of Soviet Forces in the Far East, in order to maintain to the maximum extent the normal flow of goods and the normal operation of transportation and communications between the United States and Russian-occupied zones of Korea.
17. You will use all means at your disposal to maximize the production of foodstuffs (including reactivation of the fishing industry), fuel and other essential goods and to continue or establish as rapidly as possible effective rationing and other machinery for the collection and distribution thereof. You will insure to the maximum possible extent the equitable distribution of goods and services throughout the area of your occupation.
18. You will accomplish emergency repair and construction for the restoration of transportation, communications services, and public utilities essential to meet the objectives and needs of the occupying forces.
19. You will exercise such controls as may be practicable to prevent or restrain inflation of a character or dimension which would endanger the accomplishment of the objectives of your occupation as outlined in paragraph 11a. You will, in particular, maintain or establish controls of prices and wages and take the fiscal and financial and other measures appropriate to this end.
20. You will protect and maintain for such disposition as is determined by this and other directives, all plants, equipment, patents, books and records, and other significant property of large Japanese industrial and financial companies and trade and research associations, making report of action taken to the Joint Chiefs of Staff.
21. a. You will insure that all laboratories, research institutes, and similar technological organizations are closed immediately except those you deem necessary to the purposes of the occupation. You will provide for the maintenance and security of physical facilities thereof when deemed necessary, and for the detention of such personnel as are of interest to your technological or counter-intelligence investigations. You will at once investigate the character of the study and research conducted in such closed organizations and as rapidly as possible permit the resumption of those forms of study and research that have an obviously peaceful purpose under appropriate regulations which (1) define the specific type of research permitted, (2) provide for frequent inspection, (3) require free disclosure to you of the results of the research, and (4) impose severe penalties, including permanent closure of the offending institution whenever the regulations are violated.
b. All facilities for research on atomic energy or related matters shall be seized and all persons engaged in such research taken into custody. Prompt report will be made to the Joint Chiefs of Staff with full information regarding the action taken and the results thereof. No research activities on atomic energy or related matters shall be permitted in Korea.
22. Public Health.
You will encourage the Koreans to develop as high a level of public health as is possible within means at their disposal. To this end you will furnish such technical advice and other assistance as is available consistent with the provisions of paragraph 25c below.
23. International Economic Transactions.
Using the existing governmental machinery to the maximum extent consistent with paragraph 12 above, you will establish control over all Korean trade in goods and services with foreign countries and will take steps to insure that:
a. Persons, corporations and organizations in Korea will be permitted to acquire foreign assets only by our [your] specific approval.
b. No firm in Korea will participate in international cartels or other restrictive international contracts or arrangements and all existing Korean participation in such cartels, contracts or arrangements will be promptly terminated.
24. destitution.
You will take all steps practicable to require full and prompt restitution of all identifiable looted property.
B. CIVILIAN SUPPLY AND RELIEF
25. Civilian Supply Policy and Standard of Provision.
a. You will assure that all practicable economic and police measures are taken to achieve the maximum utilization of essential Korean resources in order to limit U.S. responsibility for imports into Korea. Such measures will include production and price controls, rationing, control of black markets, fiscal and financial controls and other measures directed toward full employment of resources, facilities and means available in Korea.
b. To the extent that goods may be available in areas occupied by you in quantities surplus to the needs of the whole of Korea, such surpluses will be made available in the first instance, to meet United States military requirements in Pacific Ocean and Asiatic areas.
c. You will initially be responsible for providing imported supplies only to supplement local resources and only to the extent that supplementation is needed to prevent such serious disease and widespread unrest as would endanger the occupying forces or interfere with military operations. Such imports will be confined to minimum quantities of food, fuel, medical and sanitary supplies and other essential items, including those which will enable local production of such supplies which you would otherwise have to import.
d. If importation of supplies for which you are responsible is necessary, you will utilize to the fullest extent possible surpluses from other areas. To the extent that such surpluses are available in areas under the jurisdiction of other United States commanders, arrangements may be made by you directly with such other commanders. To the extent that such surpluses are available in areas under the jurisdiction of governments other than the United States, or the military commanders of such governments, negotiations necessary to obtain such surpluses will be conducted by or with approval of local United States diplomatic representatives in the areas in question. In the event such diplomatic representatives are not available, you will report the situation, with your recommendations to the Joint Chiefs of Staff.
e. If you deem that, in order to prevent serious disease or widespread unrest or to attain the objectives of your occupation, you should assume responsibility for additional imports, you will submit your recommendations to the Joint Chiefs of Staff accompanied by statements of requirements.
26. Methods and Conditions of Distribution.
You will take all practicable steps to assure the fair and equitable distribution of supplies under uniform ration scales.
27. Imported supplies for the civilian population should, in so far as practicable and desirable and consistent with military expediency, be delivered to such Korean public supply agencies or other consignees as are acceptable to you and under your direct supervision or control. Whenever possible, such deliveries will be at ports of entry, but if necessary, deliveries may take place at appropriate inland centers of distribution.
28. You may make sales directly to wholesalers or other commercial dealers in the event that no satisfactory public supply agency exists or that operational or other reasons render distribution of civilian supplies through such an agency impracticable. In order to limit direct provision and distribution of supplies by you to the civilian population, you will involve the occupying forces in such responsibility to the minimum extent possible. Such direct sales by you as are necessary will be paid for by the purchaser in local currency at prices determined by you to be consistent with the internal economy.
29. Supplies delivered to supply agencies or other consignees will be sold by them through distribution channels and in accordance with distribution policies satisfactory to you and at prices determined by you to be consistent with the internal economy. When military necessity requires, civilian supplies may be made the subject of direct relief issue by you or by supply agencies under your supervision or control.
Part III
Financial
30. In the administration of financial matters, you will follow the principle that, to the maximum extent possible, without jeopardizing the successful execution of measures required to implement the objectives of the occupation, Korean personnel, authorities and agencies should be used, and if necessary, new Korean agencies should be established, subject to such supervision as is necessary to insure that they carry out their task. For this purpose appropriate authority should be given to Korean agencies and administrative services, subject to strict observance of the provisions of this directive regarding the removal and exclusion from positions of responsibility or influence of all Japanese, pro-Japanese Koreans and other pro-Japanese elements. You may establish administrative machinery not dependent upon the Korean authorities and agencies to the extent necessary to execute or assure the effective execution of the policies and programs in this directive.
31. a. You should, in cooperation with your military government administration in Japan, take steps necessary to sever all managerial and other organizational connections of banks, including postal banking offices, and all other financial institutions located in Korea with banks and business enterprises or persons located in Japan.
b. You should remove and exclude from positions of responsibility or influence in all public and private financial institutions, agencies or organizations all Japanese, pro-Japanese Koreans and other pro-Japanese elements and all persons who have actively participated in the organizations enumerated in paragraph 38b (1) below. It may be generally assumed in absence of evidence to the contrary that any persons who have held key positions in any such institutions, agencies, or organizations are pro-Japanese.
32. a. You will use in Korea supplemental military yen currency (Type “A”) issued pursuant to military proclamation hereinafter referred to as supplemental yen (Type “A”) and Bank of Chosen notes. Supplemental yen (Type “A”) will be declared legal tender in Korea and will be circulated therein interchangeably at par without distinction with Bank of Chosen notes. Records will be kept of amounts of currencies used by your forces.
b. Supplemental military yen currency notes (Type “B”) Bank of Japan notes, Bank of Taiwan notes and Japanese military yen issued for circulation in territories formerly occupied by Japan will not be legal tender in Korea. The importation of any type of currency into Korea, except for your use, should be prevented by border and other control measures. As soon as practicable, Bank of Japan and Bank of Taiwan notes should be exchanged for Bank of Chosen or supplemental yen (Type “A”) on a one for one basis.
c. No Korean governmental or private bank or agency will be permitted to issue banknotes or currency without your authorization.
33. You will not announce, establish or permit the use or publication until receipt of further instructions, of any general rate of exchange between Bank of Chosen notes and supplemental yen (Type “A”) on the one hand and the U.S. dollar and other currencies on the other. However, a rate of conversion to be used exclusively for pay of military and naval personnel and for military and naval accounting purposes, i.e., 15 Bank of Chosen and/or supplemental yen (Type “A”) equal one U.S. dollar, has already been communicated to you.
34. a. A Financial Division should be established within your Military Government Administration which should include in its functions the control of supplemental yen to be used by your forces within the area including receipt, storage, issue, exchange, and shipment of such currency. It should maintain all the accounts and records necessary to indicate the supply, control, and movement of such currency, as well as financial data which may be useful in the determination of occupation costs and other expenditures arising out of operations or activities involving participation of your forces.
b. In so far as operations relate to the provision of supplemental yen for the pay and other cash requirements of military formations of your forces, the Financial Division should draw the necessary resources from its currency reserve and should record the debit against the U.S. forces concerned.
c. In so far as operations relate to the provision of supplemental yen for civil administration, the Financial Division should draw on its currency reserve and should record the debit against your Military Government Administration.
35. a. You will designate the Bank of Chosen, to perform under your direction central banking functions. Simultaneously, all connections between the Bank of Chosen and institutions or persons in Japan should be severed in accordance with paragraph 31a above. When satisfied that this bank is under adequate control, you may make credits available in legal tender currency of Korea, if necessary, to place such bank in a position to finance approved business either directly or through other banks or other financial institutions.
b. In an emergency you are also authorized to make direct advances, only in Korean legal tender currency, to other Korean financial and business institutions.
c. You may designate the head office of the Bank of Chosen under your direction, control and supervision as agent for the Financial Division of your Military Government Administration.
36. You will close and not allow to reopen banks and other financial institutions whose paramount purpose has been the financing of war production or the mobilization or control of financial resources in colonial or other Japanese-occupied territories for the benefit of Japan. These include such offices as may be found in Korea of the
a. Bank of Taiwan,
b. Southern Development Company,
c. Southern Development Bank,
d. Central Bank of Mancheu,
e. Bank of Mongolia,
f. Federal Reserve Bank of China,
g. Central Reserve Bank of China,
h. War Time Finance Bank, and
i. National Financial Control Association and its member control associations.
You will take custody of all the books and records of these banks or institutions and you should take measures to ensure in so far as practicable the preservation of books and records of all public and private banks and other financial institutions.
37. You are authorized to take the following steps:
a. To prohibit, or regulate transfers or other dealings in private or public securities or real estate or other property;
b. To close banks, insurance companies and other financial institutions other than those indicated in paragraph 36 above, only where clearly necessary for the purpose of introducing satisfactory control, removing objectionable personnel and taking measures to effectuate the program for the blocking of certain accounts and transfers or the determination of accounts to be blocked. You should reopen any closed banks or financial institutions, except those indicated in paragraph 36 above, as promptly as is consistent with the accomplishment of the foregoing purposes.
38. With the exception of non-Japanese who served in the armed forces of any of the United Nations or in any other direct way aided the United Nations’ victory, you will prohibit
a. The payment of all military pensions, or other emoluments or benefits, except compensation for physical disability limiting the recipient’s ability to work, at rates which are no higher than the lowest of those for comparable physical disability arising from non-military causes;
b. The payments of all public or private pensions or other emoluments or benefits granted or conferred
(1) by reason of membership in or services to the Political Association of Greater Japan, the Imperial Rule Assistance Association (Taisei Yokusankai), the Imperial Rule Assistance Political Society (Taisei Soijikai), their affiliates and agencies or any successor or similar organizations, and all Japanese nationalistic, terroristic and secret patriotic societies and their agencies and affiliates, or by reason of any other assistance rendered to Pan-Japanism or Japanese imperialism,
(2) to any person who has been removed or excluded from an office or position in accordance with paragraphs 30 and 31. above, and
(3) to any person arrested and detained in accordance with paragraph 7 of the political directive during the term of his arrest, or permanently, in the case of his subsequent conviction.
39. a. You will take such action as may be necessary to insure that all laws and practices promulgated by the Japanese authorities relating to taxation or other fields of finance, which discriminate for or against any persons because of race, nationality, creed or political opinion, will be amended, suspended or abrogated to the extent necessary to eliminate such discrimination. Consistent with the foregoing purposes, the Korean authorities should be required to take such action in the field of taxation as is necessary to assure an adequate inflow of revenues. Any public revenue in Korea collected by the Japanese Government prior to occupation may be used for approved public expenditures.
b. You should exercise general control and supervision over the expenditures of public funds to the extent necessary to achieve the purposes of the occupation and to insure that public expenditures are consistent with the objectives stated elsewhere in this directive.
c. You will promptly institute a survey for the purposes of ascertaining
(1) the amount of the Japanese Government debt held in Korea,
(2) the fiscal position of Korea.
40. You will impound or block all gold, silver, platinum, currencies, securities, accounts in financial institutions, credits, valuable papers, and all other assets falling within the following categories:
a. Property owned or controlled, directly or indirectly, in whole or in part, by any of the following:
(1) the governments, nationals, or residents of Germany, Italy, Bulgaria, Rumania and Hungary, including those of territories formerly occupied by them and by Japan;
(2) absentee owners, including United Nations and neutral governments;
(3) any institutions dedicated to public worship, charity, education, or the arts and sciences, which have been used by Pan-Japanese nationalistic, terroristic, or secret patriotic societies to further their interests or to cloak their activities; and
(4) any person subject to arrest under the provisions of paragraph 7 of the political directive and all other persons specified by military government by inclusion in lists or otherwise;
(5) all organizations, clubs or other associations prohibited or dissolved by Military Government.
b. Property which has been the subject of transfer under duress, or wrongful acts of confiscation, disposition or spoliation, whether pursuant to legislation or by procedure purporting to follow forms of law or otherwise; and
c. Works of art or cultural material of value or importance, regardless of the ownership thereof.
You will take such action as will insure that any impounded or blocked assets will be dealt with only as permitted under licenses or other instructions which you may issue. Property in Korea taken from non-Japanese under the conditions stated in b above should be restored as promptly as possible, subject to appropriate safeguards to prevent the cloaking of Japanese, pro-Japanese, or militaristic influence.
41. All foreign exchange transactions, including those arising out of exports and imports, shall be controlled for the purpose of achieving the objectives set forth in this directive. To effectuate such objectives you should
a. prohibit, except as authorized by regulation or license, all dealings in gold, silver, platinum, foreign exchange and all foreign exchange transactions of any kind;
b. make available any foreign exchange proceeds of exports for payment of imports necessary to the accomplishment of the objectives set forth in this directive and authorize no other outlay of foreign exchange assets without specific approval of your government through the Joint Chiefs of Staff;
c. establish effective controls with respect to all foreign exchange transactions, including:
(1) transactions as to property between persons inside Korea and persons outside Korea;
(2) transactions involving obligations owed by or to become due from any person in Korea to any person outside Korea; and
(3) transactions involving the importation into or exportation from Korea of any currency, foreign exchange assets or other form of property.
42. You should seek out and take title to all Japanese public and private property interests of any type and description located in Korea. You will provide full reports to your Government, through the Joint Chiefs of Staff, on such property interests which will be held for ultimate disposition in accordance with detailed instructions to be forwarded to you.
43. You will maintain such accounts and records as may be necessary to reflect the financial operations of your military occupation and you will provide the Joint Chiefs of Staff with such information as they may require, including financial data referred to in paragraphs 32a and 34 above, for intergovernmental settlement and other necessary purposes.
