(d) The fiscal year 1950 funds amounting to $110,000,000 (net) were granted by the following laws:

1. Third Deficiency Appropriation Act (Public Law 343, 81st Cong.) (funds appropriated for period July 1 to Oct. 15, 1949; $17,500,000 appropriated by Public Law 154 and Public Law 196 to be charged against this).

2. Second Supplemental Appropriation Act (Public Law 430, 81st Cong.; funds for Oct. 15 to Feb. 15, 1950).

3. Deficiency Appropriation Act of 1950 (Public Law 583, 81st Cong.) (under authority of Far Eastern Economic Assistance Act of 1950, Public Law 447, 81st Cong.) __

Total_

$30, 000, 000

30, 000, 000

50, 000, 000

1110, 000, 000 In addition to funds appropriated under Third Deficiency and Second Supplemental Acts, ECA borrowed $30,000,000 from RFC. Of the $50,000,000 last made available, the RFC loan will be repaid, leaving a net of $20,000,000 and a total of $110,000,000.

C. MILITARY ASSISTANCE TO KOREA'

1. The policies governing military assistance

Military assistance to Korea may be divided into two parts: (a) that furnished during fiscal year 1950 by the transfer of equipment upon withdrawal of the United States occupation forces, and (b) that furnished under the Mutual Defense Assistance Act of 1949. All of the assistance, however, was predicated upon definite policies. The Korean military force was to be an internal security force. Its equipment was to be such as would permit the development of a welltrained force that could preserve internal security, prevent border raids and incursions north of the thirty-eighth parallel, and, as a byproduct, deter armed attack or other aggression by the North Korean forces.

2. Assistance during fiscal year 1950 not under the Mutual Defense Assistance Act of 1949

When it was decided to withdraw the United States forces it was realized the Koreans would need security forces, and the Government was given 40,000 Japanese rifles together with available stocks of ammunition for use by the security forces.

When the United States occupation forces were withdrawn from the Republic of Korea in July of 1949, they left behind them military and naval equipment which was transferred to the southern Korean security forces under the Surplus Property Act through the Office of Foreign Liquidation. This equipment had originally cost the United States approximately $56,000,000 and had a 1949 replacement value of about $110,000,000. The Ground Force equipment was primarily divisional in character, and was sufficient for the proper equipment of a security force of 50,000 men, in accordance with the policies stated above.

1 Pars. 1, 2, and 3 are based on information supplied by Department of Defense and Department of Defense Press Branch Fact Sheet No. 136-505 of July 6, 1950.

This equipment turned over to the Korean Government forces included more than 100,000 small arms (including rifles, pistols, and machine guns) and approximately 50,000,000 rounds of ammunition; more than 2,000 rocket launchers, 2.36" (bazookas) and over 40,000 rounds of bazooka ammunition; more than 4,900 vehicles of all types; and a large number of 37-millimeter and 57-millimeter antitank guns, 105-millimeter howitzers, 60- and 80-millimeter mortars, together with over 700,000 rounds of ammunition for these weapons.

In addition to the Ground Force equipment, 79 vessels mainly of United States Navy types, including Yard Mine Sweepers (YMS), Landing Craft Medium (LCM), Landing Craft Infantry (LCI), and picket boats, together with about $150,000 worth of spare parts, were transferred at the same time.

Subsequent to the withdrawal of United States forces and to supplement individual and organizational equipment provided the Koreans through the Office of Foreign Liquidation Commission at the time of withdrawal, individual organizational equipment for 15,000 troops was transferred from United States stocks in Japan to the South Koreans by the United States during the first quarter of fiscal 1950. The estimated original cost of this military equipment was slightly under $1,000,000, and the estimated replacement cost $1,500,000.

3. Assistance rendered under Public Law 329

The fiscal year 1950 program for military assistance to Korea was included within the $27,640,000 appropriated in October 1949 (Public Law 430, 81st Cong.) under Title III of the Mutual Defense Assistance Act of 1949 (Public Law 329) for Iran, Korea, and the Philippines. The program for Korea was based on the policy of the administration to provide equipment for the existing Korean forces to enable them(a) To preserve internal security;

(b) To prevent border raids and incursions from north of the thirty-eighth parallel; and, as a byproduct;

(c) To deter armed attack or other aggression by the forces from North Korea.

Much of the equipment was to maintain and supplement the equipment turned over by the Army when the occupation forces left in July 1949.

The military-aid policy under MDAP did not provide for a Korean air force. However, an air detachment of liaison planes was authorized, these having been included in the equipment transferred when the occupation forces withdrew.

The amount of MDAP aid allotted to the Republic of Korea has not been publicly disclosed. No deliveries of any consequence have been made as yet, although substantial deliveries are scheduled for the first quarter of fiscal year 1951 and at an increasing rate thereafter. The reasons for the lack of deliveries are these:

(a) In light of the priority assigned to Korea by the Joint Chiefs of Staff, and the policy on which Korean aid was based, the major portion of equipment scheduled in the fiscal-year-1950 program was unavailable from excess or war-reserve stocks and had to come from commercial sources under new procurement contracts. (b) Such equipment as was scheduled to come from Department of Defense stocks had to be reactivated.

(c) Considerable time was necessarily taken up in getting the program started initially. Appropriations were not made available until October 28, 1949; the bilateral agreement with Korea was not signed until January 26, 1950; the program was not approved until March 29, 1950, because of necessary delay to await results of an MDAP survey team's discussions with Korean military authorities.

As a result of the armed invasion from North Korea, equipment and ammunition immediately needed to enable the Republic of Korea to defend itself in active warfare are now being rushed from stocks of the United States Far Eastern Command in Japan. These will necessarily have to be replenished from stocks in the zone of the interior.

In addition to grant aid as indicated above, equipment in the approximate amount of $253,000 has been transferred to the Republic of Korea under the reimbursable aid provisions of Public Law 329, section 408 (e), at no cost to the United States. This equipment comprised naval guns and ammunition and aircraft armament. 4. Legislation providing military assistance

Public Law 329, Eighty-first Congress, the Mutual Defense Assistance Act of 1949 (excerpts):

TITLE III

OTHER ASSISTANCE

SEC. 301. The President, whenever the furnishing of such assistance will further the purposes and policies of this Act, is authorized to furnish military assistance as provided in this Act to Iran, the Republic of Korea, and the Republic of the Philippines.

SEC. 302. There are hereby authorized to be appropriated to the President for the period through June 30, 1950, out of any moneys in the Treasury not otherwise appropriated, for carrying out the provisions and accomplishing the purposes of section 301, not to exceed $27,640,000.

(c) Whenever he determines that such action is essential for the effective carrying out of the purposes of this Act, the President may from time to time utilize not to exceed in the aggregate 5 per centum of the amounts made available for the purposes of any title of this Act for the purposes of any other title. Whenever the President makes any such determination, he shall forthwith notify the Committee on Foreign Relations of the Senate, the Committees on Armed Services of the Senate and of the House of Representatives, and the Committee on Foreign Affairs of the House of Representatives.

(e) The President may, from time to time, in the interest of achieving standardization of military equipment and in order to provide procurement assistance without cost to the United States transfer, or enter into contracts for the procurement for transfer of, equipment, materials or services to nations designated in title I, II, or III of this Act, or to a nation which has joined with the United States in a collective defense and regional arrangement: Provided, That, prior to any such transfer or the execution of any such contracts, any such nation shall have made available to the United States the full cost, actual or estimated, of such equipment, materials, or services, and shall have agreed to make available forthwith upon request any additional sums that may become due under such contracts. Public Law 430, Eighty-first Congress, the Second Supplemental Appropriation Act, 1950 (excerpt):

FUNDS APPROPRIATED TO THE PRESIDENT

MUTUAL DEFENSE ASSISTANCE

For expenses necessary to enable the President to carry out the provisions of the Mutual Defense Assistance Act of 1949 for the period through June 30, 1950, $814,010,000, of which (a) $500,000,000 shall be available, in accordance with section 102, for carrying out the provisions of title I, including expenses, as authorized by section 408 (b), of administering the provisions of said Act and the Act of May 22, 1947 (61 Stat. 103), as amended (in addition to amounts heretofore appropriated for such expenses under the latter Act); (b) $211,370,000 shall be available in accordance with title II for carrying out the provisions of the Act of May 22, 1947, as amended; and (c) $102,640,000 shall be available for carrying out the provisions of title III, including $27,640,000 as authorized by section 302 and $75,000,000 as authorized by section 303. In addition to the foregoing appropriation, the President is hereby specifically authorized, in accordance with section 103, to enter into contracts for carrying out the provisions of title I in amounts not exceeding in the aggregate $500,000,000 during the period ending June 30, 1950.

5. Military Assistance Agreement between United States and Republic of Korea, January 26, 1950

PREAMBLE

The Governments of the United States and of the Republic of Korea:

Desiring to foster international peace and security, within the framework of the Charter of the United Nations, through measures which will further the ability of nations dedicated to the purposes and principles of the Charter to develop effective measures for self-defense in support of those purposes and principles; and without prejudice to continue exertion of maximum efforts to obtain agreements to provide the United Nations with armed forces as provided by its Charter, and to obtain agreement among member nations upon universal regulation and reduction of armaments under adequate and dependable guarantee against violation;

Recognizing that measures to eliminate insecurity caused by fear of aggression will enhance the progress of economic development;

Considering that, in furtherance of these principles, the Government of the United States has enacted the Mutual Defense Assistance Act of 1949 providing for the furnishing of military assistance by the United States of America to the Republic of Korea; and

Desiring to set forth the understandings which govern the furnishing of assistance by the Government of the United States under the Mutual Defense Assistance Act of 1949, and the receipt of such assistance by the Republic of Korea;

Have agreed as follows:

ARTICLE I

1. Each Government, consistently with the principle that economic recovery is essential to international peace and security and must be given clear priority, will make or continue to make available to the other, and to other Governments, such equipment, materials, services, or other military assistance as the Government furnishing such assistance may authorize and in accordance with such terms and conditions as it may agree. The furnishing of any such assistance as may be authorized by either party hereto shall be consistent with the Charter of the United Nations. Such assistance as may be made available by the United States of America pursuant to this Agreement will be furnished under the provisions, and subject to all of the terms, conditions and termination provisions, of the Mutual Defense Assistance Act of 1949, and such other applicable United States iaws as may hereafter come into effect. The two Governments will, from time to time,

negotiate detailed arrangements necessary to carry out the provisions of this paragraph.

2. The Government of the Republic of Korea undertakes to make effective use of assistance received pursuant to paragraph 1 of this Article for the purposes for which such assistance was furnished, and that Government will not, without the prior consent of the Government of the United States, devote assistance so furnished to purposes other than those for which it was furnished.

3. The Government of the Republic of Korea undertakes not to transfer to any person not an officer or agent of such Government, or to any other nation, title to or possession of any equipment, materials, or services, pursuant to paragraph 1, without the prior consent of the Government of the United States.

ARTICLE II

In the event that Article VIII of the Economic Cooperation Agreement between the Government of the Republic of Korea and the Government of the United States, signed on December 10, 1948, at Seoul, Korea, shall cease to be in force prior to the termination of this Agreement, the Government of the Republic of Korea will, for so long as this Agreement remains in force, facilitate the production and transfer to the Government of the United States, for such period of time, in such quantities, and upon such terms and conditions as may be agreed upon, of raw and semiprocessed materials required by the United States of America as a result of deficiencies or potential deficiencies in its own resources, and which may be available in Korea. Arrangements for such transfers shall give due regard to reasonable requirements for domestic use and commercial export of Korea.

ARTICLE III

1. Each Government will take appropriate measures consistent with security to keep the public informed of operations under this Agreement.

2. Each Government will take such security measures as may be agreed between the two Governments in order to prevent the disclosure or compromise of classified military articles, services, or information furnished by the other Government pursuant to this Agreement.

ARTICLE IV

The two Governments will, upon request of either of them, negotiate appropriate arrangements between them respecting responsibility for patent or similar claims based on the use of devices, processes, technological information, or other forms of property protected by law in connection with equipment, materials, or services furnished pursuant to this Agreement. In such negotiations, consideration shall be given to including an undertaking whereby each Government will assume the responsibility for all such claims of its nationals and such claims arising in its jurisdiction of nationals of any country not a party to this Agreement.

ARTICLE V

The Government of the Republic of Korea will, except as otherwise agreed to, grant duty-free treatment and exemption from internal taxation upon importation or exportation of products, property, materials, or equipment imported into its territory in connection with this Agreement.

ARTICLE VI

1. The two Governments will, upon the request of either of them, consult regarding any matter relating to the application of this Agreement or to operations or arrangements carried out pursuant to this Agreement.

2. The Government of the Republic of Korea will accord, to duly authorized United States representatives, facilities freely and fully to observe the utilization of assistance furnished pursuant to this Agreement.

ARTICLE VII

The two Governments recognize their mutual interest, consistent with mutual security and recovery objectives, in effective controls over the export of warpotential materials, equipment, and, insofar as practicable, technical data; and the two Governments will consult with a view to taking measures for the accomplishment of these ends.