895.52/12–1649
Memorandum by the Assistant Secretary of State for Far Eastern Affairs (Butterworth) to the Secretary of State
Mr. Wells’s statement that the Korean Government has done nothing to put the land reforms into effect since the land owners are among the main supporters of the Government, is substantially correct.1
A Land Redistribution Law applying to large Korean landholdings (some 1,800,000 acres) was passed by the National Assembly on [Page 1111] April 27, 1949. This law aims to convert over two million farm families into owner-operators and reduces the amount of land under tenant farming in Korea to less than 10 per cent of the total cultivated land, as contrasted with 73 per cent in 1945 and 40 per cent at present. Under this law, the Government is to purchase lands from landlords against the equivalent in cash of 150 per cent of one year’s production and transfer ownership to the tenant by collecting a total of 125 per cent of one year’s crop at an annual rate of 25 per cent of each year’s production of the principal crop over a period of five years.
In June, 1949, President Rhee vetoed the Land Redistribution Law and on June 21, 1949, the National Assembly overrode his veto and the law was promulgated by President Rhee on June 22,2 although opposition within the Korean Government has caused a delay in setting up the necessary machinery to implement this law in time for the 1949 rice harvest.
Amendments to the Land Redistribution Law submitted by the Assembly Committee on Industry now under discussion in the Korean National Assembly would increase the landlords’ compensation from 150 per cent to 240 per cent and extend the period of compensation from five to eight years. The expectation that the land reform law will be implemented has exerted a downward pressure on land prices. Tenant farmers in many cases are permitted to purchase their farms at less than half their current market value since landlords are desirous of selling at sacrifice prices. Article 10 of the law authorizes the Government to give landlords “priority for participation in enterprises contributing to the development of the national economy.” The Government plans under this article to give landlords a priority right to purchase formerly Japanese vested residential and industrial properties.
The Assembly at its recent session failed to pass the budget for the implementation of the land reform law; however, President Rhee has authorized expenditure of 100 billion won to initiate the program.
The American Mission in Korea which includes the ECA Program has repeatedly made representation to the President of Korea stressing the urgent need for implementing the Land Redistribution Law and plans are now being discussed jointly by State–ECA to press for the implementation of the law in time for the 1950 rice harvest. However, it is difficult to find a method whereby landlords may be equitably compensated without seriously aggravating the already critical inflationary situation in the country.
The Department is also studying this problem in connection with an instruction to Ambassador Muccio now being prepared setting forth [Page 1112] the specific economic reforms he should urge the Korean Government to undertake.3
- Mr. H. B. Wells of the Office of United Nations Political and Security Affairs made the statement at a meeting with Mr. Acheson on December 13, according to a memorandum from Mr. Lucius Battle to Mr. Carlisle Humelsine on the following day (895.52/12–1449).↩
- An English text of the law is printed in U.N. document A/1881, p. 49.↩
- See instruction 90, to Seoul, December 30, below.↩