Moscow Agreement. After repeated sessions of the Joint Commission a deadlock was again reached in July, the Soviet Delegation returning to its position of the previous year and the American Delegation insisting upon the implementation of the formula set forth in the Marshall-Molotov letters, which guaranteed wide-scale participation of Korean democratic parties and social organizations in consultation and freedom of expression of opinion by all Koreans. Further meetings of the Commission having produced no results, Secretary Marshall addressed another note to Foreign Minister Molotov on August 12, requesting that the Commission submit by August 21, 1947, a joint status report or that each Delegation submit separate reports. No reply having been received to this note and the Soviet Delegation refusing to participate in a joint report, the American Delegation on August 20 transmitted a unilateral report to Washington. Since the receipt of this report, the Secretary of State has addressed identical notes to China, the United Kingdom, and the Soviet Union proposing a Four Power Conference for a settlement of the Korean situation. China and the United Kingdom have indicated their willingness to participate in such a conference. The Soviet Union has declined. Internally, the Korean problem has been complicated by the Soviet establishment of a Communist state in North Korea and by its encouragement of the activities of Communist and Communist-dominated organizations in South Korea hostile to the United States. * * * * * The rightist groups are probably the best organized parties in South Korea. They command a majority of the Korean Interim Legislative Assembly and, if elections were held under present conditions would gain control of any government established in South Korea by such elections. The American authorities in South Korea are endeavoring to turn over to the Koreans as rapidly as possible administrative responsibility in the various departments of the United States Military Government, have organized a half-elected and half-appointed Korean Interim Legislative Assembly, and in general are striving to carry out a policy of “Koreanization” of government in South Korea. _Military Government Directive and Steps Taken to Implement Same_