A consideration affecting the duration of the occupation of Korea, and hence the type of economic program, is the estimated length of the occupation in Japan. General MacArthur has indicated his desire for a United Nations, or other international administration to take responsibility in Japan soon after the peace treaty is signed. There would be obvious difficulties in any long-term occupation and rehabilitation program for South Korea, initiated at a time when the occupation of Japan was about to be relinquished by the United States. Apart from the problem of tactical forces in Japan to back up the Korean occupation, there would be communication and supply problems. There might he political objection to the occupation of liberated Korea after the termination of occupation in defeated Japan. The United States Military Government in Korea has recommended a five-year rehabilitation program starting in July, 1948, and requiring U. S. financing for a deficit of $647 million. The estimates indicate that the proposed rehabilitation of the Korean economy would cost more per year for the first three years, than the relief program of $137 million which was tentatively approved for fiscal 1948, but reduced in July, 1947, to $92.7 million. A feature of the proposed rehabilitation program is an expenditure of $35 million to provide a chemical fertilizer industry and the supporting power installations, roughly duplicating the installations in North Korea which formerly supplied the fertilizer needs of South Korea. An additional amount of approximately $85 million is included in the five-year rehabilitation program to cover the cost of fertilizer imports, pending the completion of the plants. Other items in the program are investment in coal mining to provide low-grade anthracite for briquetting, and to provide for the development and reconstruction of the transportation, textile and fisheries industries. There is no assurance, however, that (_a_) $35 million fertilizer industry would meet the estimated requirements, or reach capacity production in the time allotted. The suitability of low-grade anthracite dust as the basic energy source for a considerable industrial establishment in South Korea has not been tested, and (_b_) there are no reliable estimates of the reserves of this fuel, and no evidence of this fuel, and no evidence that the mines and railroads could be developed to fit the prescribed time schedule. In the event that it is decided to continue a one-nation occupation of South Korea for some years, the least costly program would be one designed to provide, not capital goods, but raw materials and fertilizer in sufficient quantity to stabilize the economy at a satisfactory standard of living as measured by a prewar Japanese and potential North Korean living standards. In this way, the risk of an experiment in industrialization without resources would be avoided.