GOVERNMENT CONTROL MEASURES AFFECTING NORTH KOREAN ECONOMY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R016100290001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: December 14, 2016
• Document Release Date: June 26, 2002
• Sequence Number: 1
• Publication Date: January 30, 1953
• Content Type: REPORT

Approved For Release 2002/08/14: CIA-RDP82-QP457F 016100290001-5
INFORMATION REPORT REPORT NO.
CD NO.
COUNTRY Korea
DO mwi- CIRCULATE
25X1
DATE DISTR. 30 January 1953
SUBJECT Government Control Measures Affecting North NO, OF PAGES
Korean Economy
DATE OF
INFO.
PLACE
ACQUIRED
SelfMSecurity and Business Taxes
NO. OF ENCLS.
(LISTED BELOW)
SUPPLEMENT TO
REPORT NO. 25X1
1. In September 19529-the people of North Korea were paying local "self -aecurity"
taxes ift quarterly installments. Tax rates depended on the size of the tax-
payer's income. The highest rate was 3,800 North Korean won per quarter, the
second highest was 39200 won., and the lowest was 2,000 won. Although this tax
was called a local one,, the majority of the money collected was forwarded to
the North Korean central government to defray war expenses.
2. Although these taxes were ordinarily paid in North Korean won, people living
in villages south of the 38th parallel were allowed to pay in South Korean won
if they could furnish a reasonable explanation for possessing South Korean money.
The acceptable rate of exchange for payment of taxes was 10 South Korean won
to 1 North Korean won, although the current black market rate was 7 to 1-
3- In September loyal Communists and people who cooperated with the government
could obtain tax exemptions on request. Persons who were suspected of being
out of sympathy with the government and those whose families or relatives had
fled to South Korea were required to pay higher than the regular tax rates.
Installments had to be paid on time, without exception.
4. In September in addition -to the "self-security" tax,, businessmen were also
required to pay a business tax. In March 1952 the North Korean Finance
Ministry ordered local governments to collect the business tax. This tax
CLASSIFICATION SECRET
STATE X NAVY X NSRB DISTRIBUTION CO'Se PE PAC LT
ARMY X A I R X FBI CINC. EA. 5 ; RYCO.
Approved For Release 2002/08/14: CIA-RDP82-00457RO16100290001-5
25X1
25X1
 25X1
25X1
25X1
was imposed retroactively to September 1951, despite the confusion and
disorganization. most businesses had suffered because of the war and battle
conditions. As a result of the order many small businesses were forced to
sell out or sell their equipment to meet the tax payments.
Adjustment in R tionin. b Government Order
5 On 1 October 19 2, the North Korean government issued Order Number 160 which
directed that laborers, clerical workers, technicians., and their dependents
be allowed to buy as much rice as they needed at consumers guild stores, The
price of rice at these stores was 450 won for one small malol The order
further directed that the families of deceased soldiers were to receive an
annual grant of 180 kilograms of free rice per persona
60. On 1 October 1952, the North Korean government issued Order Number 161 which
directed each farm family to set aside 180 kilograms of rice annually for each
member of the family for his own use from the yearly crop
Wage Control
In late September 1952, the monthly wages of North Korean workers, which
depended on the industries in which they were employed., were as followse heavy
industry, 3,900 North Korean won; mining, 3 700 won; electrical, 4,100 won;
chemical, 2,800 won; irrigation, 2,900 wono6 As a result of fixed wages and
inflated prices, small merchants were finding it difficult to make a living.
Approved For Release 2002/08/14: CIA-RDP82-00457R016100290001-5
25X1A
Comment. A small mal is equal to 9 liters or a little under
pounds
L Comment. According to reports from other sources., wages differ
w e y throughout North Korea, even for workers employed in the same
industry, Presumably, the source of the present report means workers who
are in the free worker category., since forced laborers' wages are much
lower than the figures reported above.
Approved For Release 2002/08/14: CIA-RDP82-00457R016100290001-5