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Theaters were important cultural institutions in Korea after the nation’s liberation from the Japanese rule. Promoting the eradication of the remnants of Japanese colonialism and the construction of a democratic national culture, Korean intellectuals argued for the nationalization of theaters and the creation of a national theater. However, their opinions clashed with those of the U.S. Army Military Government in Korea (USAMGIK), and the attempts to nationalize the ownership of International Theater and turn it into a national theater were frustrated during the U.S. occupation of Korea. Initial plans to nationalize theaters were thwarted due to the USAMGIK’s biased administrative proceedings to support the Central Motion Picture Exchange (CMPE). Similarly, the second attempt also failed when the USAMGIK made an arbitrary decision to transfer the rights to the International Theater to Seoul and the building was turned into the official residence for the mayor of Seoul. As a result, a national theater was established only in 1950, two years after the government of South Korea was founded. Through this process, culture professionals and private organizations such as theater associations criticized the administration’s actions at various levels, and many discussions were brought to the fore. Performing arts groups led by theater organizations and film organizations continued to insist on the nationalization or collectivization of theaters and the establishment of a national theater. To the people in the cultural sector, theaters were not only educational institutions but also the foundation on which true Korean culture was to be developed in line with the founding of new Korea. Based on this general idea, different areas of culture changed their emphases in different circumstances. The cultural group that placed a particular emphasis on the construction of a national theater and the public nature of theaters consisted of theater professionals. Under the banner of a new culture, theater groups were competing with American films and commercial plays in the theaters of Gyeongseong. They were becoming more and more weakened due to the waning popularity of stage theater. On the other hand, film groups found themselves in a situation where production itself was impossible, let alone the discussion about screening spaces. Consequently, the most urgent problem for the film groups was the expanded establishment of state-owned film studios and cinemas across the nation. Meanwhile, the Seoul Theater Association, led by theater managers, advocated an adequate harmony of commercial viability and enlightenment. The members of the association agreed that theaters had to answer the call of the times and build national culture, but the theater was fundamentally a commercial space to them. They argued that, since theater managers had a reasonable mind for operating businesses, they needed to be in charge of the theaters to maintain the balance between the public who wanted entertainment and culture professionals who advocated the formation of a national culture. Most of such discussion, however, were rejected by the USAMGIK and barely reflected in policies. Primarily, the USAMGIK’s theater policy was based on the U.S. foreign policy and the policies the U.S. Indo-Pacific Command, led by Douglas MacArthur, implemented in the U.S. occupied Japan. As a result, the policy lacked adjustments or considerations for Korea’s situation or the sentiments of the Korean people. The lack of understanding of the public role of theaters, rejection of the approval to establish a national theater, and unilateral support for the CMPE’s distribution of American films were the main problems in the USAMGIK’s policy. Due to the biased policy and administrative practices of the USAMGIK, the establishment of a national theater proceeded with difficulty, and the purpose of and plans for a national theater were also significantly reduced, resulting in the limited role of the theater as an educational institution for theater professionals and a performance space for high art.