Foreign Relations of the United States: Diplomatic Papers, 1945, The British Commonwealth, The Far East, Volume VI

811B.5034/4–1745: Telegram

The Consul General at Manila (Steintorf) to the Secretary of State

Manila, April 17, 1945—7 p.m.
[Received April 17—3:47 p.m.]

99. Commonwealth Government has issued orders requiring all persons to obtain licenses before starting business and ordering unlicensed firms to cease operations pending issuance of licenses. Period of 90 days required for investigation of all firms other than Filipino and American. This period allegedly required to permit investigation of loyalty of applicants during occupation. Because of international implications I discussed the matter informally today with Tomas Confesor,⁸² acting head of Commonwealth Government. Confesor contends he is opposed to permitting firms which have cooperated with enemy⁸³ to engage again in business and cites emergency powers law as authority for his action. For political reasons he will not publicly admit that Filipino firms also may have collaborated with enemy although he added that a number of Filipinos has already been arrested for such activities. He said with considerable truth that many Chinese, Spanish and British-Indian firms had openly and publicly collaborated with Japanese. I pointed out that his action might be considered as direct discrimination against foreign business interests and might result in official protests by foreign powers with resulting embarrassment both to the Commonwealth and the United States which still retained authority over foreign affairs. I pointed out also that his action might be considered as an unnecessary restriction on legitimate business and also as an effort to place retail trade in hands of Filipinos displacing Chinese merchants of [for?] alleged collaboration with the enemy. Confesor is so rabidly opposed to collaborationists and so firmly committed to the plan that he can not withdraw without serious embarrassment. At my suggestion he is issuing a statement to the effect that the measure is designed solely to provide for investigation of collaborators; that no legitimate foreign interest will be affected and that all investigations will be entirely fair and impartial. The statement also will say that every effort will be made to avoid unnecessary restrictions on legitimate business. This is maximum concession that may be obtained voluntarily from Confesor. I am very much afraid there may be considerable actual injustice done Chinese retailers who will be much more affected than any other nationality showing [owing] to almost universal Filipino resentment of Chinese merchants. Also possibly some discrimination against British-Indians. Under circumstances outlined I can not take any further action without definite instructions from Department.⁸⁴

Steintorf

82. Minister of Interior.
83. For documentation on collaboration of Philippine nationals with Japan during wartime, see pp. 1231 ff.
84. In telegram 111, April 19, 4 p.m., the Consul General at Manila stated that the section of the order requiring 90 days for investigation of foreign firms would be modified shortly to eliminate discrimination and in the meantime enforcement of the order would be suspended (811B.5034/4–1945). In telegram 221, May 22, 5 p.m., to the Consul General at Manila, the Acting Secretary of State (Grew) commended his handling of the Philippine program of licensing business firms and stated “any discrimination against foreign firms would, of course, be displeasing to this Government, since as long as the United States Government retains authority over Philippine foreign affairs, most-favored-nation aspects of our treaty relations apply”. (811B.24/4–2345)