811B.5034/5–2145
The Consul General at Manila (Steintorf) to the Secretary of State
[Received May 29.]
Sir: I have the honor to refer to my telegrams No. 99 of April 16 [17] and No. 111 of April 19, 1945,85 and also to Mr. Richards’ Report No. 1 of April 5, 1945,86 incorporating the text of an Order covering the licensing of foreign firms in the Philippine Islands.
This problem has two main phases, one covering the issuance of permits for the operation of public markets and stalls, and the other dealing with general business licenses.
In the case of the public markets and stalls, it was not felt that the Order in question involved any serious discrimination against alien business, since in accordance with a law passed in August, 1941 and [Page 1222] approved by the Department of State, the licenses for operation of such markets and stalls were to be confined exclusively to Filipinos after a period of three years. Inasmuch as more than three years have actually elapsed, the Chinese holders of such licenses might properly be eliminated.
Chang Ka Fu, the Acting Consul for China, made representations concerning this matter, both to the Commonwealth Government and to this Consulate General. His contention was that the Chinese operators did not in fact have the three years’ period of grace, since during the greater part of the time they were operating under Japanese control and, furthermore, the elimination of the Chinese holders of licenses to operate stalls at this time would work a severe hardship owing to the destruction of Manila. The first contention was extremely dubious, since the Chinese did in fact occupy the market stalls throughout the puppet regime. There is a certain amount of justification for the second contention, although a practical remedy for the situation has been hampered by the fact that the stalls formerly occupied by the Chinese dealers in the public markets had already been auctioned to Filipino nationals.
I refrained from giving any definite assurances to the Chinese Consul, and insisted that the negotiations be conducted by him with the Commonwealth authorities. However, I did take the matter up informally both with the Commonwealth officials and various Army officials, particularly those dealing with civil affairs. After somewhat prolonged negotiations, assurances were obtained from Secretary Confesor that the Chinese stall holders would be permitted to operate for a period of at least six months, and possibly until the end of the present year.
The matter of requiring a period of 90 days before issuing general business licenses to other than Filipino and American firms constituted direct and deliberate discrimination, which was aimed primarily at the Chinese merchants but affected all foreign firms. The matter was extremely delicate in that public announcement had been made concerning this policy, and revocation of the order would involve serious “loss of face”. Secretary Confesor, who issued the order, was obsessed with the idea that the Chinese, Spanish and British-Indian firms had collaborated with the Japanese and, therefore, should be punished. As a result of representations made primarily through Army channels, Secretary Confesor finally agreed to suspend indefinitely the effectuation of the whole order and to the elimination of the 90–day clause, without any public announcement on the matter. He agreed, furthermore, to grant temporary licenses to all aliens who had applied for licenses prior to April 5, 1945, and to start immediately in acting on the heavy backlog of applications for licenses on the part of alien firms.
[Page 1223]It is believed that this constitutes a satisfactory solution of the problem, the only remaining danger being with respect to administrative discrimination, particularly unusual and unreasonable delay in acting on applications of foreign firms.
The matter is still being followed closely, and the Department will be kept advised concerning future developments.87
Respectfully yours,
- No. 111 not printed; but for summary, see footnote 84, above.↩
- Entitled “Distribution of Consumers’ Goods in Manila”, not printed. J. Bartlett Richards was Consul at Manila.↩
- In airgram A–174, June 21, 1945, the Acting Secretary of State advised the Consul General at Manila that the Department was “in entire accord with the action taken” as set forth in despatch 58 and telegrams 99 and 111 and was “also in entire agreement with your view that the problem has been satisfactorily settled provided the program outlined by Secretary Confesor is carried out without administrative discrimination.” (811B.5034/5–2145)↩