811.5211B/9–1945
The Consul General at Manila (Steintorf) to the Secretary of State
[Received October 2.]
Subject: Nationalization of Trade and Labor.
Sir: I have the honor to report that the current session of the Philippine Congress has under consideration bills providing for the nationalization [Page 1224] of retail trade and for the nationalization of labor. Both of these measures restrict participation to Philippine nationals subject to the proviso that citizens of the United States are exempt from the law. Present indications are that both bills will be approved during the present session.
Attention is invited also to my telegram No. 584, August 29, 1945 concerning a ruling of the Secretary of Justice which will restrict ownership of all classes of property to Philippine nationals, including business and residential property which were formerly excluded from the nationalization clauses of the Philippine constitution. It may be noted also that the agitation against the Chinese holders of licenses to operate stalls in public markets has again been renewed despite the ruling by President Osmeña that Chinese stallholders were to be permitted to continue their operations until the end of 1946.
All of these measures are symptomatic of the present trend toward extreme nationalization in the Philippine Islands. The measures are aimed primarily against the Chinese merchants but there is also considerable resentment against Spanish and British-Indian merchants. It is quite obvious that these measures would affect all alien residents of the Philippine Islands with the exception of citizens of the United States who are either specifically excluded or automatically exempt under provisions of the Philippine constitution.
The underlying reasons for the present nationalistic trend are (1) there is to some extent a real and spontaneous resentment against alien domination of Philippine resources which has been in existence a long time but has grown as a result of war experiences and resentment of alien profiteering during the Japanese occupation; (2) to a large extent the movement has been supported and encouraged by the Roxas88 group for purely political ends. Roxas is shrewdly capitalizing on the age-old resentment of the Filipinos against the Chinese merchants to enhance his popularity with the masses and possibly sponsored the two bills mentioned, in the hope that President Osmeña would be compelled to veto them on the grounds that they constituted international discrimination. The Roxas group could then say that Osmeña, who is half Chinese, was supporting the Chinese at the expense of native Filipinos.
Mr. M. L. Tuan, the Chinese Consul General, is very much disturbed over the present discrimination and persecution of Chinese residents and in a recent informal conversation stated that he was protesting these measures to the Chinese Embassy in Washington and that he was prepared to recommend that the Chinese Consulate General in Manila be closed in protest and that the protection of [Page 1225] Chinese interests be turned over to the Government of the United States.
In the course of a recent conversation with President Osmeña I pointed out the unfortunate implications of the proposed legislation and stated that in my opinion it would be prejudicial to the best interests of the country to indulge in unbridled nationalism at this time. I said that although American interests are specifically excluded from the provisions of these laws we must be concerned over the trend towards Philippinezation of all aspects of the country’s economy and feel that the campaign might be extended to the United States after independence. I said that I felt that at least it would have the effect of discouraging long-term American investments in the Philippines since capital is notoriously sensitive to influences of this sort. I ventured the opinion that it was unwise to antagonize China which was a good neighbor and customer. The Chinese merchants in the Philippines in my opinion provide an important and in fact an essential element of Philippine economy. The aspirations of the Filipinos towards greater participation in retail trade were entirely commendable but this should be attained through their own efforts possibly with constructive assistance from the Commonwealth Government and not through discriminative punitive legislation.
President Osmeña expressed entire agreement with my statements and said that he greatly deplored the present campaign which he felt was primarily a cheap political means of arousing the masses and thereby obtaining votes. President Osmeña said that he was not in favor of either of the laws but was noncommittal concerning the action which he would take on them. He intimated that a veto might have unfortunate political effects while this type of legislation does not require prior submission to the President of the United States before becoming law. There was some inconclusive discussion of the possibility of action by the President of the United States under the interim provision of the Philippine constitution which provides that the “President of the United States shall have authority to suspend the taking effect of or the operation of any law, contract, or executive order of the Government of the Commonwealth of the Philippines, which in his judgment will … violate international obligations of the United States”.
It was quite apparent that President Osmeña had reached no definite decision as to vetoing these measures and was unwilling to make any commitment concerning suspension of operation of these laws by the President of the United States.
There can be no doubt that the proposed laws do in fact constitute direct and deliberate discrimination against Chinese and other alien residents of the Philippine Islands. The Department may wish to [Page 1226] decide whether the measures do constitute a violation of the international obligations of the United States and if so what action should be taken.
Respectfully yours,
- Manuel A. Roxas, President of the Philippine Senate and announced candidate for the Presidency of the Philippine Commonwealth.↩