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

811.5211B/12–1345

The Acting Secretary of State to the Secretary of the Interior (Ickes)

Washington, December 13, 1945.

My Dear Mr. Secretary: The American Consul General at Manila has reported several times since the liberation of the Philippine Islands with regard to discriminations imposed upon the commercial activity of aliens, particularly Chinese, in the Philippines. These reports have related both to the discriminatory provisions in municipal ordinances of the city of Manila, and in bills which were passed by the Philippine Congress and which have now been vetoed by the President of the Commonwealth. A copy of Report [despatch] No. 392, of September 19, 1945, entitled “Nationalization of Trade and Labor”, which discusses the pending bills, is enclosed.⁹³

The Chinese Consul General at Manila has protested to President Osmeña regarding the pending bills,⁹⁵ and the Chinese Embassy here has sent a note of protest to this Department regarding the situation of Chinese merchants, under both the municipal regulations of Manila and the bills, requesting that the seriousness of the problem be brought to the attention of the Philippine Government. A copy of this note was sent to you on October 12.

Several recent commercial treaties of the United States, the latest of which is the treaty of friendship, commerce and navigation signed with Liberia on August 8, 1938⁹⁷ (54 Stat. (pt. 2) 1739), clearly apply to the Philippine Islands and accord national treatment there as to commercial activity and the leasing of land and buildings to be used for such activity. Furthermore the immigration treaty of November 17, 1880 with China⁹⁸ (22 Stat. 826), which accords most-favored-nation treatment to Chinese merchants, has from the beginning of our administration of the Philippines been considered by the United States and the Philippine authorities to apply to the islands. Consequently measures, such as those discussed in Report [despatch] No. 392, and the Manila ordinance, restricting trade by aliens in the Philippines, or preventing them from renting the space there in which to carry on commercial activity, would seem clearly contrary to the obligations of the United States under the treaties which accord such national treatment rights. The application of such measures to Chinese nationals would also be contrary to the most-favored-nation clause of the immigration treaty of 1880. The precedents upon which these conclusions are based have been discussed in the enclosed memorandum.⁹⁹

It is recommended that, in expressing appreciation of the President’s action in vetoing the pending bills, the substance of this study be brought to the attention of the Government of the Commonwealth. It might be helpful to that Government in connection with future cases, such as the delayed enforcement of the provisions of the Manila municipal ordinance on this subject, or in case the Philippine Government should take further action discriminating against the commercial activities of aliens.

One way in which treaty rights can be protected in such cases is by an amendment stating that the discriminatory provisions shall not apply in cases in which they would be contrary to treaty obligations. Examples of statutory provisions in United States law containing such an exception are section 3420 of the Internal Revenue Code (53 Stat. (pt. 1) 414) and section 136 of the Revenue Act of 1943 (58 Stat. (pt. 1) 21). Consideration might also be given to the advisability of a suspension of any such measure, in so far as it would conflict with international obligations of the United States, under the President’s statutory authority to suspend the taking effect or the operation of Philippine legislation likely to violate international obligations of the United States.

The officers of this Department will be glad to render any possible assistance in carrying out the suggestions contained in this letter.¹

Sincerely yours,

Dean Acheson

93. Ante, p. 1223.
95. A copy of the Chinese Consul’s note of September 21, 1945, to President Osmeña was transmitted to the Department by the Consul General at Manila in despatch 504, October 17 (811B.5034/10–1745).
97. For documentation on this subject, see Foreign Relations, 1938, vol. ii, pp. 842 ff.
98. For documentation on this subject, see ibid., 1881, pp. 168 ff., passim.
99. Entitled “Treaty Obligations of the United States with Respect to Commercial Activity by Chinese and Other Aliens in the Philippine Islands”, not printed. The memorandum was prepared in the Department of State in October 1945.
1. In his acknowledgment of December 26, 1945, to the Secretary of State, the Secretary of the Interior stated: “Copies of your letter and the enclosures have been forwarded to the U.S. High Commissioner to the Philippine Islands, Manila, with the request that the substance of the study which has been made by your Department be brought to the attention of the Commonwealth Government and that the High Commissioner keep this Department informed as to any developments.” (811.5211B/12–2645)