740.00119 PW/8–146
Memorandum by Mr. Leonard C. Meeker, Assistant to the Legal Adviser (Fahy)25
Philippine Reparations
1. Reference is made to your communication of October 5, 194626 concerning interpretation of the Philippine Rehabilitation Act of 194627 and the question of standing to claim reparations from Japan on account of damage to Philippine property.
2. As a matter of international law, and in the absence of any statute such as the Philippine Rehabilitation Act of 1946, probably either the United States or the Republic of the Philippines could claim against Japan for reparations on account of Philippine war damage. The United States, as sovereign in the Philippine Islands during all of the time in which damage occurred, could make and establish a claim, applying the proceeds of such established claim to restitution in the Philippines.
In the alternative, the Republic of the Philippines would also have standing to claim against Japan for reparations. Some precedent for such action is to be found in Article 190, Annex II, Section 2 of the Treaty of St. Germain-en-Laye (1919)28 and in Article 174, Annex II, Section 2 of the Treaty of Trianon (1920).29 These treaties, with Austria and with Hungary, provided for representation of Poland on the Reparation Commission of the Allied and Associated Powers. [Page 581] Poland is described in the preamble of the treaties as one of the Allied and Associated Powers. Article 178 of St. Germain and Article 162 of Trianon provided that there should be compensation from Austria and Hungary “for damage done to the civilian population of the Allied and Associated Powers and to their property during the period of the belligerency of each as an Allied Associated Power” against Austria and Hungary “by the said aggression”, etc. The period of Poland’s belligerency against Austria and Hungary occurred while Polish territory was a part of the Russian Empire.
The case of the Philippines for separate standing to claim reparations is even clearer. The Commonwealth of the Philippines declared war on Japan, and maintained a government-in-exile at Washington after complete Japanese occupation of the Philippine Islands. During the period of the Pacific War the Philippine Commonwealth had what amounted most nearly to dominion status, achieving sovereign independence after the war on July 4, 1946.
The Philippines were represented, as was India, on the Far Eastern Advisory Commission, a ten-power body organized after the Japanese surrender. The Philippines are now represented on the Far Eastern Commission—successor to FEAC—which was organized as an eleven-power body pursuant to an agreement reached at Moscow on December 26, 1945. In the case of both Commissions the principle of “one country, one vote” has been agreed and adhered to. While the sphere of action of the Commissions has been largely political affairs, this indicates no reason why the Republic of the Philippines should not have independent standing in the matter of reparations to be paid by Japan.
3. The question then arises as to how the Philippine Rehabilitation Act of 1946 affects the question of reparations to be claimed against Japan on account of war damage to Philippine Property.
The Act does not specifically provide that the United States shall claim reparations from Japan on account of war damage to Philippine property. Nor is it believed by the Office of the Legal Adviser that the Act by its terms and provisions implies that the United States should claim such reparations.
It will be noted that the statute in question expressly excludes from compensation by the Philippine War Damage Commission large classes of war damage to Philippine property. Act of April 30, 1946, Pub. No. 370, 79th Cong., §§ 102 (a), (b); 103; 110.* It may be observed [Page 582] from some of the provisions of the Act itself that Congress’ purpose was not so much to compensate for Philippine war damage in general as it was to initiate measures for early rehabilitation of the Philippine Islands’ economy. Id.,§§ 104 (b), (c); 106(c); 111. This character of the Philippine Rehabilitation Act is made entirely clear by the House of Representatives Committee on Insular Affairs report on the rehabilitation bill recommending passage. H. Rep, No. 1921 (79th Cong., 2d Sess.) pages 8–9, 13, 17–18, 25–26. In short, the Act sets up machinery to guarantee the Philippine economy a fixed minimum of resources for effecting rehabilitation in the relatively near future. It should be viewed as such a guaranty or insurance-type measure of limited comprehension and scope rather than as a statute to settle the questions of Philippine reparations generally.
The Act appropriates money from the Treasury and authorizes the use of United States surplus property (plus property that may be received from Japan under specified circumstances) to effect Congress’ rehabilitation purposes. The Act is not addressed to the problem of securing reparations from Japan. The question of the machinery for obtaining and distributing reparations from Japan for Philippine over-all war damage is not dealt with by the Act. Section 106 (b), (c) reflects the existence of uncertainty and lack of crystallization on these questions by use of the expressions: “Any money or bullion received by the United States from the Japanese Government or the Japanese people …”, “any other property received …” (underscoring supplied).
It is believed that the claiming of reparations by the Republic of the Philippines against Japan would be consistent with the purposes and intention of the Philippine Rehabilitation Act of 1946. The Act does not purport to limit the authority of the Philippine Government to claim reparations, or to require the Philippine Government to apply any reparations it may claim and receive to any particular purpose. While section 106(b) (1) of the Act provides that the United States, out of any money or bullion received by the United States from Japan for Philippine reparations, shall reimburse itself for outlays made under Titles I and III of the Act, the statute does not provide that the United States shall secure any reimbursement from other property received by the United States from Japan on account of reparations. Congress omitted to make such a provision although the Department of State recommended it in a letter of March 8, 1946 to the Committee on Insular Affairs.30
Congress also did not provide for the contingency of the Republic of the Philippines claiming and receiving reparations from Japan. [Page 583] Questions would then arise whether the United States should seek reimbursement for its outlay under the statute before total satisfaction of all Philippine war damage claims (estimated at $800,000,000 to $1,000,000,000), or should seek reimbursement if the amount of reparations received by the Philippines exceeded the difference between American outlay and total Philippine war damage, or should seek reimbursement only if reparations received by the Philippines exceeded the amount of all war damage, or should not seek reimbursement at all.
While the act is silent on these points,† the principle of reimbursement, particularly out of money or bullion, would be consistent with the general purposes of the Philippine Rehabilitation Act. Under these circumstances—unless specific guidance is furnished by additional Congressional legislation—any scheme of reimbursement would have to be arranged by agreement between the United States and the Republic of the Philippines. The position of the Department of State in such negotiations would be determined by considerations of American policy toward the Republic of the Philippines, of the practical problems which reimbursement might raise for the Philippine War Damage Commission in its administration of the Rehabilitation Act, and of the indication by Congress in the Rehabilitation Act favoring a policy of reimbursement out of money and bullion. Since the amount of money and bullion that may be received as reparations will be very small, this last consideration should not offer any substantial problem to the United States negotiators.
- Addressed to Norman T. Ness, Director of the Office of Financial and Development Policy, and to Monroe Karasik, Special Assistant to the Director, Office of Economic Security Policy; copy transmitted in instruction 111, November 15, to Manila, as the opinion of the Legal Adviser.↩
- Not printed.↩
- See telegram 132, August 1, from Manila, p. 560.↩
- Treaties, Conventions, etc., Between the United States of America and Other Powers, 1910–1923 (Washington, Government Printing Office, 1923) vol. iii, pp. 3149, 3206.↩
- Ibid., pp. 3539, 3593.↩
- Section 106(d) emphasizes the fact that the Act’s coverage of war losses is only partial, and is declaratory of the proposition that Philippine property-losers not covered by the statute are not deprived of any other remedies they may have without the Act. The phrase “any claimant” in section 106(d) refers to persons (natural, corporate, or public) who have sustained damage in their capacity as property-holders, rather than to a claimant in the international sense of sovereign seeking reparations. [Footnote in the original.]↩
- Addressed to Jasper Bell, Chairman of the House Committee on Insular Affairs; not printed.↩
- The committee reports and Congressional debates make no reference to reparations received by the Philippines and reimbursement therefrom. [Footnote in the original.]↩