[Enclosure]
The United States High Commissioner in the
Philippines (McNutt) to the President
of the Commonwealth of the Philippines (Osmeña)
My Dear President Osmeña: As mentioned in
my letter of this date13 relating to the appreciation for your vetoes of
the bills for the nationalization of labor and retail trade
expressed by the Acting Secretary of State, I wish both at his
direction and on my own responsibility to invite your attention to
two remaining measures of discrimination against foreigners in the
Philippines: (1) Manila city ordinance No. 2898, August 28, 1941
which excludes foreigners from renting market stalls, and (2)
Paragraph 5 of Department of Justice [Page 867] Circular No. 14, August 25, 1945 which
prevents the registration of deeds which transfer assign or encumber
to an alien any right interest or title to real property.
The Department of State informs me that these provisions are in
conflict with treaties between the United States and foreign
countries applicable to the Philippines. It is believed that the
contravening provision of Department of Justice Circular No. 14 is
based on an interpretation of Section 123 of Commonwealth Act 141 as
amended, but this circumstance does not afford satisfactory
justification. If the interpretation stands, it only serves to place
the statutory provision itself in conflict with the treaties. A note
of the Department of State, “Treaty Obligations of the United States
with Respect to Commercial Activity by Chinese and Other Aliens in
the Philippine Islands” is enclosed14 with this letter. Attention is specially invited
to the first paragraph and to the conclusions of the note.
There are other cogent reasons for immediate remedy. The Department
of State reports that the United States Government hopes to
negotiate a commercial treaty with the Philippines which would grant
on a mutual basis the right to lease land for designated purposes
and provide that American nationals, corporations and associations
shall have the right to acquire, own and dispose of real property in
the Philippines. This treaty is inherent in the provisions of the
Bell Bill now pending which also provides valuable trade preferences
for the Philippines. I must frankly state that if the Philippine
Government anticipates that Americans legally resident in the
Philippines shall after independence enjoy less rights than are
commonly granted in the foreign treaties and commercial conventions
between the United States and friendly countries, the Department of
State and the Congress should be so informed.
It must be further considered that the President will in the near
future invite foreign governments to agree to recognize the
independent Philippines. Foreign governments who so agree will
desire to enter into most-favored-nation treaties with the
independent Philippines. If the Philippines should decline to enter
into such treaties, it may find it difficult to obtain protection
and fair treatment of its nationals and products. Moreover, it
appears doubtful whether the Philippines could retain its position
as one of the United Nations should it follow a policy of
discrimination against foreigners.
The organic act respecting the Philippines provides that the foreign
affairs of the Philippines are under the direct supervision and
control of the United States. Measures which discriminate against
aliens are foreign affairs. To implement this provision, the organic
act provides that the President has authority to suspend the
operation [Page 868] of any measure
which in his judgment will violate international obligations of the
United States. The Acting Secretary of State has suggested that
consideration be given to the advisability of invoking this
provision if necessary to remedy the remaining Philippine measures
of discrimination against aliens.
Personally, I prefer that the remedy be applied through Commonwealth
executive action. I understand that the Commonwealth Department of
the Interior has control over city ordinances, and that the
Commonwealth Secretary of Justice may revoke the provisions of his
Circular No. 14. I must request, as I hereby do, that you proceed
without delay to take the needed action. I am requesting Captain
Ehrlich, Legal Adviser of this office, to present a copy of this
letter to the Commonwealth Secretary of Justice, and to offer him
his assistance in drawing up the remedial documents which, if you
desire, may be submitted to the Secretary of State for his comment
prior to issue. Will you please instruct the Commonwealth Secretary
of Justice to work with Captain Ehrlich as steadily as possible
until the task is completed?
Sincerely yours,
