Memorandum by the Secretary of State to President Truman


The Philippine Trade Bill (H. R. 5856) will probably come to you for signature within a few days.22

The provisions of the bill for eight years of free trade and twenty years of declining preferences are not very different from the agreement which was reached at your conference of November 13 with Mr. McNutt, Senator Tydings, Representative Bell, Mr. Fortas, Mr. Clayton, and myself.

In view of the urgent necessity for legislation governing trade relations with the Philippines I believe that you should sign H. R. 5856. A number of its provisions, however, which were not discussed with you on November 13, are highly objectionable from the standpoint [Page 874] of our foreign policy. This Department, as well as other agencies, expressed its objections to the appropriate committees of Congress23 but for the most part was unsuccessful in having the desired changes made.

Provisions relating to absolute quotas and an internal tax preference for Philippine coconut oil are conspicuously inconsistent with central elements of our recently published Proposals for Expansion of World Trade and Employment 24 which were sent to all Governments as a basis for the Conference on World Trade and Employment. The Department attaches the utmost importance to avoiding action which might jeopardize our position of constructive leadership in this endeavor to create a peaceful and prosperous post-war economic world.

Other provisions of the bill requiring the Philippines to grant Americans in the Philippines broad special favors and, consequently, to discriminate against all others countries, are inconsistent with our promise to grant the Philippines genuine independence and may be expected to have unfortunate repercussions on our international relations, especially in the Far East. Important Philippine officials and the Philippine press already have reacted strongly against such provisions and the Soviet press has cited them as an example of the “rising tide of reactionary forces” in the Anglo-Saxon countries. While rights of Americans should, of course, be fully protected by appropriate treaties on the same basis that exists with respect to other independent nations, it is unfortunate that we should insist upon a highly privileged position for Americans in the Philippines in the future when we protest strongly against such policies which discriminate against Americans in other countries.

It is therefore suggested that you may wish at the time you sign the bill to make a general statement, which would leave the way open for possible future remedial action, along the following lines:

“I am grateful to the Congress for its splendid response to my request for speedy enactment of legislation on our future trade relations with the Philippines, and I am in agreement with the general principle of the bill for an interim period of free trade to be followed by a period of declining trade preferences. I must point out that there are a few provisions in the bill which cause me some concern and may at a later date need reconsideration. I am, however, signing the bill in order to bring into immediate effect those provisions which, [Page 875] independently of the anticipated Executive agreement, would establish a legislative basis for the economic rehabilitation of the Islands.”25

James F. Byrnes
  1. The Philippine Trade Act of 1946 was approved as Public Law 371 on April 30; 60 Stat. 141.
  2. See the statement of April 3, 1946, by Assistant Secretary of State Clayton, Philippine Trade Act of 1946: Hearings before the Senate Committee on Finance, 79th Cong., 2d sess. (Washington, Government Printing Office, 1946), p. 49.
  3. Issued in November 1945 as Department of State Publication No. 2411 (Washington, Government Printing Office).
  4. For statement by President Truman released by the White House on April 30, see Department of State Bulletin, May 12, 1946, p. 822.