Office of the Historian

896.51/7–2646: Telegram

The Secretary of State to the Ambassador in the Philippines (McNutt)

confidential
us urgent
Washington, July 26, 1946—7 p.m.

110. For McNutt and Hoflich from SecState and SecTreas: Please thank President Roxas for data submitted through your office66 in response to our recent request. With respect to application for budgetary loan, please inform President Roxas National Advisory Council on International Monetary and Financial Problems agreed that Congress should be urged to authorize Sectreas to extend credits not exceeding $75 million to Philgovt at such time or times before July 1, 1947 and upon such terms and conditions as Sectreas with approval of NAC shall deem warranted by financial position of Philgovt.67 Congressman Bell introduced in House and Senator Wagner in Senate legislation along these lines but authorizing credits up to total of $100 million. Sectreas, Secstate and NAC supported bill but recommended authorization be limited to $75 million. House Currency and Banking Committee has reported favorably on legislation, [Page 901] with amount reduced to $75 million and minimum interest 2 percent.

NAC has further agreed on desirability of establishing Joint American-Philippine Commission to consider financial and budgetary problems of Philippines and make recommendations to two governments. Report such commission considered basic to consideration longer run aspects President Roxas request for budgetary assistance.

Action of NAC in recommending $75 million based mainly on analysis of income likely to be received in fiscal 1947 from US Govt but not reflected in budget estimates. Possible receipts from sales surplus property not included in this analysis (Emb’s 72, July 1868).

Regarding application for Export-Import Bank loan NAC does not approve consideration by Eximbank at present of a credit to Philippines, but Eximbank not precluded by this action from consideration of extension of exporter credits which may require Philgovt guarantee. This is Treas cable No. P.I. 128.

Byrnes
  1. Telegram 41, July 12, not printed. It was supplemented by telegram 83, July 20, 10 a.m., not printed.↩
  2. In telegram 177, August 9, 6 p.m., to Manila, the Department advised that such a loan had been authorized in Public Law 656, approved August 7 by President Truman; the Reconstruction Finance Corporation was to handle the loan (896.51/7–3146).↩
  3. Not printed.↩