Foreign Relations of the United States, 1946, The Far East, Volume VIII

896.24/9–346: Telegram

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

restricted

Manila, September 3, 1946—4 p.m.
[Received September 3—6:12 a.m.]

288. Following agreement reached with Roxas, Petersen,⁷³ McCabe:⁷⁴

1. Estimate present fair value surplus property in Philippines approximately 147,000,000.

2. Of this 100,000,000 to be delivered to Philippine Government under section 205 Philippine Rehabilitation Act.

3. Of balance of approximately 47,000,000; 10,000,000 to be reserved for sale to Korea or elsewhere to meet existing commitments.

4. Remaining 37,000,000 to be transferred to Philippine Government together with $25,000,000 cash against its agreement to (a) assume liability for emergency currency advanced by local government entities to US forces before Corregidor surrender, (b) Assume liability for all outstanding guerilla currency, (c) Purchase or expropriate and transfer title to US of real estate required for diplomatic, consular and other official use to value $3,000,000. (d) Expend over a period of years $2,000,000 for cultural exchanges.

5. Estimated outstanding emergency currency $5,000,000 guerilla currency issued total about 60,000,000. Realizable value 37,000,000 fair value residue surplus property problematical. Considering these factors believe foregoing agreement highly satisfactory to US. Equally advantageous to Philippines as it provides immediate cash, leaves proceeds sales surplus in the country, avoids use dollar exchange.

6. Details agreement on these principles to be worked out locally.

7. Congressional leaders will support these proposals and enact requisite legislation.

McNutt

73. Howard C. Petersen, Assistant Secretary of War.
74. Thomas B. McCabe, Foreign Liquidation Commissioner and Special Assistant to the Secretary of State.