896.51/11–1546: Telegram
The Acting Secretary of State to the Ambassador in the Philippines (McNutt)
us urgent
679. For McNutt. Re presentation to Phil Emb of draft agreement for loan transmitted by previous cable,6 Gamboa7 and Baretto expressed disappointment stating they had hoped for long term loan and accrual of interest payments until 1950. It was explained to them that draft agreement was based upon recommendations by National Advisory Council after careful consideration.
Dept recognizes Phil Govt will probably share views expressed by Gamboa and Baretto and question possibility of repayment at maturity. Suggest that in discussion with Roxas you can point out that this problem will undoubtedly be evaluated by Phil Amer Fin Comm and that its recommendations should assist in solving it. Request that any publicity regarding this loan be in form of joint press release.
With respect to mechanics of concluding Agreement and making funds available, RFC states that it will accept signature of the Agreement and the promissory notes by any official or officials of the Philippine [Page 929] Embassy, provided that RFC receives by cable through the Dept the exact text of a document, signed by the chief legal officer of the Philippine Republic (understood to be the Solicitor-General), and transmitted to you under covering note by the Secretary of Foreign Affairs, stating that Agreement and notes when signed by specified official or officials will be fully binding upon Phil Govt. Signature of Solictor-General should be authenticated by Secretary of Foreign Affairs, and hitter’s signature and seal should be authenticated by an American Consular officer. The original of the document should be forwarded to Dept by air-pouch, so that photostatic copy can be supplied RFC for its files. Authentication of specimen signatures mentioned in Article VIII (a) can be handled by Dept here.
Telegram 831, November 26, from Manila, reported a letter of appreciation from the Philippine Foreign Office for U. S. willingness to cancel the abaca fiber agreement and also the copra and coconut oil agreement (611.9631/11–2646). On December 6 the Department of Agriculture issued a press release regarding the cancellation of the agreement on copra and coconut oil (896.6158/11–546).