896.51/12–3146: Telegram
The Ambassador in the Philippines (McNutt) to the Secretary of State
[Received December 30—11:50 p.m.]
1017. Department’s telegram 914, December 30.
- 1.
- Statement referred to Embassy’s telegram 1003 textually as
follows:
“In making this loan to the Philippine Government in accordance with the directive of Congress, the RFC, the State Department, and the President are all cognizant of the emergency nature of the loan, designed to meet immediate fiscal needs of the Philippine Government. The Philippine Government and the Filipino people may be assured that the terms of this loan do not represent the definitive requirements of the US Government in connection with this loan, but are merely the conventional provisions of an ordinary loan transaction. These [Page 943] terms have no specific application to the peculiar Philippine situation, but officials of the RFC felt that it would be inexpedient and time-consuming to attempt to undertake to write a loan contract exactly geared to the particular and specific purposes of this loan and the peculiar framework of Philippine-American relations. The definition of these particular conditions is part of the work which has been assigned to the Joint Philippine-American Financial Commission which will shortly depart for the Philippines to make an overall study of financial and budgetary problems in the Philippines, in accordance with the agreement reached between President Truman and President Roxas. It is the purpose of the US Government to ascertain in consultation and cooperation with Philippine officials the exact fiscal prospects of the new Philippine Government and the exact needs of that government over the next few years. It is believed that it will be necessary for the Joint Commission to consider a loan or series of loans to meet these needs. The terms of such a loan or loans will be, of course, worked out on the basis of findings and recommendations of the Commission which is expected to report within a reasonable period of time.
The provisions of this emergency loan, therefore, are purely preliminary to the formulation of the specific conditions which should apply to the broader and more comprehensive loan program which is believed to be necessary.
The US Government does not consider this loan to the Philippines or any other loans which may be granted under the terms of reference of the Joint Financial Commission to be a ‘business proposition’. It is rather part of an overall recognition of the war-time heroism of the Filipino people impelling the United States to do all in its power to help the new government, representing a people who have been for so long a part of the United States, to achieve fiscal stability. It is recognized that the devastation wrought by war makes that stability impossible at the present time.”
- 2.
- Foregoing was approved by President when I conferred with him and general tenor was approved by Allen, RFC.24 I understood copy was handed to PI or FE.
- 3.
- Since my return Roxas has approved textually.
- 4.
- Urge promptest approval for release coincident with signature and information date and hour for concurrent release here.
- 5.
- Roxas has advised Elizalde that instructions to sign loan will be sent when statement is officially approved.25
- George E. Allen, member of Board of Directors, Reconstruction Finance Corporation.↩
- In telegram 88, January 10, 1947, 7 p.m., to Manila, (890.51/12–3146) the Department stated that the explanatory statement could not be authorized, but the statement quoted in telegram 914, December 30, p. 942, was authorized for issuance.↩