Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

Executive Secretariat Files: Lot 53D444: Secretary’s Memoranda of Conversations

Memorandum of Conversation, by the Secretary of State¹

secret

[Washington,] February 4, 1950.

Participants:	President Truman; President Quirino of the Philippines;
	Ambassador Elizalde of the Philippines; and the Secretary of State

President Quirino opened the conversation by saying that upon his return to the Philippines he would be continuously occupied with administrative matters. He thought for the duration there might not again be an opportunity to talk with President Truman. Therefore, he wished to go over several matters of the highest importance to the Philippines.

The first matter was Philippine security …² could President Truman say anything to him of a reassuring nature on this subject? President Truman stated that, as he had said and as the Secretary of State had said at the press club,³ the United States and the Philippines regarded their security as mutually inter-dependent. The United States would not tolerate an armed attack upon the Philippines. The two Governments had their peace agreement which would be loyally carried out on both sides. The President thought that these arrangements amply cared for any foreseeable contingency regarding Philippine security. President Quirino expressed himself as satisfied and gratified.

President Quirino then turned to the question of an Asian Union. He spoke of his conversations with Ambassador Romulo and Romulo’s⁴ conversations at the General Assembly with various Asian delegations. He said he was continually asked whether the United States would support such a Union. He would like to know the President’s views on the matter. President Truman said that our attitude was that we would be most sympathetic toward an Asian Union which was inclusive and which sprang from Asian initiative. He was not in a position to take any issue in the matter but was sympathetic toward it. President Quirino then said that he was contemplating steps to sound out the possibility of a Union which would include Korea, Nationalist China, Burma, Siam, Indonesia and Pakistan. President Truman inquired about the inclusion of India, Australia and New Zealand. President Quirino said he hoped these states would join later. The President then asked the Secretary what his views were on such a proposal. The Secretary said that he did not believe that the course suggested by President Quirino was the wisest one to pursue. He said that a Union without India, Australia or New Zealand would lack essential elements of strength. Furthermore, to proceed without these nations would certainly so far as India is concerned create impediments to their joining later on as Mr. Nehru⁵ was very independent and very proud. The Secretary thought that it would be much wiser to take more time and to obtain the inclusion of the three states mentioned before proceeding to establish the Union. In the Secretary’s talks with Ambassador Romulo he had gathered that there was a real possibility of accomplishing this and any procedure which diminished this hope was, he thought, unfortunate. President Quirino made no comment upon this but turned to the next subject.⁶

He said that General MacArthur⁷ had sent an emissary to him to discuss trade with Japan. President Quirino had replied that he was not in a position to discuss this matter until he knew what the future relationships with Japan were likely to be and whether or not there was to be a peace treaty and in general what its provisions would be.⁸

He also asked whether President Truman regarded Formosa as a political threat to the Philippines. On the subject of Formosa, President Truman said that he did not regard Formosa in the hands of the Communists as a threat to the Philippines. It was flanked by bases in the Philippines and Okinawa as well as by our forces in Japan. He also knew of no likelihood of our withdrawal from Japan except with our own consent.

He then asked the Secretary to comment upon the matter of the peace treaty with Japan. The Secretary said that this subject which was complicated at its best had been further complicated by the Communists’ success in China and there were two main problems to consider: the first was the problem of security; the second was the problem of the Japanese economic future. So far as security was concerned, Japan had been disarmed by the United States and, as a result, the security of the United States, of other Far Eastern nations, and of Japan seemed to the Secretary to require the presence of American forces in that area to prevent aggression. This, of course, raised the most difficult problems because it was hardly likely that the Soviet Union would agree and the treaty without the Soviet Union would raise certain difficulties. All these matters are under consideration by the Military Establishment and the Department of State and upon the return of the Joint Chiefs of Staff, Mr. Jessup⁹ and Mr. Butterworth,¹⁰ the two Departments might have recommendations to lay before the President. At present the Secretary would say no more on this subject.

So far as the economic future of Japan was concerned, Japan in the past had been dependent to a large extent for raw materials and minerals from Manchuria. From some source this relationship would have to continue. But a very important objective of policy was to enable Japan to substitute for this excessive reliance on China trade relations with the non-communist portions of Asia as well as with the rest of the non-communist world. If this could be done, not only would Japan’s ability to withstand communist pressure be increased but Japan’s interest in doing so and in maintaining its connection with the non-communist world would also be increased. The Secretary therefore hoped that President Quirino would take a sympathetic and helpful attitude toward increasing Philippine commerce with Japan.

President Quirino then turned to Philippine economic problems. He made a general and rather over-optimistic reference to what had been done and what was going to be done. In the course of this, he referred to suggestions for a devaluation of the peso. This he strongly rejected and then inquired whether this Government would be willing to consider arrangements by which a credit on the stabilization fund would be given by the United States Treasury to be used if, as, and when it was necessary to maintain the peso at its present value. The President said that he was not familiar with this situation and that it could be looked into unless it had already been considered. He asked the Secretary for his views. The Secretary said that this matter had been considered by the Treasury and State Departments in connection with the general problem of supporting the peso. The Secretary could not give President Quirino any encouragement that such a proposal could be reported favorably by the two Departments to the President.

Before mentioning the subject just referred to, President Quirino said that he was most anxious to have the confidence of the American Government in the soundness of economic steps being taken by the Philippine Government. To that end he suggested to President Truman the possibility of a United States Economic Survey Mission which might go to the Philippines and examine the entire economic situation, make recommendations and assist the Philippine Government in laying out a program which the United States could support. He said that he had been much impressed by the work of Mr. Dodge in Japan and if Dodge could head such a mission it would be most agreeable with President Quirino. At this point Ambassador Elizalde intervened to say that what the Philippines needed was not so much a mission to examine the balance sheet of the Philippine imports and exports or the Philippine governmental budget but a mission which would go into the Philippine industrial and commercial future and help establish a program under which the Philippines could develop exports which would make it self supporting.

President Truman said that he was most interested in this suggestion and thought that it deserved the deepest and most sympathetic consideration, which he proposed to give it. President Truman asked the Secretary how he suggested that the matter be pursued. The Secretary said that in his judgment the way to proceed was through consultation between President Quirino and Ambassador Cowen at Manila. In this way the terms of reference of such a survey group might be established and the personnel decided upon. The Secretary said that he would inform Ambassador Cowen of the discussion and would have the Department assist him in every way with his discussions with President Quirino.

President Quirino then asked what our intentions were in regard to recognizing the Chinese Communist and the Bao Dai Governments.¹¹ President Truman said that our attitude had been that we are in no hurry to recognize the Communists and that we wished to be very clear as to how that situation was developing before we would take any step. Such developments which had occurred were not reassuring and the President thought those nations which had jumped into recognition had found themselves in an unimpressive and humiliating position. In regard to Bao Dai, the President said that he had instructed the Secretary to proceed with recognition and asked the Secretary to comment upon the situation.

The Secretary said that after a very careful survey lasting several months we had come to the conclusion that the recognition of Bao Dai was an important step in the attempt to prevent communism from spreading in Southeast Asia. While it might be possible that the Bao Dai experiment had no more than an even chance of succeeding it certainly would not have that chance unless all the governments interested in preventing the spread of communism gave it every reasonable support. This the United States Government was prepared to do. The Secretary thought that it was of great importance that governments of neighboring states should do the same. He could think of no step by the Philippines which would be more helpful both in supporting the general policy of checking Soviet Imperialism and also in strengthening Japanese security than similar action on the part of the Philippines.

President Quirino said that he was most interested in what he had just heard; and, that he was anxious to keep Philippine policies attuned to that of the U.S. He mentioned the fact that the Soviet Union had not recognized the Philippines and that this was an added reason why the Philippines should not recognize satellites of the Soviet Union. So far as Bao Dai was concerned that matter was under active consideration by his Government and he would give it his attention as soon as he returned. He made no commitment on either point.

President Quirino asked whether President Truman could take action to increase the amount paid on the war damage claims and stated that he thought the climate in the Congress was most favorable to such a recommendation. President Truman said that while he had in the past been sympathetic to such a recommendation he felt that he could not make it at present. He said that his budget officers believed that the step was not warranted in view of United States fiscal considerations and that so far as Philippine interests were concerned he doubted whether this was the most effective way in which they could be advanced. He spoke of the possibility that money paid on these claims might not be reinvested in the Philippines. President Quirino suggested that the congressional act might require that it be so invested. The President concluded this part of the conversation by saying that in any event he was not ready to go forward with the recommendation at this time.

D[ean] A[cheson]

1. The substance of this memorandum of conversation was contained in telegram 207, February 7, to Manila, not printed. That telegram reported that a February 3 meeting with President Quirino had been purely social. On the evening of February 4 Quirino expressed to a Department of State officer his great satisfaction with the conversation with President Truman though he did not say what there was in it that satisfied him. (796.00/2–750) President Quirino and his party departed by airplane from Washington for Manila on February 6.
2. Omission in the source text.
3. Regarding the Secretary of State’s speech under reference here, see footnote 1 to telegram 195, January 17, from Manila, p. 1401.
4. Carlos P. Romulo, Philippine Representative to the United Nations.
5. Pandit Jawaharlal Nehru, Indian Prime Minister and Minister of External Affairs.
6. For additional documentation on the policies of the United States regarding regional security arrangements in the East Asian-Pacific area, see pp. 1 ff.
7. General of the Army Douglas MacArthur, Supreme Commander, Allied Powers in Japan, and Commander in Chief, United States Forces in the Far East.
8. For additional documentation on the efforts by the United States on behalf of a peace and security treaty with Japan and regarding the occupation and control of Japan, see pp. 1109 ff.
9. Ambassador at Large Philip C. Jessup conducted a fact-finding mission to various Far Eastern countries from December 15, 1949 to March 15, 1950. For documentation regarding his mission, see pp. 1 ff.
10. Assistant Secretary of State Butterworth served as chairman to the Asian Chiefs of Mission conference held at Bangkok; for documentation on the conference, see pp. 1 ff.
11. For papers on the attitude of the United States toward the recognition of the Communist regime in mainland China, see pp. 256 ff. For documentation on the question of the recognition of the Viet-Nam Government of Bao Dai, see pp. 690 ff.