Lot 56D527

Memorandum of Conversation, by the Deputy to the Consultant (Allison) at the Malacanan Palace, 10:45 a. m.


Participants: President Quirino
Ambassador Dulles
Ambassador Cowen
Felino Neri, Acting Foreign Minister
Colonel C. S. Babcock, United States Army
John M. Allison

[Page 881]

After the usual courtesies, President Quirino began by expressing the hope that the United States would not be so interested in working for the rehabilitation of Japan that it would forget the needs and rights of the Philippines. The President indicated that the Philippine people believed that their interests were being neglected at the expense of Japan and he emphasized the necessity of the United States making a wise choice between the Philippines and Japan. Mr. Dulles stated that he did not believe it was correct to talk about a question of choice between Japan and the Philippines. He said that everything that the United States was doing in Japan and elsewhere was in the interest of the common good and that our efforts in bringing about the rehabilitation of Japan were not caused by love of the Japanese but rather were due to our belief that a stable and healthy Japan would he to the interest of all in this part of the world. Mr. Dulles explained that in his opinion Japan is one of the key areas desired by the Communists and that if the industrial potential and the manpower resources of Japan were added to the Soviet and Chinese Communists the Philippines would be in grave danger. It was therefore in the interest of the Philippines as much as anything that the United States was pursuing the policy designed to insure Japan’s adherence to the cause of the free world.

[Here follows a portion of the memorandum which is printed on page 152.]

At Ambassador Cowen’s request, President Quirino then explained the Philippine attitude concerning reparations from Japan. This, together with the question of security, was the chief point of interest to the Philippine people in any Japanese peace settlement. President Quirino referred to the terrible suffering inflicted on the Philippines and maintained that it was absolutely essential that in some manner the Japanese be made to pay for all the damage and suffering they had caused. President Quirino recognized the difficulties involved in determining what the exact amount of reparations should be and suggested that a beginning might be made on the same basis as had been used in determining war damage claims. It was not quite clear exactly what the President had in mind though apparently he had some belief that it should be possible for Japan to make good at least those portions of claims which it had not been possible to meet under the war damage settlements. He insisted that it was absolutely necessary in view of Philippine public opinion that at least some payment be made even if the total damage estimated at eight billion dollars could not be recompensed.

Mr. Dulles expressed great sympathy for the desires of the Philippines and stated that there was no question that if it were only a matter of justice and equity that the Philippines should receive reparations. The United States, he said, is sympathetic with the Philippine [Page 882] viewpoint but it has not been able to discover the way by which reparations could in practice be paid. The problem of transferring Values from one country to another is extremely complicated. Mr. Dulles outlined at length from his own experience the difficulties encountered after the first world war in obtaining reparations from Germany and also the new schemes which had therefore been developed after the second world war, at Potsdam and Yalta, and in connection with the Italian treaty which had also proved fruitless. There is only one way, said Mr. Dulles, to obtain reparations from a country like Japan which is deficient in natural resources and must import large quantities of raw materials and that is to create a surplus between the necessary imports and the possible exports so that this surplus can be be used for reparations payments. Japan on the contrary has a deficit at present, and will for some time to come, and it has been necessary for the United States to make up this deficit in order that there will not be large scale starvation and unemployment in Japan with the consequent danger of encouraging Communist agitation. Mr. Dulles emphasized again that American support for Japan was not a question of liking but rather one of facing realities and due to the recognition that if Japan through economic disasters should fall a prey to Communism it would be a threat to the peace of the whole Pacific area.

President Quirino said he recognized many of these facts and that the Philippines was not asking for its pound of flesh. However, he expressed the opinion that it was not merely a matter of sentiment or justice but that it was also a matter of need and he said that since the end of the war economic rehabilitation had progressed faster in Japan than in the Philippines and that in the opinion of the Philippines it was only just that Japan out of its relative prosperity should be forced to contribute something to the rehabilitation of the Philippines. President Quirino did not demand any immediate payment but suggested that any payments might be spread over a period of years or that the United States might make a guarantee that at some time in the future reparations payments would be made. The Philippines would be ready, President Quirino said, to work in the future with Japan as they realized that neither Japan nor the Philippines could be moved from the Pacific to the Atlantic and that therefore in the long run they must work together. However, in order that a proper climate might be created it would be necessary for some form of reparations to be worked out. Mr. Dulles reiterated that it was really a practical problem and that so far all the studies made by the United States had indicated there was no effective way in which any reparations on a substantial scale could be paid but he added that if the [Page 883] Philippines could suggest any reasonable alternative the United States would certainly be willing to consider them carefully.

The conversation then turned to territorial and security problems and President Quirino emphasized the deep interest of his country in the future of Formosa and expressed disagreement with what he understood would be the United States’ position that the future of Formosa should be determined in the first instance by only the Big Four. President Quirino intended that the Philippines should be a party to any determination of the future of Formosa and that in his opinion some form of United Nations trusteeship might be the most satisfactory solution. Mr. Dulles stated that the original position of the United States had been tentative only; that the United States would certainly wish to consider carefully the views of the Philippine Government on this matter and that he too had long been of the personal opinion that a United Nations trusteeship might be the best solution. However, the Chinese Nationalist Government was completely opposed to any such solution and it would therefore be useful to seek some other formula and in this regard the suggestions of the Philippine Government would be most welcome.

[Here follows another portion of the memorandum which is printed on page 152.]

President Quirino then asked the opinion of Mr. Dulles as to the likelihood of a third world war in the near future and whether or not it was really necessary to begin preparing for such a conflict. Mr. Dulles said that while he did not believe war was inevitable and while the situation was probably somewhat better today than a few months ago, nevertheless it was necessary for the free nations to make strenuous preparation for it would only be as a result of their building up strong forces-in-being that war might be averted. Mr. Dulles expressed the opinion that the Soviet leaders did not wish all out war as they feared the retaliatory power of the United States and its allies but that they would continue through indirect aggression and through satellite operations to attempt to gain their ends and that if the rest of us did not remain strong and unified we would fall individual victims to Communist imperialism. However, if we did work together and continued to increase our economic and military strength, Mr. Dulles is hopeful that all out war would not come.

In closing Mr. Dulles again emphasized the deep interest in the Philippines of the United States and the fact that our whole program for Japan was designed to bring about a situation where the Philippines would not again be subject to the dangers of aggression from any source.1

  1. Later that same day the Dulles party left the Philippines for Australia.