796.5/3–2151: Telegram
The Ambassador in the Philippines (Cowen) to the Secretary of State
2848. Melby from Cowen. I did not intend convey implication in reftel that I was reversing position which I took in Mar 6 ltr and expressed in conversation with you prior my return Manila. While Secretary Magsaysay has been doing exceptionally good job as Secretary Def and has we understand expressed desire use army in interests clean election next Nov, I still incline to view we shld attempt increase US influence over Phil armed forces (Embtel 2800 Mar 161 Deptel 2130 Mar 16).2 We wld not wish push such program at expense [Page 1521] weakening embarrassing or alienating Magsaysay; on other hand, while Quirino’s removing him wld deal heavy blow to confidence in his own administration, we cannot base policy on assumption Magsaysay will certainly retain his present post indefinitely. While we must continue use carrot and stick as instruments policy results thereof—as you suggest—are achieved slowly and painfully. I think one important alternative instrument is employment carefully-chosen personnel not merely in top advisory jobs, but also at lower levels. I think for instance that we shld move faster on getting numbers advisers at work in middle levels Phil Govt tax collection agencies: I am told few men already here are having engage such tasks as scrounging filing cases and having bundles tax-returns, which were gathering dust in helter-skelter piles, untied and arranged in alphabetical files. Obviously a few top level advisers are not enough—they cannot begin to advise until situation can be brought into some kind of order and assessed. I have impression one of reasons Hobbs has been getting better results than his predecessors is because he has been having his men go out to the provinces in order come to direct grips with the similar problems of the Phil mil establishment.
Use budgetary aid as another means increasing our influence over Phil Govt is more complicated business and I shld feel better about it if I knew all available facts and if we examined pros and cons now, rather than after decision made. Some of considerations which have been troubling us were outlined our reftel. Another which we did not mention relates your remark that Hobbs considers our extension budgetary aid as one-time operation: so long as we continue series onetime operations Phil Govt will postpone unpleasant business of standing on own financial feet. Moreover, proceeding to question of implementation, I wonder to what extent such extension aid wld actually give us additional influence or control and what mechanics wld be. As far as I can see, it wld require grave considerations indeed to make us shut off financial aid part way through program of such assistance. It seems to me chief way in which aid might serve as useful lever wld be by giving us voice in determining what money shld be spent for. Thus if Phil Govt agreed to and we financed program under which all provincial police and civil guards were incorporated into armed forces and brought under army discipline, result shld be favorable to govts program gain support civilian population in troubled areas. It might also prove helpful—if carried out soon enough—in improving chances for honest elections next Nov, both because army wld be less likely be misused than those police and because with larger armed forces at his disposal Secretary Def wld probably be able spare some troops for protecting voters next Nov. Of course there is always possibility that we wld be disappointed in those expectations through stalling by President, employment by provincial auth just before [Page 1522] elections of temporary special police, misuse by local auth of town police or by other means.
I also wonder how we wld translate dol aid into pesos required meet expenditures such as troop pay and maintenance; I assume aid wld need tke form increased US imports if inflationary results are to be avoided.
Whatever the objections raised to budgetary aid, I wld be unwilling accept responsibility for decision which resulted in Phil Govt being forced let troops go unpaid. However, I think we will not want merely accept Romulo’s say-so on this and I am asking Treas Attaché study question of govts ability financially support its present and planned mil establishment now and in months immediately ahead. Treas Attaché advises that on basis incomplete data and on basis lengthy discussion with Cuaderno3 Mar 20 Phil Govt probably will be able finance prospective mil and other expenditures until Sept or Oct without recourse new bank loans; if so need for US budgetary aid obviously not immediate. However, Treas Attaché wishes complete more intensive study this problem before making definite assertion foregoing expects to do so two or three days. Incidentally, if Treas is using balance payments situation as argument against aid, it seems to me be most unfair. We persuaded Phil Govt inaugurate drastic controls as precondition for aid and I fail see how we can now turn around and use argument of favorable balance achieved thereby as reason for withholding that aid. This connection it shld also be recalled that favorable balance was achieved by denying Phil economy essential goods such as replacement parts for machinery and tracks so that position is much like that of man who builds up his bank balance by not paying his bills.