363. Memorandum From the Director of the Office of Philippine and Southeast Asian Affairs (Young) to the Assistant Secretary of State for Far Eastern Affairs (Robertson)1


  • Town of Olongapo and Subie Bay Naval Reservation
[Page 607]

As you know, a controversy has arisen in the Philippines between Ambassador Ferguson and Admiral Goodwin as to the steps which we should take to settle the question of control by the Navy over the 50-60,000 Philippine residents of Olongapo. President Magsaysay is apparently greatly disturbed at the political problems raised by our administration of a Philippine town of this size and has been insisting through his representative, Felino Neri, that the town must be put under something approximating Philippine control.

The Navy has felt, and continues to feel, that it must retain effective control over the town’s administration, with particular regard to security and sanitation, if it is to maintain effective security for the entire base. When the question was first raised by the Philippine press about two months ago, Admiral Goodwin agreed with the Ambassador that an investigation of the press charges should be conducted and cooperated fully with the Ambassador and Ambassador Neri in a preliminary examination of the problem. As a result of this examination, a “waiver fee”, which amounted to a residence tax, was abolished by the Navy and certain other changes were made. In addition, a Board of Navy officers was convened at Admiral Stump’s direction which has now completed preparation of a voluminous report containing, we are told, more than seventy recommendations for further action to improve the town’s administration and to increase participation by Philippine residents in town government. This report is now being studied by Admiral Goodwin, who will put into effect those recommendations which he feels he can, and will disapprove or refer to CINCPAC and the Navy Department those which he feels are beyond his competence.

Ambassador Ferguson believes that we must substantially satisfy the requests of the Philippine Government in regard to Olongapo, apparently because he fears that to do otherwise would produce an adverse public reaction which would affect our relations with the Philippines in general and our proposed bases negotiations in particular. For this reason he has suggested in telegrams to us2 which have been distributed to the Navy that we give consideration to physical removal of the town to a site outside the base and that, alternatively, we consider turning over administration of the town to the Philippine Government. We believe informally that the Navy is correct in insisting upon full administrative control over a town located exactly in the middle of its major operating facility in the Philippines, and do not believe that the United States should bear any part of the extensive cost of replacing the town, but continue to feel [Page 608] that we must await formal expression of the Navy’s views on these questions before taking a formal position.

The Olongapo question has aroused high feeling in the Navy, and Mr. Sebald received yesterday a memorandum from Admiral Smedberg which sets forth CINCPAC’s views.3 In a discussion which Mr. Bell and Mr. Cuthell had with the Admiral and his staff yesterday afternoon we were able to reach substantial agreement as to the content of an instruction commenting on the Embassy’s recommendations.4 This instruction is now being prepared jointly at the working level in State, Defense and Navy. The first three pages of the memorandum are, however, so intemperate and abusive5 of the Ambassador and the Department, that I feel we cannot accept them. Further comment of this sort from CINCPAC or from the Navy will serve only to make impossible the Ambassador’s working relationship with the interested officers of the military establishment and will be most unhelpful in producing a settlement either of the Olongapo question or of the whole military bases problem. I understand that Admiral Stump plans to call on you while in Washington at the end of this week and suggest that you express this view to him.

The memorandum in question is attached.6

  1. Source: Department of State, Central Files, 711.56396/9–2155. Secret. Drafted by Cuthell.
  2. This opinion is expressed in telegram 114 from Manila, July 13, not printed. (Ibid., 711.56396/7–1355)
  3. Dated September 21, not printed. (Ibid., 711.56396/9–2155)
  4. Smedberg summarized this discussion in an information memorandum prepared on September 22. (OASD/ISA Files, FMRA Records, Philippines)
  5. A marginal notation on the source text by Young at this point reads: “This I feel strongly.”
  6. Not attached to the source text and not found in Department of State files.