White House Press Release, Statement by President Harry S. Truman

64 # 504 IMMEDIATE RELEASE FEBRUARY 7, 1946 STATEMENT BY THE PRESIDENT I have today indicated my disapproval of an Act recently passed by the Philippine Commonwealth Congress providing for the validation of payments made in Japanese "mickey mouse" money during the period of the Japanese invasion of the Philippines. I have written a letter to Commonwealth President Sergio Osmena stating, in part, that "it is my considered opinion that if this Act should become law, it would tend to retard rather than to advance the economic rehabilitation of the Philippine Islands and would offer neither relief nor protection to loyal citizens of the Philippines, the United States, or other allied countries who were deprived of valuable rights and assets by the Japanese authorities during invasion of the Philippines". The bill passed by the Commonwealth Congress clearly affects the currency of the Philippines and therefor cannot become law without my approval under the terms of the Tydings-McDuffie Act and the Philippine Constitution, of which the Tydings-McDuffie Act is a part. The Commonwealth Act which I am now disapproving would give legal approval to transactions and payments made under the brutal Japanese regime, without regard for the actual value of the Japanese- backed currency in which such payments were made. It would give offi- cial sanction to acts by Japanese officials in forcing the liquidation of businesses and accounts of loyal Filipinos, Americans, and allies who were imprisoned by the Japanese. It would have a most harmful effect on the Philippine financial structure which it is our hope and desire to see strengthened in preparation for independence. It would work to the benefit of persons who did business with and under the Japanese to the prejudice of those who were loyal both to the Philippine Commonwealth and to the United States Government. On October 26, 1945 I issued instructions to the Secretary of the Treasury and the United States High Commissioner dealing with the problem of the Japanese fiat money. I stated in part "while it would be against the public interest to validate completely these contracts and settlements (made during Japanese invasion with Japanese-backed currency), a measure is needed to serve as a standard for judgments between debtors and creditors. United States High Commissioner Paul V. McNutt, in consulta- tion with U. S. Treasury officials, with Philippine and American business leaders and with Commonwealth officials, worked out such a standard. The Philippine Congress rejected that proposal and enacted a measure in effect validating certain invasion payments. I do not know what motives actuated the Philippine Congress in taking this step, but I cannot properly discharge my responsibilities to the people of the Philippines without disapproving this Act. The United States has the implacable obligation of preparing the Philippines for independence and of helping to preserve that inde- pendence. That implies our assistance in measures for the restoration of the Philippine economy so tragically ravished by war. During the short period in which our sovereignty remains in the Philippines, we must move swiftly to secure the Philippine financial structure in every way possible. Because the good faith of the United States is involved in the soundness of Philippine currency until independence, I cannot sanction measures which in my opinion, and the opinion of my advisors, undermines that currency and gives validity to acts of our common enemy. Commissioner McNutt has strongly recommended that I take this action. Secretary of the Interior Harold Ickes has endorsed the recom- mendations of the High Commissioner. I regret that I am forced to dis- approve an action of the Commonwealth Government, but in doing SO I am keeping faith with the Philippine people. (OVER)