Harry S. Truman Presidential Library & Museum

Public Papers
Harry S. Truman

View by Month and Year

Search Public Papers
Enter keyword:
Limit by Year
To    :

Limit results per page
You can search the Public Papers in two ways:

1. View by Month and Year
Select the month and year you would like information about and press View Public Papers. Then choose the Public Paper in that month and year, and the page will load for you.

2. Search by Keyword and Year
You can also search by keyword and choose the range of years within your search by filling out the boxes under Search Public Papers.

Provided courtesy of The American Presidency Project.  John Woolley and Gerhard Peters. University of California, Santa Barbara.
  31. Statement by the President Upon Disapproving a Bill of the Philippine Congress  
February 7, 1946

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 Osmefia 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 therefore 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 official 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.1 I stated in part "while it would be against the public interest to validate completely these contracts and settlements (made during Japanese invasion with Japanesebacked currency), a measure is needed to serve as a standard for judgments between debtors and creditors."

1 See letter to the Secretary of the Treasury in the 1945 volume, this series, p. 424.

United States High Commissioner Paul V. McNutt, in consultation 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 independence. 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 advisers, 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 recommendations of the High Commissioner. I regret that I am forced to disapprove an action of the Commonwealth Government, but in doing so I am keeping faith with the Philippine people.

NOTE: The text of the President's formal letter of disapproval was also released.

Commissioner McNutt's letter follows:
Dear Mr. President:

An enrolled copy of Philippine Commonwealth House Bill No. 647 (Senate Bill No. 51), titled "An Act Governing the Payment of Monetary Obligations Incurred or Contracted Prior to and During the Japanese Invasion of the Philippines and for Other Purposes," is herewith enclosed. This bill was passed by the Congress of the Commonwealth on December 20, 1945 during the Fifth Special Session of the first Congress, and was approved by President Osmena on January 18, 1946.

House Bill No. 647 does not provide that it shall become law upon approval of the President of the United States, but merely states: "This Act shall take effect upon its approval." My legal adviser informs me that the bill clearly "affects currency" and, accordingly, fails within the provisions of the Tydings-McDuffie Act and of the Ordinance appended to the Philippine Constitution. Therefore, in my opinion, it cannot take effect unless approved by you. I so advised President Osmena in writing, and in reply he stated: "In connection with House Bill No. 647 which I signed yesterday, I wish to inform you that if you feel that this measure should be submitted to the President of the United States for final action, I would have no objection to your doing so."

It is strongly recommended that House Bill No. 647 be not approved, for the following reasons:
1. It will validate all payments made in Japanese fiat pesos during the Japanese invasion on obligations incurred prior thereto and will deny to injured parties the right to contest in the courts and validity of such payments.

2. It will benefit enemy collaborators and subjects of the Axis Powers; will ratify certain acts of Japanese liquidators, and will offer neither relief nor protection to many loyal Filipinos, American citizens, and citizens of allied countries who were deprived of valuable rights and assets by the Japanese authorities.

3. It will ratify various acts of banks and other institutions, including the government-owned Philippine National Bank, whose operations were controlled and directed by the Japanese authorities, which were inimical to the interests of many citizens of the United Nations.

4. It will make insolvent life insurance companies which operated in the Philippines under the direction and control of the Japanese authorities by validating the payment of obligations due such companies and the acceptance by them of Japanese fiat pesos in the prepayment of premiums and for the purchase of annuities and paid-up policies, which will result in material loss to persons who had policies in force with such companies prior to the Japanese invasion.

5. The enactment of this debtor-creditor legislation will validate acts of the invader benefiting collaborators, which will retard the economic and political rehabilitation of the Philippines.
Respectfully yours,
Provided courtesy of The American Presidency Project.  John Woolley and Gerhard Peters. University of California, Santa Barbara.