May 21, 1936

Called on Dr. Victor Clark at the Manila Hotel; he is the new economic adviser to this government. He is employed by the Library of Congress of the United States. A great traveler and observer. He is well-balanced, but perhaps a little timid. Has been here before for several visits. He now advises the Filipinos to be cautious is asking for amendments to the Tydings-McDuffie law, and adds that they may get amendments in Congress they do not want. He asked me particularly about the Rice and Corn Corporation–whether all the sales could not be taken over by one organization; I called attention to the fact that most of the rice mills and sales agencies were in the hands of the Chinos. He also told me that formerly he had been disinclined to pay any attention to “chatter politics,” but he had seen them come true in Manchukuo and in Abyssinia. He added that if the Filipinos did not develop Mindanao, some cub reporter today might suggest that that island is just what the Japanese need, and in the end they might get it. I told him of Quezon’s extreme preoccupation with this problem.

Acting High Commissioner Weldon Jones called me to his office to present his report (which I asked for on January 27th!) concerning Colin Hoskin’s proposition that the Philippine Government should purchase silver at 45 cents with some of their dollar deposits in the United States and thus make millions by seignorage. Jones had come to a definite conclusion in opposition. He said the world was too unsettled for such a move, and that any tampering with the currency in the Philippines would alarm businessmen here. He declared the Philippines must not be put on a “silver basis,” since silver is too fluctuating in value as a commodity, and the world is “moving away from it.” He added that China has just gone off silver and has joined the dollar exchange. We then discussed the possible effects of this latter move upon the Japanese. I expressed regret that England’s strenuous attempt to bring China into sterling exchange had failed. The Chinese are sticking like leeches to us, hoping to embroil us with Japan, and England is now willing to have America pull the chestnuts out of the fire; our trade with China is not worth it; Japan has already started a counter-block by setting up local customs houses in the North China block–charging only one-fourth of the standard Chinese duties, and thus intending to flood China with Japanese goods, and so threaten the stability of all loans to China held by foreigners.

Bridge in the p.m. with Nazario, Tobangui and La O.

Big dinner at the Manila Hotel given by Mr. and Mrs. Tommy Wolff as a despedida for Don Andres Soriano who is off on a visit to St Jean de Luz. Both Soriano and Colonel Hodsoll told of telephone conversations by wireless in the last few days with Juan Figueras in Biarritz!

Talk with Benito Razon just back from the United States. He had been recently with a group of Americans who expressed disapproval of the apparent change of heart in the Philippines over independence since the passage of the Tydings-McDuffie law; that this change was no doubt due to the same influence which was causing America to withdraw from activities in the Orient–i.e., the power of Japan; that the demand for free markets for the Philippines in America was based on unfairness of the sanctions in the Tydings-McDuffie law by which America keeps her free market here for ten years, and Filipinos get a free market in the United States for only five years. He agreed with me that the new series of kicks by Americans against the Philippines is based on general indifference (“we never had any good reason for being there anyway”) plus an irritation that Filipinos should have preferred independence to retaining American protection.


Sunday, March 22, 1936

All day at sea and very rough–all hands more or less under the weather. Bridge in p.m. Quezon has, so far, won all the rubbers and we three are all losers.

Talk with Quezon off Panay. I asked him about Philippine sugar shares; he said they were good for dividends for ten years–even after the “sanctions” levied five years hence. He told me that the planters are counting on the continuance of free trade with the United States. I remarked that I had bought some gold shares–he commented “They are good.” I said I was thinking of buying Shaw’s Philippine Iron Company’s shares–he said if you wait, you may be able to buy shares in a government-owned Company in Surigao–“you reserved them for the government twenty-one years ago.” I asked him if they had been recently surveyed and were as rich as we had believed? “Yes,” he replied.

I then asked about the possibility of setting up separate Filipino consulates–said he had taken it up with Secretary Hull before inauguration, and he had referred it to William Phillips. Had received no answer as yet.

Next I reported a conversation with Simmie concerning the arrastre plant. He replied that Simmie is a good man: “if I leave that business in private hands, his company will have the preference–but I want more money from it.”

Said Rodriguez would not remain as head of the National Development Co. He would send him around the world for a year to study industry and commerce, adding: “he talks too much”!

He asked me if I had talked with the High Commissioner about silver–I said certainly not; that I would not go to the High Commissioner about anything official without his instructions. I had asked Weldon Jones about it as he (Quezon) had requested and was waiting his report before making up my own opinion. Quezon said that the High Commissioner had talked with him about it.

We laughed a little over “experts” and he said he was getting one to come out here with only his travel paid.

I asked him if the United States would not give the Philippines the equivalent in silver even if they had refused to pay the losses on devaluation in gold. Quezon said that Morgan had formerly been ready to do this, but businessmen in Manila were carrying on with capital borrowed abroad and they are now afraid their loans would be called if silver in large quantities were introduced into the Philippines currency. He also remarked that the Philippine loss on devaluation was already more than thirty million pesos–especially when computed in terms of trade competition with Japan; he added that the present was the moment to get any benefits or concessions from the United States, before the Republicans get in.

I remarked that the Manila Bulletin was still fighting hard, against us and he replied: “They are the damndest die-hards and reactionaries I have ever seen.”

Next he commented upon Dr. Victor Clark, the financial expert of the American Congress, who had come for a few months to the Philippines as an adviser. Quezon said Clark was able to review all things dispassionately because he wasn’t even prejudiced about the Soviets, and that was the supreme test for an American.

Then he spoke of lawyers, and remarked that Clyde Dewitt was the best American jurist in the Philippines, and Jose Laurel was the best Filipino jurist.

At luncheon, on the steamer I told the President, of his daughter “Baby’s” witty reply to my comment on his speech in Zamboanga, and he sprang up and kissed her, saying; “She is a true daughter of mine.”


February 19, 1936

Colin Hoskins called with Biggars, manager of the Chase Bank at Hong Kong to discuss the possibility of the Philippines buying silver, with a large seignorage profit, and putting the currency on a silver basis, with gold credits for foreign trade accounts. Biggars advocates this and says he thinks the United States would approve; and he would be glad to see a solvent nation going on silver. Said the United States had driven a very hard bargain with England on silver.

In p.m. at work at office on a speech for tonight. Saw Quezon for half an hour–in his pyjamas after siesta, and looking tired, but in his usual vitally active mood. I told him I had suggested to Unson before the latter saw him the setting up of a budgetary bureau within the framework of the Act creating the Survey Board on the reorganization of the Government–let the Survey Board serve for 2-3 years or until they had finished a scientific standardization &c. Let the members of the board plan the consolidations etc., for immediate use. He said “Oh! I thought that was Unson’s own idea.” The President wants me to work with the board.

Then I took up the subject of Landlord & Tenant and he said no special session was to be called. Told him the more I went into it, the more suspicious I was of the existence of a racket on part of both landlords and tenants–he agreed, and said he must have some plan by which the small man would get his lands–and to beat the speculators. I told him two of the Friar Estates were on 60-90 year lease to outsiders, and that these lessees were demanding 1-2 million pesos for their interests–we must put penalty taxation on all estates larger than 1000 hectares, to squeeze them.

Then I told him of my morning’s talk with Biggars and he at once wrote me notes to Roxas, Weldon Jones and Vicente Singson Encarnacion to consult them on this subject.

Then he arranged on the telephone a trip to Masbate with Andres Soriano for March 25-30, to see the mines; he invited Doria and me to come and some lady to accompany Doria. His conversation with Soriano was gay and courteous. Soriano is chartering the Negros for the trip, and Quezon begged him to go light on the food, so as not to threaten “mi ulcera de estomago.” Quezon also fixed up with the Japanese consul dates for the trip to Davao, April 1-10, inviting Doria and me to accompany him on the Arayat.

Quezon Said he was tired and needed recreation, so we arranged for two bridge games.

He told me of his speech to the executive chiefs at Malacañan that morning; telling then how he had been getting all the credit for their work, and while this satisfied his vanity it hurt his sense of justice, and if anything went wrong he would get all the blame!

I spoke that evening before the Foreign Relations Club of the University of Manila–good audience and it went off well. Constitution Day. The Dean (Gallego) in introducing me referred to Quezon as the “Father of the Constitution” and to me as its “Grandfather” which pleased the students and brought a big laugh. Usual anemic musical program.