August 31, 1945, Friday

I have been asked many times how the Japanese financed themselves during their regime.

They came here bringing with them Japanese military notes. It can be assumed for certain that those notes are not backed by reserves. There is nothing behind it except the backing of the Japanese government. As a matter of fact, they are not currency or money. They are in reality requisition slips. Instead of forcing the Filipinos to give them food, equipment and materials, they found this indirect and less painful way of attaining their wishes. At the beginning the circulation of the currency of the Commonwealth was allowed. Following the economic law that bad money drives away good money, the latter soon disappeared in the market. Later, the Japanese made the circulation of the currency of the Commonwealth illegal. Those caught exchanging military notes for Commonwealth notes were taken to Ft. Santiago and punished for committing a hostile act.

The Japanese government then established the Southern Development Bank. They did not use the two Japanese banks, the Yokohama Specie Bank and the Taiwan Bank, except that the Taiwan Bank was used to liquidate the American and other foreign banks. As a matter of fact, the Southern Development Bank was not a bank but acted as a branch here of the Japanese Government Treasury. It was given the sole power of note issue. All the military notes were distributed through it. I had numerous discussions with the Japanese as to the nature of these notes. They have always insisted that they were Southern Development Bank notes, whereas I always maintained that they were Japanese Government notes. I did not feel it proper for the Philippine Government to deal with a private bank.

The Japanese, unlike the Americans, practically made the countries occupied by them defray all the expenses of their Army. They did this by means of the issuance of military notes. I also have no doubt about this as I happened to see the Japanese Government budget. In the statement of income, there was included what was called Contribution of the Southern Islands. (I was not sure what they called it, but I am sure that there were billions — 17 billion as I remember — provided as income from the Southern Islands.) As there was no direct request for funds, necessarily they must come from the proceeds of the military notes. They cannot ask for direct contribution because nobody or very few would give. This was shown when subscriptions were opened for the Philippines to buy and donate an airplane to Japan. Very little was collected and the project was stopped. It would not have been possible to collect a sufficient amount to buy even a small airplane unless force was used, as was done in many cases. As a matter of fact, those military notes were no more, no less than requisition slips. The whole financing of the Japanese, including the expenses of the Army and Navy and what they called war development companies, was exclusively handled by the Southern Development Bank.

This bank made every effort to exercise all the powers of a Central Bank and of a clearinghouse. It insisted that all the other banks deposit their funds with it, especially the reserves of the banks. I opposed this very strongly. I was willing to stake even my life to uphold my view. All the bank managers naturally were afraid to have any sort of issue with the Japanese. I told them that they need not assume any responsibility. I gave them orders not to deposit with the Southern Development Bank without my express authority and order. At that time, there were already on deposit in the Southern Development Bank funds of the different banks amounting to about 1000,000,000 pesos. About three-fourth or four-fifth of the funds belonged to the Philippine National Bank.

It must be stated in this connection that at the beginning I had no supervision over the Philippine National Bank. Supervision was being exercised by Malacañan. The reason was that the P.N.B. was a government corporation and Malacañan was in charge of all national companies. Later, I found out that it was Executive Secretary Pedro Sabido who was handling P.N.B matters. Even after his appointment as Minister of the new Department of Economic Affairs, he attempted to continue exercising the powers; as a matter of fact, after his appointment, he became even more insistent. He contented that the supervision of the Philippine National Bank properly belonged to his department since the bank was a government corporation and his department was in charge of all government corporations. He further contended that the Department of Economic Affairs should control the Philippine National Bank to enable it to realize the purpose for which it was established and also to facilitate the financing of the national companies.

Finally, he contended that, under the law, the Secretary of Finance is already the head of the bank, and it is not proper nor advisable for the Secretary of Finance to be also the Supervisor; otherwise; the Secretary of Finance would be supervising himself. I refused to devote much time and words to the discussion which was academic. So far as I was concerned, the argument I emphasized was that I found it impossible to supervise the banking and financing business unless all the banks were under me. Supervision over the P.N.B. was especially necessary since at least 70% of banking transactions in Manila was handled by the Philippine National Bank. I concluded in a memorandum to Pres. Laurel that if he decided to deny my request, I would strongly recommend that the supervision over all banks be transferred to the Ministry of Economic Affairs. After due consideration, the President told me that he fully agreed with me and he would immediately issue an order accordingly.

Days and weeks passed, the order did not come. I found out that the Minister of Economic Affairs was very insistent. So the President decided to submit it to the Council of State composed of Chief Justice Ramon Avanceña as President, and Don Miguel Unson, Don Pedro Aunario, Don Rafael Corpus, Don Ramon Fernandez and Don Jose Paez. The Council considered the matter very thoroughly and even heard the arguments of Minister Sabido. The President, and this was confirmed later by Don Miguel Unson and Don Rafael Corpus, advised that the Council upon preposition of Don Miguel Unson, decided unanimously in my favor. He assured me that he would issue the order forthwith.

Days passed; weeks passed, no order came. I decided to prepare the order myself and give it personally to the President. It was not signed and issued. I prepared another and left it with the President. After a few days, I asked him about it. He was surprised that I had not received it yet. I prepared another and this time I did not leave Malacañan without the President’s signature.

After the President signed the order, I immediately called Mr. Carmona, President of the P.N.B.. I must first state that under the order, I had all the powers of the Board of Directors of the Bank. I asked him about the deposits. He told me that he had submitted the matter to Malacañan and that no objection had been expressed on the part of Malacañan to the existing arrangement. When I asked for a written authority, he advised that he had not received any and that his experience was that he got no action from Malacañan on matters taken up by him, or at least action was delayed for weeks and even months.

I asked him to explain how he happened to have such a large deposit in the Southern Development Bank. He answered that from the very beginning the military people as well as the Manager of the Southern Development Bank requested him and even ordered him to deposit all excess funds of P.N.B., or funds not needed for ordinary daily transactions, with the Southern Development Bank. Pressure was used so that he had to make some deposit, but he assured me that it was far from what he could have deposited.

The Japanese reorganized the clearing house. Under the new system, all clearing balances were kept by the Southern Development Bank. There was no liquidation and the funds could be withdrawn only when the corresponding bank needed funds. So the deposit of P.N.B. in the Southern Development Bank increased everyday. This was also true as regards the other banks, Bank of the Philippine Islands and Bank of Commerce. They were also being required to make deposits. They said that they had to conform unless they wished their banks closed and their officers accused of a hostile act. I ordered them not to deposit. When they expressed fear, I told them that they should tell the Japanese that, per my order, they had to secure my approval. I also told them to withdraw their balances in the clearing house from the Southern Development Bank.

Mr. Hariguti Takahashi and the Manager of the Southern Development Bank came to me to request me to authorize the deposits. I flatly refused. This is one of many similar incidents I had with the Japanese. One instance was when a large Japanese sugar concern wanted to acquire the Philippine Refining Co., which was owned by the government and practically had the monopoly of sugar refining in the Philippines. An official of the company was told that an unfavorable recommendation from him would be interpreted as a hostile act. I told him to tell the Japanese to talk to me. The Japanese never came to see me. Another instance was when the Japanese Army proposed that the Textile Department of the National Development Company be constituted into a separate company and recapitalized with equal participation of the Philippine and Japanese governments. The participation was later changed to 40% for the Japanese and 60% for the Filipinos. I was made to understand that the plan had already been agreed upon by somebody in Malacañan. I prepared a memorandum strongly opposing the plan. The reason I gave was that the National Development Company, as any other national companies, was formed not for profit but rather to carry out national economic policies. Another time was when Colonel Utsonomiya, later promoted to General, approached me to ask me to allow the importation of opium. I told him that the laws prohibited the importation of opium and penalized its sale. Twice the Colonel approached me. I maintained my position. When it came to protecting our people and their rights, I ignored consequences absolutely.

In connection with the banks, a Japanese officer came to see me. He said that it had been reported to them that in the Ministry of Finance, there was somebody who was anti-Japanese and always worked against them. I knew it was merely a ruse. I answered that I assume responsibility for anything done in the Ministry of Finance.

Mr. Carmona wisely did his best to attain our purpose without unnecessary exposition. Carmona was so capable and prudent that he was able to withdraw a very good portion of the deposit and to maintain the deposit at a very low level.

My views and actions were fully reported to the President and he approved.

I had many other incidents. During a bombing raid, a boat loaded with military notes was blown up and all along Malate and Ermita, it rained notes. They were picked up by the people and spent. The Japanese who had the serial numbers of the notes prohibited the circulation. I protested on the grounds that the notes were already in the hands of innocent persons. For instance, there was Mrs. Mariquita de Ocampo who sold her furniture for 7,000 pesos as she needed the money. Afterwards, nobody would accept her money. What fault had she committed? Finally, the notes were accepted.

The Japanese wanted the administration to be self-supporting. They themselves prepared and imposed the approval of tax laws. From the beginning, my plan was not to change our tax laws; not to burden the people with more taxes than what they had to pay before the war. But how do we finance the government? Of course I had to make it look like I was trying to increase the income by means of assistance of our people. So I did not object to the increase in the income tax law, although I insisted that low incomes not be taxed and larger incomes not be taxed as heavily as in other counties. This is also the reason why I sold an amount of bonds instead from where I proposed to get the money.

Even during the time of the Commission, we borrowed money from the Army, It reached the amount of ₱23,000,000. During the Republic, I secured a credit of over ₱100,000,000 from the Bank of Japan, about ₱50,000,000 of which I got through the Southern Development Bank. When I submitted it to the Cabinet, there was some opposition. I did not argue, but after the meeting I explained to Minister Osias who was the one strongly opposed that my purpose was to charge to the Japanese as much of our expenses as possible. The Japanese Army after the establishment of the Philippine Republic tried to collect our previous indebtedness of ₱23,000,000. I declined on the ground that the Executive Commission was a mere instrumentality of the Japanese Administration. The amount was never paid.

Returning to inflation, I could do nothing as the Japanese did not want to give any power which would enable me to do something. I thought and thought about what to do until I came up with the idea of establishing a Central Bank if I could get the Japanese to approve my conditions. Some of them were: (1) That the Central Bank shall have the sole power of issue of notes. With this I meant to curb the unbridled issue of notes by the Japanese and the unlimited grant of credits to Japanese companies. (2) That the Ministry of Finance shall have jurisdiction and power of supervision over the Japanese banks. I demanded this most important power to control large credits given by the Japanese banks to Japanese companies and nationals. (3) That the Central Bank shall be the depository of the reserves of the other banks. And (4) That the Central Bank shall handle the clearing house balances.

The Japanese were opposed to my plan at the beginning, but in view of the fact that we were a Republic and they therefore could not openly deprive us of the right to exercise powers belonging to all independent states, they changed their tactics. They instead did their best to delay the establishment of the bank. They put up all kinds of objections and suggested many modifications. They wished preferential treatment or at least equal treatment for Japanese banks. I could not of course accept this. Mr. Haraguti, while I was speaking before the National Assembly about the establishment of a Central Bank, sent me a memorandum. I got the impression that he was opposed to it or wanted to delay it. I immediately suspended the proceedings and charged that Mr. Haraguti was out of line. He immediately saw me and tried to explain that such was not his intention. I know English well, I believe, and I had no doubt that my interpretation was correct.

The bill was approved by the Assembly but upon the request of Speaker Aquino a provision was inserted to it so that the establishment of a Central Bank would depend upon the promulgation order by the President. Aquino at the beginning was strongly opposed to the bank; later, he withdrew his objection but was evidently not interested in its establishment. However, the Japanese had not given up. We had no facilities here for the printing of notes and this had to be done in Japan. We prepared the necessary designs. We were told that all the printing presses were busy printing notes for other countries and that they could not begin making delivery until May, I believe of 1945. I went to Japan where I made every effort to expedite it but in vain. I was told that the delivery had to be periodic and the amounts for each period could not be very much. The matter remained in that state until hostilities in the Philippines began.

Another reason why I wanted the Central Bank was that I did not want to have a shortage of notes. We had a terrible crisis about the first months of 1944 because the ships used for transporting the notes were probably sunk or blown. The Japanese banks had no more available notes and the Southern Development Bank had only about ₱10,000,000 in notes of 10, 20 and 50 centavos. The Japanese banks suspended payment, and there was a run in all the banks as the public feared that the banks had no more funds. The Japanese banks, including the Southern Development Bank, wanted to get the notes of the Filipino banks. I refused to authorize the Filipino banks to loan their funds to the Japanese banks. I also instructed the Manager of the Philippine National Bank to withdraw a part of its deposit from the Southern Development Bank. We were all very much worried. Stoppage of payment of banks would paralyze business. All demands for withdrawal in Filipino banks were met. The Philippine National Bank, however, had to offer notes in small denominations. Generally, those wishing to withdraw big amounts desisted as the package of the money would be quite bulky. After a few days, shipment of notes came and the crisis passed. Because of this, I inquired about machines and materials in the Philippines that could be used in case of shortage of notes. We could print here but in limited quantities.

* * * * *

We heard on the radio that Truman had said that the Philippines might have her independence in 4 or 5 months. This means that we may have our independence by next January. I welcome it; I want to have it right now. We would have been spared the loss of billions of pesos and thousands of lives if only people ceased to be mentors of other people.

This means the election will have to be held soon. We may not even be able to take part in the elections. Until we are cleared, we cannot be of much service.

According to the radio, Ambassador Vargas was found in Tokyo and he is a very worried man. He was generally criticized for having been very weak with the Japanese. We were aware of it and we thought him a useless man and an incapable executive. But after we reflected, it may well be that under the circumstances, he did what would be of the greatest benefit to the people. Supposing that instead of getting the confidence of the known murderers, the Japanese, he had fought and defied them. He becomes a hero. But he sacrificed his country for w would have meant direct or almost direct rule by the Japanese. Instead of 200,000 dead, we probably would have had to mourn the loss of millions of our countrymen. Vargas has done much for our country.


August 1, 1945 Wednesday

Today has been declared a legal holiday to commemorate the death anniversary of Pres. Quezon. This is a very fitting tribute, Pres. Quezon will pass in history as the greatest man we have ever produced. Correctly, he can be called the father of the Philippines. He it was who was able to insure the independence of our country. He was the one that did most to implant democracy in this country. His love for the masses, for the laboring class is proverbial. It is to be deeply regretted that he died precisely when we were at the threshold of our goal — the independence of our country.

The Iwahig people, upon the invitation of the teachers, is holding an appropriate program. They have selected Mr. Quintin Paredes as the main speaker. The Colonel-Superintendent approved. But it was disapproved in Manila. And yet we are not to be called “prisoners”. It smacks of intolerance.

At times I ponder on who suffered more — those who went to the mountains or those who stayed in the towns and cities. It is true that those in the mountains experienced untold sufferings. They had to move from place to place to avoid being hunted by the Japanese. Many times they had no food and this is the reason why they sometimes had to resort to forced commandeering of foodstuffs whenever the owners are unwilling to give. Many of them became sick, some very seriously, and died for lack of doctor or medicine. But so did those who stayed in the cities and towns. Their lives too were in danger at all times. They had to watch their conduct, their day-to-day acts for fear that they might displease the Japanese or Japanese sympathizers. The mere sound of heavy boots made them tremble with fear. Their pulse beats faster when somebody knocks at their door at night. Their fears were not without proof; the fact is that thousands in the cities and towns met their death at the hands of the Japanese or their agents, or suffered the most cruel torture at Fort Santiago and other prisons. The victims were both private citizens and officials and employees of the government. Those in the cities and towns perhaps had even less food than those in the mountains because there was very little food — food being transported to the cities and towns were confiscated by the Japanese or by crooks or false agents of the law, or could only be bought at prohibitive prices. As to medicine, the stock was very limited and mostly in the hands of soulless profiteers.

I state all the above not to minimize the patriotic services rendered by the guerrillas in the mountains as the truth is that I have nothing but respect and admiration for them. I envy them for their sacrifice and readiness to give their lives for the sake of the country. What I regret very much is that I, as many thousand others, was not in a condition to follow them for obvious reasons — my family is big and composed mostly of girls who cannot possibly escape capture. What happened to the family of unknown patriot, Col. Emmanuel Borja, is a good example. He was able to flee outside the city, but then the Japanese arrested his wife and, I understand, other members of the family. He had to come back. Many of us just did not know where to go. Many of us could not be a guerrilla at all because of physical defects. I still remember many years ago when I was still young. I applied for enlistment in the National Guard which was to have been sent to Europe. I was rejected for very defective eyesight.

I can cite very many other incidents which show that our lives, those who stayed in the cities and towns, were all but rosy. There was a proclamation providing for mass responsibility and death if any Japanese was harmed or killed. In the streetcars, many were slapped for just jostling a Japanese. I remember an incident in front of my house. A “carromata” (horse rig), probably unintentionally on the part of the “cochero” (rig driver), blocked the way of another “carromata”. The passenger in the other “carromata”, a Japanese, attacked the “cochero” and almost killed him. The people gathered around wanted to lynch the Japanese. But someone in the crowd with presence of mind told them to desist as it would have meant the arrest and death of many persons in the neighborhood. We resorted to cowardice to avoid any trouble with the Japanese.

I would like to relate what our life in Baguio was like and our trek down down the mountains from Agusan, Baguio to Tubao, La Union.

Since the landing of the Americans on the Lingayen Gulf on January 9, 1945, there were daily flights of American planes to Baguio to bomb and strafe the different parts of the city. By the middle of March, bombings had become very intense. The central part of the city was almost all destroyed. Hospitals, convents, one Protestant church and the surroundings of two Catholic churches were destroyed. Many died or were wounded, especially in the bombed hospitals. The people expressed deep resentment for what we thought was indiscriminate bombing. My own experience with American planes was on January 5, when the market was strafed. I was then holding office at the Philippine National Bank, just around the corner from the strafing.

The Cabinet Hill was surrounded by military objectives. In the east were the South Road and the Teachers’ Camp (converted into a Japanese military camp); in the north, Elizalde’s compound and various private houses occupied by the Japanese; in the west was Hogan’s Alley occupied by the Japanese Marines; in the south, Baguio Auto Line (BAL), Engineer’s Hill, the Government Center and the Justice Hill. Hardly a day passed without bombings of these places. The first heavy bombing was staged by various B24’s and I actually saw the first bombs being released as they were discharged right above our house. We ran to the shelter under our house. The shelter withstood the ordeal but when nearby houses caught fire, we moved to the tunnel-shelter of Minister Sanvictores. Later, we used the shelter of Minister Jose Paez. Luckily enough, not a single bomb fell within the Cabinet Hill compound, although all the houses were full of shrapnel and bullet holes.

Since my family was very big, I decided to build our own shelter-dormitory on the eastern side of Cabinet Hill where we transferred on the 18th of March. The dormitory, built by the male members of my household including my two sons, was 2 by 3 meters with passage of 2 meters. The height was 5 feet 10 inches to the beams. The posts were of fair-sized pine trees. The sides and ceiling were of burnt galvanized iron. Near the passage we built a shaft for ventilation, but principally for an exit in case of necessity. We braced the shelter with two iron pipes so it would not collapse. We covered the shelter with about a meter and a half of earth. It was quite comfortable for sleeping.

The bombings continued. The Mansion House where the President and his family were staying, as well as Speaker Benigno Aquino, Sr. and other officials, was hit and badly damaged. When the American airmen staged carpet bombings, a bomb which would have hit squarely my air raid shelter and the adjoining shelters of Ministers Recto and Paez, exploded in the tree tops. If it had exploded on the ground, all three families would have been wiped out completely. Mr. Recto’s chauffeur was killed and my cook seriously wounded.

We got scared. We decided to walk everyday to the Catholic Cathedral to seek shelter during the daytime. But bombs fell all around the Cathedral and one of the bombs hit the road near the church. We decided that it was too dangerous for us to stay in the city and so we evacuated to a place called Irisan, in the outskirts of Baguio about 6 kilometers away. All the other Ministers also fled the city.

In Irisan, my two sons Tony and Alfredo, and my Filipino bodyguard, Venancio Llagas, built shelters in a narrow gap between two mountains — the shelters were actually caves. It would not be possible, therefore, for the bombs to hit us. My Japanese bodyguard, Mr. Ishikawa, did not accompany us to Irisan.

By this time, a big contingent of the American Armed Forces was proceeding to Manila while other forces prepared to go to Baguio and other places in the Mountain Province.

On the afternoon of the 12th of April, 1945 at about one o’clock, I decided to evacuate from Baguio because for weeks a continuous stream of people fleeing Baguio passed in front or near our shelter. In conversations with them, I came to know that they were leaving to save their lives either as a result of American air and land bombardments, or of massacres being perpetrated by the Japanese. They were all very anxious to go to the American occupied territory. Among them were men and women from all walks of life, from the poorest laborer to the richest tycoons, from a humble messenger to a very high government official. There were doctors, lawyers, engineers, nuns, priests — in fact all human activities were represented. There were newly born babies as well as persons who were visibly sick or over seventy years old who could hardly walk. I could not see how the old and the sick could make it, but I learned later that they all reached their destination after crossing steep and apparently insurmountable mountains, deep ravines, crystal-like rapid streams, thick forests. They arrived at the safety zone more dead than alive, however.

This stream of people so impressed us that we decided to take the long journey ourselves, although we had my child of 6 years, Menchu, who had been sick, and my mother-in-law, Maria de Lontoc, who was old, sickly and could hardly walk.

All our friends in the neighboring shelters, Dr. Jose de la Rosa and family, the Suntays and others, had already left and we regretted not to have gone with them. We received news that they arrived safely at their destination behind the American lines. Mr. and Mrs. Salvador Araneta, Compadre Lacson and family, Atty. Feria and many others stopped for a while at our shelter on their way to Agusan. We became more anxious to go. Two days before our departure, a massacre of about 32 occupants of 2 Igorot houses was perpetrated by the Japanese soldiers. The next day we found the places all around us deserted. I sent my son, Alfredo, to the shelter of Eugenio Lopez and they had just left without notifying us although we had agreed to go together. We inquired about Mayor Mitra and he had also fled. In the meanwhile, we noticed that fighting was getting nearer and nearer judging from the sound of cannons and machine guns. Shelling was becoming intense. Shells were falling all around our shelter. We could distinctly hear the whistling of shells passing overhead. At one o’clock, I sent my bodyguard to Minister Sison to tell them that we better leave right away. The answer came that they could not go as Mrs. Sison was sick and they were waiting for Major Leocadio de Asis who they had sent ahead to explore the way. I immediately went to their shelter which must be about 200 yards distance from my shelter. Shelling was very intense that afternoon and the shells were falling near our shelter and along the way. I had to dive to the ground many times. After almost running the whole way, I arrived on top of the hill where the shelter of Minister Sison was. Up there the explosions were louder; it seemed that the shells were falling just a few yards from us.

I proposed to Mr. Sison that we leave that same afternoon. He refused saying that his wife was sick and that he would prefer to wait for Major de Asis. I pleaded and pleaded, but he would not budge an inch. I then told him that we were leaving anyhow as I was afraid that the next day would be too late. I also told him that we had no guide but that I was sure that we would find other people fleeing on the way. Probably because shelling was becoming more intense and the shells were falling nearer and nearer, Mr. and Mrs. Sison decided to come.

I returned to our shelter and announced that we were leaving right then and there. Everybody was ready; everything we could carry had already been packed. Each of us, especially the body guard and the servants, practiced carrying our packs. All gave assurance that they could carry their respective loads. Even small Menchu had a small package. Needless to say, we were able to take very little. We left several sacks of rice, plenty of canned goods and other food provisions. We left almost all our clothing and several valises full of miscellaneous things. They were scattered in and outside the shelter as if a typhoon had just passed. We hid a little food in one of the caves and sealed the entrance, in case we should be compelled to return. We carried food only for one day as we could not carry more. We knew we had to travel at least 3 days but we were expecting to dig camotes along the way and, at any rate, we were ready to suffer hunger. We felt that all we would need was water and we had been assured that there was plenty of water along the way.

We climbed the first hill which was already steep although it was nothing compared with other mountains we had to climb later. We had a great deal of difficulty going up. When we reached the top, we realized that our packs were too heavy to carry all the way. We threw most of our load. The guard and the laundry woman, without even consulting us, left behind a greater portion of their load. It so happened that my clothes were in one of the packs. I had other clothes being carried by a small young servant girl, but they were all woolen clothes. I gave up hope of saving them because I did not believe the little girl could carry her load which was quite heavy. But to the surprise of everybody, she reached our destination without throwing any part of her load.

We went by the shelter of Minister Sison where the family joined our party, and proceeded on our way. Crossing the Naguilian Road, the trail was downhill and it was quite good. After walking about four kilometers we were stopped. On the way we were stopped by two Japanese soldiers. One of them, an officer, asked us where we were going. We told him that we wanted to escape from shells and bombs. We indicated that we were going to Amasi. He was very nice. He allowed us to proceed but warned us not to go straight ahead or turn to the right as there was fighting. He said we should take the left trail as it would be safe.

The place where we stopped and passed the night was near a Japanese patrol station. From there we could see the flash of cannons, hear the whistling of shells overhead and afterwards the sound of bursting shells. On the hillside some of our companions, mostly girls, danced and sang. We had a good sleep and the next morning, we had enough strength to proceed.

Starting our journey early in the morning at about 5 o’clock, we passed through rough trails dotted with big stones, indicating that we were walking on a river bed where a rapid stream runs through during the rainy season. Eight kilometers further, we reached the Asin road. We walked for another eight kilometers along this road where we arrived at a spot where heavy fighting had taken place. It seemed to be a dead trail. Trying to pick up the trail, we explored the area for a while and right up the road about a hundred yards from where we were, we found another trail. There could be no mistake about it; clothes were strewn all along the path. As a matter of fact, from this point on there were clothes thrown all along the trail to Pitugon. We could not possibly lose our way. We contributed our own clothes to the litter, including my terry cloth coat which had covered me for years after playing tennis.

We crossed a big river, went up a steep mountain where we saw some Japanese picking “camotes”, and reached a narrow plateau where at about 9 o’clock we stopped as airplanes passed overhead and began fierce bombardment. I was surprised to learn, especially since shell explosions had been taking place around her shelter, that during a bombing, Mrs. Sison is unable to walk. We could see the target distinctly. It was the place where we used to live and had just left only the previous day. There could be no mistake about it as we could see bombs exploding on and around the lime factory. (Lime is “apog” in Tagalog; this is the reason why the place is called Apugan. Irisan is the next barrio, the boundary of which is very near my shelter). Our shelters are just a few yards below the factory. We were sure that our shelters had been bombed and this was confirmed by reliable information we received later. We probably would have been killed if we had remained until the next Saturday as proposed by Sison. I do not know whether I had already said that I insisted in leaving that afternoon and did not wish to leave the next day as this day was Friday the 13th. Later we also learned that the only places in Baguio where hand-to-hand combat between Americans and Japanese took place were Irisan and vicinity. In other words, fighting was right there where we lived. What would have happened if we had not left?

After aerial bombardment at about 11:30, we moved ahead. We decided not to eat lunch until we were a little further. We crossed the narrow open plateau and again went up through a narrow trail well shadowed by trees. It was quite a winding trail. We seemed to be going around and around. Finally, we reached a ridge which was quite open. We went along this ridge. Ahead of us we could see shells bursting. Before we reached the place where the shells were falling, we turned left. We reached a place where very large rocks nestled several Igorots houses, all deserted. I forgot to state that after crossing the first river after the Asin road, we were stopped by a Japanese civilian. He asked us many questions and ordered us to give all our revolvers if we had any. We carried 6 revolvers. He took them all, but later returned them except one that belonged to Col. Desiderio which was really a very goodlooking revolver. Afterwards, he asked for cigarettes. We were convinced that he was not connected with the Army but was one of the Japanese civilians who went around robbing people. I should also state that from the time we left our shelter, an American observation plane had been flying overhead. It flew very low and we could see the pilot distinctly. He evidently knew that we were evacuees as he waved at us. We waved back whenever we were sure there was no Japanese around. We had to be careful. My son, Tony, was almost killed because a Japanese sentry saw him waving while an American plane flew overhead. He was lucky that the Japanese believed his explanation that he was waving at a girl friend in a house up the road, which was the truth.

We considered the Igorot village as unsafe as it could be the target of shelling. So after two hours of rest, although we were still very tired, we moved. We wished to reach the other side of the valley which we thought was only about two kilometers away. We walked and walked but it took us hours to reach the river bank bordering the village. This was a trail which descends very abruptly. The hill to the river bank was almost perpendicular. We looked down and we were perplexed as to how we could do it. Finally we decided to slide down. It was a most dangerous feat. It was raining hard and this made the trail very slippery. We feared that my mother-in-law might have to remain behind since she could not continue walking anymore. But she was brave and determined. She said she could make it also. She did, and we attributed it to a miracle. She could hardly walk but by sheer strength of will and perseverance she always could go farther and farther.

But there was a time when the way seemed impossible for her and to make things worse, she had fever. She did not wish to go any further; she could not. It rained and she had to lie down on the wet ground. But my son, Tony, true to my instructions to him to take care of Lola (grandmother), stuck to her. Tony and my Filipino bodyguard, Llagas, carried her down to the river bank. This took several hours. Could she continue? It looked impossible. We prayed and prayed. God must have heeded us as the next day, she found enough strength to proceed. She was able to go several kilometers when it started to rain again. Still suffering from a high fever, she had to take a long rest. Then, although practically dragging her feet, she continued on her way and was able to walk almost all the way to the border of the safety zone. All along the way since the start of our trek, I tried to find carriers, but I could not get any. I asked an Igorot guide to furnish me men to carry my mother-in-law but he said it would have to be after Ambosi as runners thought it dangerous to approach Baguio. A man was willing to do it for ₱3,000 worth of treasury notes. I did not have the money; I carried over ₱3,000 but half of them were PNB notes. He lowered his rate to ₱2,000, but I still could not pay. But the Igorot leader assured me that he would have some men carry Mama (my mother-in-law) after Ambosi. Finally, when we were almost at the end of our journey, a man agreed to carry her. How she was able to walk about 25 kilometers of trail crossing high mountains and deep valleys can only be attributed to God’s mercy.

Going back to the river bank, there was a lone house near the bank. As it was raining we went under it where we slept on the dirty ground with our wet clothes on. We slept soundly probably because we were tired. We did not mind the mosquitoes. It is possible that my wife was bitten here by a malaria transmitting mosquito since after her arrival in Manila, she had bouts of malaria. The house must have sheltered numerous evacuees; on the floor and all around were clothes and human refuse. It was upon our arrival in this place that an Igorot leader with several companions passed by and told us they were on their way to Baguio on behalf of the American Army to rescue General Roxas. I told them to be careful since Roxas was being closely watched. The leader said that he expected to be back next morning with Roxas. I thought he was just boasting.

The next morning we could not leave because my mother-in-law had not arrived. We worried about her and feared for her safety, and the two men with her (Tony and Llagas). We were embarrassed because we were delaying everybody in our party. Fortunately or unfortunately, an air bombardment staged by many airplanes began, so we could not leave anyway. The planes started diving just above us, and we could see the bombs being released. The target to be Japanese positions at the end of the Asin road. Finally, my mother-in-law arrived at about 10 o’clock. Shortly thereafter, we continued on our journey. While crossing the river I took a bath in the rapid crystalline current. When my mother-in-law saw my body which was more of a skeleton than anything else, she cried.

On the river we were advised that Gen. Roxas and Chief Justice Yulo and their families had arrived. The Igorot leader had made good his promise. It seems that he went directly to the shelter of Roxas, and upon his insistence the Roxases and the Yulos left at once. Mrs. Roxas, Mrs. Yulo and Miss Roxas were carried by the Igorots in hammocks. Sison and I decided to leave at once and go a little faster as we did not want Roxas and Yulo to leave ahead of us; we feared that the Japanese would pursue them. They were not pursued, however. I doubt whether the Japanese could have followed them because all along the way American airplanes flew above them as if patrolling to protect them from attacks by the Japanese.

We climbed one steep mountain and another steep mountain. We stopped to rest and shortly afterwards, to our surprise, my mother-in-law came walking. But she was very weak and again with fever. A very kindly mestizo gave her medicine. It started to rain hard again, and again she had to stay in the rain with fever.

We continued our way and after about 3 or 4 kilometers walk over a comparatively good road, we arrived soaking wet at a place which was apparently a rest house. As it continued to rain, we huddled like sardines in the one room house. In size, it must have been four by four meters. It had a front porch that sagged. At about 5 o’clock in the afternoon, we were startled by our Igorot guide suddenly jumping out the window. A Japanese soldier appeared with a loaded sub-machinegun pointed at us. Another armed Japanese soldier with a big scar on his face stood just outside the door. We could not tell whether there were others outside. The one inside the hut, with Capt. Desiderio who studied in Japan and spoke Japanese acting as interpreter, told us not to move. He told us to surrender all firearms. We showed him our five revolvers. He got them all, but then returned my revolver and that of Minister Sison. But almost immediately, he took mine back. He ordered us to open our baggage, which we did. He examined each of them. He got all the foodstuff. One of our companions, Mr. Gatchalian, remained seated on his bundle. The Japanese pulled it from under him and opened it. To our consternation, it contained a revolver with many rounds of ammunition. The Japanese became very angry. He pointed a revolver at Mr. Gatchalian. We thought the Japanese was going to shoot him, but fortunately he merely got the revolver. The tension eased. He asked us for our watches which we gave him. He returned some but retained the expensive ones, including my gold watch. I did not expect him to like my watch as I had been told that the Japanese preferred wrist watches and the watch of Mr. Sison was a gold wristwatch of the best kind. I prized my watch very much; it was a gift to me of Don Antonio Roxas. My other watch which had been presented to me by the employees of the Executive Bureau when I resigned from this office and which I therefore also prized very highly, had been accidentally included in the bag containing our very valuable medicines left along the way. I could not blame my wife for this as like others she was not herself. It was plain robbery, a regular daytime hold-up. As it turned out, the Igorots jumped out of the window to warn Roxas that there were Japanese and not to proceed. Roxas and Yulo did not arrive until after the Igorot had assured them that the Japanese were no longer in the vicinity.

Roxas and party arrived in the hut that night. He told us that they decided to leave Baguio after they found out that Sison and I had already left. They feared that the Japanese would take action against the Ministers who were left in Baguio. They walked very fast even during the night because they feared that they were being pursued. Fortunately, they met no Japanese. We had a long talk about many things that night. We agreed to leave early the next morning, April the 15th, 1945. He proposed that we go in groups instead of together, each group to leave at half hour intervals.

We learned that we were within the jurisdiction of Ambosi; that we were not yet in the safety zone. Although we were very tired, we did not sleep well that night. The Roxases and the Yulos slept in a nearby house, but we were still too crowded. We slept in a sitting position. The mestizo who gave medicine to my mother-in-law suffered a deep cut on his foot when he stepped on a can which had been thrown out the window by the young son of Mr. and Mrs. Villegas. He was bleeding profusely.

Mr. and Mrs. Villegas had a small baby and they kept lighting matches throughout the night. We could not understand why. We all grumbled and protested but they paid no attention. Because of them, I do not believe anybody was able to sleep.

We had no more food. The men went to search for food and they came back with a load of “camote”. This is what we ate for breakfast the next morning. We received information that the Japanese were pursuing us, so although according to Roxas’ plan they were to leave before us, Sison and I decided to go ahead. At about 5 o’clock, we continued our journey. I left my son Tony, my bodyguard and our laundrywoman to take care of my mother-in-law. I told my son that we would be waiting for them when we reached the safety zone. To make sure that they would not lose their way, I told them I would mark the turns or crossings with toilet paper, which I did. They could not lose their way as there was only one trail and the whole way as littered with clothes and other things thrown by the evacuees. My mother-in-law was growing weaker and weaker. I knew that, her strong will notwithstanding, there would come a time when it would just be impossible for her to continue.

The trails continued to be perilous — in fact they were even worse. Almost perpendicular mountains had to be traversed. After ascending and descending a mountain, another one loomed ahead. We counted nine high mountains before reaching Tubao. Many times we just had to slide down on our backs. There was one portion of about 100 yards on the side of a steep mountain with the trail no more than a foot wide and very slippery. In parts, avalanches had occurred and the trail disappeared down the mountain. We passed these portions by holding tightly on tree roots and vines which fortunately were quite abundant. We had to do some Tarzan stunts. To fall meant certain death as the ravine was very deep. Fortunately, no accident happened to any of us. It was the Almighty protecting us.

The first man we met along this trail told us that he had seen Japanese soldiers on the way. We became very nervous. Although we were already dead tired we accelerated our pace. Mr. and Mrs. Sison and our other companions were far ahead of us. My whole family with the exception of Tony, who was with his grandmother, were walking together. My wife was visibly very tired and weak. But the others, including little Menchu, seemed to be still strong. At one time, we stopped to take a little rest. My three young ladies, Dely, Tesy and Ming, who were a little ahead of us entered a dilapidated shack to take a rest. They came running and very excited. They saw a horrible sight — the body of an old person which they could not distinguish to be that of a man or a woman, already in an advanced state of decomposition. We left the place hurriedly.

We again climbed up a mountain so thickly forested that we could not see the sky. The trail was also very bad, but because it was very shady, we considered it the best portion of our trip. We crossed other streams with crystalline water, but although we wished to wash ourselves, we did not stop. We finally reached a group of houses. There were four or five persons in the village. They said that the day before they had been visited by Japanese soldiers which information scared us awfully. After eating some bananas which we picked along the way, we left. We were again caught by heavy rain. We stopped at an abandoned shack with a roof that hardly protected us. It was here that the Roxases and Yulos overtook us. The ladies looked fresh as they were carried in hammocks. As soon as the rains subsided, we proceeded. We had hardly walked 2 kilometers when it began to rain again. The trail was already very slippery and impassable. We had to stop under a structure which seemed to be an old stone bridge. When the sky cleared, we beheld a mountain on the other side of the river. Behind the mountain was already the safety zone. We burst in jubilation. Roxas signalled us to be quiet as there were Japanese. Sure enough; to our right we saw some Japanese soldiers going in a direction parallel to us. Are we going to meet misfortune at the last lap of our trip? We proceeded quietly and fortunately the Japanese did not see us or pretended not to see us.

As if to complete our suffering and martyrdom, the last lap to safety was a steep mountain which was very slippery from the rain. I fell down many times and at one time I almost rolled down into a deep ravine. I would have met instant death. It was impossible for my wife and daughters to go down the mountain. Roxas approached me and told me that runners and carriers would come for them. I still wonder how these Igorots can go down a steep mountain trail so easily just as if it were a perfectly level road. We arrived at the river bank safely and easily. For the first time since the war, we laid eyes on an American soldier. Our emotions were indescribable.

I related earlier our jubilation at seeing the U.S. Captain and his men. We were carried across the river and then we had to ascend another very steep, very difficult, slippery mountain. We did not allow ourselves to be carried any more. But we noticed that we climbed better and faster. Besides we were no longer suffering from nervousness caused by well-founded fears. We reached the top where we stopped to rest. We tarried as we were already in the safety zone. There were many soldiers and guerrillas. Shortly after we had sat down, my younger son, Alfredo, told me that my mother-in-law was coming. We thought he was joking, but then we saw her carried on the back of a man who was rather small. He was carrying my mother-in-law on his back as if she were a small child. We waited for her and there was a happy reunion of three generations of my family.

Before dusk we had to climb again, but it was not a difficult ascent compared with the others. At the top, a place called Pitugan, were three houses, one just a hut. The big one was occupied by Roxas and family and their friends. The small hut was assigned to my family and to Mr. and Mrs. Padilla. Others wanted to join as but we objected because there was no more room. I am glad the Padilla family was the one assigned to us since Mrs. Padilla is a sister of Don Jacobo Zobel, one of my very good friends whose family always supported me in my election bids in Calatagan and Nasugbu. Here for the first time we ate right; we had a good meal. Here we passed the night without hardly any sleep not only because we were almost all in semi-sitting positions, but also because we were too excited for being already in the safety zone. Even then the necessary precautions were taken by the American Captain. There were soldiers with submachine guns posted throughout the night around our houses. The order was to shoot anybody loitering around. Frequently, they searched the whole neighborhood with lighted torches and flashlights. We were cautioned not to go out by ourselves as we might be mistaken for Japanese snipers. We did not go out all night even though we felt the necessity to relieve ourselves. The precautions were well taken as the place where we saw the Japanese soldiers was just on the other side of the river, and once in a while they cross the river and shoot at anyone they see. Fortunately, no untoward incident happened that night.

The next morning, April 16th we left already rather late — about 7 o’clock. We walked not hurriedly on trails all going down. They reminded me of the trails of Batangas. I admired my wife; she had walked practically the whole way and she seemed to be still strong. She was very thin and I feared she would collapse, but she was no more tired than I was. We were, carrying nothing as we were able to hire carriers for this part of the trip. Mama and Menchu were being carried. All along the way, we met hundreds of people, many were runners and carriers. They brought canned goods and candies which they were selling at high prices to the thousands of evacuees coming from Baguio. At about half past eleven, we reached the plains. I think the place is called Rizal. There we stopped a while to eat young coconuts and sugar cane.

Gen. Roxas and Mr. Yulo walked with us. When we were half way to Rizal, a horse was brought for Gen. Roxas. We walked on the plains and after crossing two rivers we sighted a military truck. It was intended for us. The Engineer son of Minister Paredes was in it. The American driver was very nice. My wife and I boarded the truck. I wanted to bring my young ladies but I was told the truck was going back for them. We passed new roads which I understand were built by the American Army. On the way, we picked up Mama and Menchu. We reached Tubao after twelve. The truck returned to Rizal, and after less than an hour it returned with my other children.

We all went to church to give thanks to God for our safe arrival, our successful escape from the clutches of the Japanese. After we left the church, we stayed at the church plaza to wait for assignment of our quarters as we were told. It was there that we received the sad news that my daughter Neny had died. Our sorrow was indescribable. We wept like children. She had been a good and dutiful daughter. She married Ramon Cojuangco in September, 1944 a little more than six months ago. My wife and I were very happy when Neny married a man we heartily approved of. The news of her death was totally unexpected. We had always feared for Lily and her family because they lived in San Miguel near Malacañan and the San Miguel Brewery, and it was here that heavy fighting was reported. It was true that heavy bombardment was reported at Taft Avenue, but it was the Taft Avenue proper up to a little beyond Vito Cruz. This is still far from the house of the Cojuangcos which was on the southern end of Taft Avenue extension. But it turned out that the whole Conjuangco family left their house to seek shelter in the Chapel of De La Salle College near the intersection of Taft Avenue and Vito Cruz. It was a surprise to me to learn that they had gone to that place since, when I learned that the family of Judge Carlos had moved to that place, I expressed to them my belief that it was not a safe place. De La Salle College itself was occupied by the Japanese Army and it had to be bombarded from the air or shelled from the ground. I told them that they should either join the Aquino family who lived in a concrete house near Malacañan or they should just stay in their house on Taft Avenue which was a three storey cement house with a very strong air raid shelter. The reason for this instruction was that I feared the Japanese more than the American bombs and shells. It got into my head that upon retreat they would kill all the Filipinos they could find as by then they would have discovered that the Filipinos were not only guerrilleros but that they hated the Japanese. I based my belief on the record of the Japanese in China. I thought that the only house the Japanese would respect was that of Speaker Aquino for his vocal Japanese leanings. If they chose to remain in their own house in Taft Ave., my instructions to them were to secure the gates, and close tightly and securely all the doors and windows of the house. Evidently, they moved to La Salle upon the persuasion of the Carlos family, Mrs. Carlos being the sister of Mrs. Cojuangco.

I was called to the Municipal building where the office of the C.I.C. was. Engineer Paredes accompanied me. I met there Justice Yulo, Mr. Sison, Mr. Paredes, an American and a priest. There I cried again. The priest was trying to console me by saying that the news about Neny could not be true. This gave me a ray of hope. I was given a little brandy to drink probably to bolster up my spirit. I left the building without having been questioned at all. I think they just wanted to know my personal circumstances and these were provided by Engineer Paredes. I had just returned to the church yard when I was called again. We — Roxas, Yulo, Sison and Paredes and myself — were loaded in two jeeps and taken to Agoo which was the headquarters of the 6th Army operating toward Baguio. There we were introduced to the Commander of the Division, Gen. Carlson. We were invited to a luncheon which was a typical American meal. For the first time in a long time, we ate good bread with butter, nice sweets, ice cream, etc. We had a hearty meal. All the members of the staff of Gen. Carlson were there. After the meal group pictures were taken of us.

Gen. Roxas and Mr. Paredes were closeted with Gen. Carlson probably to learn from them some facts of military value in connection with the operations to take Baguio. We were taken to the office of Col. Arvey whose position we did not know. He might have been the Judge-Advocate. He seemed to have complete files on us and other Filipino high officials. He had a good many personnel and the office seemed to be a busy one. We were asked many questions, but the one that struck us the most was when he asked us what we thought of the postponement of independence. Yulo, our spokesman, answered immediately and without the least hesitation. He answered that our independence should not be postponed at all. The Colonel argued that what we need now is the country’s rehabilitation and this would require the assistance of America. Yulo answered that there was no incompatibility between independence and American assistance to our rehabilitation. I could not help making my sentiments also known by nodding approval to the statements of Mr. Yulo.

The Colonel immediately retorted, “I am surprised with your attitude. I have talked to very many Filipinos and 98% of them were for postponement.” I do not doubt that the Colonel was telling the truth. This reveals the inherent weakness of the Filipinos. I am sure that a great majority of them are for immediate independence. But we generally do not want to displease our hearers especially if they are Americans. We readily agree to insinuations. Or we are apt to presume that all the Americans are against our independence and so whenever we talked to them we give them to understand that we are not enthusiastic for independence. This trait, this weakness in our character must be remedied.

Before leaving another Colonel talked to me. He said that a mob near Baguio had unearthed about 800,000 of silver pesos, and he asked me whether I knew something about it. I told him that I was reliably informed by the Japanese that they were able to recover in the waters around Corregidor several boxes of silver pesos. These were turned over to the Taiwan Bank. This bank had a branch in Baguio and it is possible that the bank had buried the silver pesos in the place where the Americans found them. The Colonel after some recollecting exclaimed, “Oh yes, there was a piece of board with ‘Taiwan’ written on it.”

We returned to Tubao and rejoined our families. We were taken to the school building where two families were assigned to a classroom for living quarters. We, with the Sison family, occupied the classroom on the right end of the building, and the Roxas and Yulo families, the room on the other end of the building. We were given rations of canned goods at nominal prices; We had everything we needed, including butter. We had more than enough. What a contrast! Whereas the Japanese stole our food, the Americans gave us food. Our only problem in that building was sanitation. The authorities were doing their best to keep the surroundings sanitary. There were many toilets behind the building. But just the same human refuse was found abundant all around the building.

I forget to recount that before we reached Ambosi, there was continuous shelling directed by slow flying planes hovering above — the target of the shells was a mountain top just above us. In that place we heard sounds that were most terrifying. The sound travelled through the ravine where we were. I believe it was the whistling of shells falling above us, but instead of the whistling sound, it sounded like the zooming of many airplanes on account of the ravine. Or it might have been the sound of the cannonading at Galleno, the place below Asin where heavy fighting was taking place and as cannonading was on the ravine we were in the sound path.

The 17th and 18th, we spent resting, recovering from our ordeal. Each one of us had lost at least ten pounds on the way. We inquired about when we were to be brought to Manila. The military people promised to provide transportation to Manila just as soon as the quarantine of Manila was lifted and they could secure special passes for us. In the morning of the 19th, we were loaded in a closed small truck, and the rest of the story has already been told. Little did we imagine that it was the beginning of a long incarceration. We were ignorant of what they intended to do to us and we brought nothing. We were originally told that we were only going to San Fabian. I had nothing but the clothes on my back and my toothbrush and shaving kit.

I want to record the departure of President Jose P. Laurel.

On Sunday, March 18, we were called to a special meeting of the Cabinet at the Mansion House. All the Ministers, with the exception of Yulo, Sison and Roxas, were present. It was a very solemn meeting. The President spoke for more than one hour beginning at about half past five. We consider it one of the best speeches that he had ever delivered.

He explained that Ambassador Morata had seen him to transmit the wish of the Japanese Supreme Council to have the President, the members of his Cabinet, the Speaker and the Chief Justice brought to Japan. Laurel asked that he be given until that evening to give his answer. His purpose was to be able to consult his collaborators in the government. He showed us a letter which he had dictated when he was told in Manila that he and the members of his Cabinet might be taken to Japan.

In the letter he declined to go to Japan, giving his reasons. He accepted the Presidency on the conviction that he would be able to serve his country and people. He can only do so if he stays in the Philippines. He was determined to stay and serve his people even if it would cost him his life. His leaving the Philippines at this time would be a desertion and he cannot betray his people by such a cowardly act. Besides, Pres. Quezon was criticized by the Japanese themselves for having abandoned his people when they needed him. He considered the criticism well founded and he should, therefore, not commit a similar dereliction of duty. But if circumstances prevail on him to leave, he would like to request as a counter proposal that he go alone. Just as when the “state of war” with the United States and Great Britain was declared, he was desirous of assuming alone and exclusively the full responsibility, he was now willing to make another sacrifice by going alone so that the others would not have to undertake a dangerous trip to Japan.

Everybody was so affected that no one could speak after the peroration of the President. The President himself had to ask our opinion. The consensus of opinion was that, if possible at all, the President and his Cabinet and other high officials should not go. But if he had to go, each and everyone were willing to accompany him. The President reiterated his determination to go alone. He promised to go to the Cabinet Hill the next day to tell us the result of his negotiation with the Japanese.

The next day, Monday, March 19, he did not go to the Cabinet Hill. Tuesday, at 5:00 p.m., we went to the Mansion House. This time Yulo, Sison and Roxas were there. The President informed us that he had to go, and that his proposal to go alone was partly accepted in the sense that he would only be accompanied by some Ministers and a General. He announced that those accompanying him were Speaker Aquino, Min. Teofilo Sison of Home Affairs, Min. Camilo Osias of Education and Mrs. Osias, and Gen. Capinpin. This announcement was a great relief to me because I feared that on account of my position in the government, I had to go. I was worried as I brought my whole family to Baguio, except my two married daughters. I also brought my mother-in-law. My wife was not in good health. Besides, almost all the families in Baguio were having serious problems with the food shortage. Under the circumstances, I could not leave my family. The announcement was also a surprise as regards Manuel Roxas because it was taken for granted that he would have to go. The President concluded that the departure of the party would be announced soon. We promised to come in the afternoon of the next day.

The next day, Exec. Sec. Emilio Abello sent us a note that the President would like us to go to the Mansion House early. We went at two o’clock that afternoon. We had our picture taken with the President. In the picture was the Filipino flag which the President had been using and which was almost completely torn from the bombing of the Mansion House. Those present were Claro M. Recto, Minister of Foreign Affairs; Jose Paez, Minister of Public Works and Communications; Camilo Osias, Minister of Public Instruction; Pedro Sabido, Minister of Economic Affairs; Emiliano Tria Tirona, Minister of Public Health and Welfare; Arsenio Luz, Chairman of the Board of Information; Jose Sanvictores, Head of the Food Production Activities; Emilio Abello, Executive Secretary; Ramon Macasaet, Vice Minister of Health and Welfare and private physician to the President, Maj. Gen. Guillermo Francisco, Mayor Ramon Mitra of Baguio, Jose Laurel, Jr., Assemblyman from Batangas, and myself, Minister of Finance. Speaker Benigno Aquino, Sr. was also present. Chief Justice Jose Yulo and Brig. Gen. Manuel Roxas came after the meeting, conferred with the President, and left before the President’s departure. Ministers Quintin Paredes of Justice and Rafael Alunan of Agriculture were absent as they could not be notified.

The President spoke again for several minutes. He said that he had devoted the greater portion of his life to his country. It would be a pleasure and it is his determination to dedicate the rest of his life to the service of his country. Undoubtedly, he said, he would be criticized and bitterly attacked. But he hopes that some day his people will understand. His ideals and principles are very clear, having been repeatedly expounded by him. He wants to establish a Philippine nation, truly independent and free. He will combat with all his might any intervention or interference on the part of the Americans, or Japanese, or any other foreigner. He wants his people to be happy and prosperous. He believes that we should not depend upon foreigners as no one could love a Filipino better than a brother Filipino. He would like the Philippine Republic to befriend all nations, but we should always remember that we are Oriental and our country is located in the midst of Oriental nations. It is but natural that we should establish the most friendly relationships with other Oriental nations.

Afterwards, the President sent for his crucifix. He stated that since his childhood he had knelt and prayed before this crucifix. He is leaving it with us under the care of the ranking member, Minister Recto. Before it, he would like us to pledge unity and perfect understanding. He concluded by asking us to forgive whatever offense or wrong he had committed.

It was a very touching and pathetic scene. The President was crying and so were all of us. I could not bear it — I was the most affected as I am the most intimate friend of the President — I had to leave the room for a while. Nobody could speak. In everybody’s eyes we could see the love and trust for our President. The scene was at the Guest House, amidst the ruins and debris.

We left the President and went to the Mansion House. The President spent his time bidding goodbye to the Presidential Guards and the household.

At 7:00 o’clock in the evening, the President and those accompanying him to Japan went by automobile to Ambassador Murata’s residence. We followed on foot as the residence was just outside the Mansion House compound.

Members of the party to Japan were President and Mrs. Laurel, and all the members of his family including his in-laws, Speaker Aquino, Minister and Mrs. Osias, and General Capinpin.

Those who saw the President and party off were Ministers Recto, Paez, Sabido, Tirona, Luz, Sanvictores, Abello, and myself; Gen. Francisco; and Vice Min. Ramon Macasaet.

The Japanese present were Lt. Gen. Muto, Chief of Staff; Maj. Gen. Utsonomiya; Mr. Hamamoto; and many other Japanese.

As a last wish, the President asked Gen. Muto to extend assistance and protection to the Ministers and the General whom he left behind. Gen. Muto promised to do so and, addressing us, he stated that we should not hesitate to communicate to him anything in which the Army could be of help.

The party left by automobile at 9 o’clock. Ambassador Murata accompanied the party to Japan. Japanese soldiers in two trucks convoyed the party. They were supposed to go by automobile for about 15 kilometers; walk for about 60 kilometers, and then by automobile again up to the point the party could board an airplane. A few days later, Mr. Hamamoto told us that the President and party had to walk only about 30 kilometers and that they had arrived safely in Formosa. They could not proceed to Japan probably because of the invasion of Okinawa Island, part of Japan proper.

Before leaving, the President signed an order reorganizing the government by relieving all the Ministers and other officials who remained in the Philippines. Chief Justice Yulo resigned. The purpose was to be able to organize a complete government in Japan.

Thus ended the first government of the Second Republic of the Philippines. No doubt it had been a success under the able and courageous leadership of Pres. Laurel. The government was established under the most difficult circumstances. The war reached its acute stage and it was natural that there would be conflicts between the government and the Filipinos on the one hand, and the Japanese Military authorities on the other. The Japanese naturally wanted to win the war, and at times the requirements of the Army and Navy affected vitally the interest and welfare of Filipino citizens. The difficulty of subordinate Japanese officers and officials and Japanese civilians to understand and appreciate the Filipino customs and idiosyncracies and also to understand and effectuate the principles and aims of Japan as regards the Philippines, created problems which admitted no solution satisfactory to the Filipinos. With so many serious difficulties, the government of the Republic was nevertheless able to forge ahead. It is a wonder how it could count with so many achievements and accomplishments under the circumstances.

I purposely mentioned Japanese subordinate officers and officials. This is because the high officers, like Gen. Kuroda, Gen. Wachi, and Gen. Utsonomiya deserve the respect, admiration and gratitude of the Filipino people.

* * * * *

            Thus for the second time, I am out of the public service. It certainly afforded genuine pleasure and relief. Notwithstanding the fact that I was in the service of the government from 1909 to 1939, and from 1942 to March, 1945, I harbor only dislike for the public service. The reason is not because I have experienced disappointment in public service. I know of no other person who has been treated with as much justice. In fact, my promotions were even faster than they should have been.

But I have seen countless cases of irregularities in the public service. I have seen men promoted who did not in the least deserve it. I have seen flagrant cases of nepotism. I have seen vengeance wreaked on brilliant employees. I have seen bribery and serious irregularities in the service go unpunished because of the influence and “pull” enjoyed by the culprit. I have seen promising young men unjustly dismissed or laid off just to give way to relatives or favorites of the appointing officers. I have seen lazy and inefficient employees retained in the service to the prejudice of the interest of the people. All these so disgusted me that I longed to leave the public service and enter private business where I felt I belonged.

My first opportunity came in 1938 and I immediately seized it. The then President did his best to persuade me to remain in the service, offering all kinds of inducements, including the managership of either the Philippine National Bank or the Manila Railroad Co. But I insisted in resigning. I was not mistaken. In April of 1939, I joined Marsman & Co. I left the government with an indebtedness up to my neck.

On this day, Wednesday, August 1,1945 we read that at Potsdam, Germany, Truman, Stalin and Attlee (the new Premier of Great Britain), and with the concurrence of Chiang Kai Shek, sent an ultimatum to Japan demanding surrender. The conditions imposed were that Japan is to have only her four original islands. All lands taken by force must be returned.

August first has always been considered as an unlucky day. We were therefore glad that we went to bed at 10 o’clock without any unfortunate incident. But at about 11:30 that night we were awakened by a loud cry. We did not pay any attention. A few minutes later, we heard a heavy thing drop. We jumped out of bed and turned the lights on. We saw Dr. Julio Luz lying on the floor. We thought he was merely dreaming. We put him back on his cot. He woke up and began to sing. It was then we realized that he had lost his mind. He stood up on his bed and fell on the floor again. It was lucky for him that he did not get hurt. His brother, Arsenio, called for the doctor. The guard also notified Lt. Hagonberg. They came immediately. Julio called for Sanvictores. He took hold of the left hand of Sanvictores and pulled him in. Julio pulled Sanvictores so strongly that if he were not a strong man, being our physical director, he would have fallen. Luz saw Lt. Hagonberg and he asked, “How is Hagonberg?” “Well, thank you,” answered the Lieutenant. “How is Gilfilan? How is your shit?” The Lieutenant did not answer.

Luz crawled to the ballustrade and tried to jump. Three strong men, for in the meanwhile a big crowd had gathered around, pulled him back. His brother Arsenio became so nervous that he did not know what to do. He ran back and forth. Somebody remarked that it was the effect of Atabrine. Doctor Bunye said that it was the effect of the malaria itself as the type he contracted attacks the brain. But we who knew Luz before he came to Iwahig, and who had observed his conduct since his arrival believe that he is a lunatic.

Bocobo is also showing signs of eccentricity. He seems to think that he is seriously sick and would soon die. We believe that it is just the result of depression caused by our unjust imprisonment. We are all doing our best to help him. The Colonel and the Lieutenant are also doing their best to help. They have authorized him to go out of the stockade any time he wished to take a walk accompanied by another internee to Class A. We still hope to save him.

As a joke, we printed out the different hobbies of each of us, which showed that something is also the matter with our heads.


July 6, 1945 Friday

Yulo continued to be very bitter against everybody. He has lost confidence in Osmeña and in Roxas in so far as our situation is concerned. As to MacArthur, he says MacArthur will do only what would be for his own convenience. He thinks Osmeña is useless. As to Roxas, he resented the fact that both of them journeyed from Baguio to La Union together, and then to Manila together, and afterwards, Roxas left him. Since then, they have not seen each other.

It is reported that Osmeña at one time planned to prevent the election of Roxas as President of the Senate. He wanted Yulo to return to make him his candidate for the position. This was never carried out.

It was also reported that Roxas had said that Congress had nothing to do and could do nothing in our case, and that it is only the military that could decide our case. This report depressed us. But the news was clarified by the letter of my wife. She said that she, accompanied by Mrs. Recto and Sen. Rodriguez, went to see Pres. Osmeña in his office. The President received them amiably. My wife went there to intervene in my behalf. The President told them that he cannot do anything now as we are still under the military, that he had already requested that we be transferred to the Commonwealth, and that once transferred he would be able to do something. According to her, Roxas paid her a call at our house. He said practically the same thing — that nothing can be done now, but that he has already asked Gen. MacArthur to turn us over to the Commonwealth. He would do his best for us, and if necessary he will go to America.

Today, news came that the military campaign in the Philippines had been declared closed. This may accelerate our transfer to the Commonwealth.

* * * * *

It seems almost definite that the elections will be held next November and that the opposing candidates will be Pres. Osmeña and Roxas. There is quite a difference of opinion as to whether it will benefit us or prejudice us. The general opinion seems to be that it will favor us. Recto upholds this view. They say that both will try to do everything for us with the expectation that we would help whoever could get us released. They are aware that we here hold the balance of power and that whoever we support will come out.

My opinion is different. I believe the effect will be just the reverse. Each would not be a candidate unless he is reasonably sure that he can win. They would be thinking: Why allow a new element to come in which may deprive him of his chance to win? Better eliminate any disturbing element. On the other hand, there are many candidates for senator who will try to use their influence not to allow us to be released for fear that we may present our candidacies and therefore lessen their chances to get elected. Furthermore, each candidate will want to be sure of our support. Those will not get our support will surely work against us.

Both Osmeña and Roxas can do very much for us either way. Osmeña will be the one to decide what to do with us once we are turned over to the Commonwealth. On the other hand, Roxas is an intimate friend of MacArthur and just now our fate is in the hands of MacArthur. If, on the other hand, because of our prudence and because we do not want our attitude known just yet, both may lose interest or may want us to remain where we are until they find out how we stand.

We have been informed that the most serious charge against former Ministers of the Philippine Republic is that we left Manila and this resulted in the killing of so many residents of the city. In other words, they say that if we had not left Manila, the massacre of residents would not have occurred. I am sure that our presence in Manila would not have made any difference. This is what the Japanese did throughout China before the establishment of the Pro-Japanese government. The Japanese were aware that the majority of Filipinos were against them. To protect our people and ourselves, we of course denied this. But as a matter of fact, we knew positively that 95% of the Filipino people were anti-Japanese. We knew that even the government employees serving in the Japanese regime were “guerrilleros”. We knew the feeling of the Filipinos because we were in continuous close contact with them. They hated the Japanese. This feeling was prompted by the abuses committed by the Japanese. They also resented the intervention of the military police and Japanese civilians in strictly private affairs.

What the Filipinos resented most was the air of superiority assumed by the Japanese. Even those holding the lowliest jobs acted no more, no less than kings. All branches of government had Japanese advisers, some of them very ignorant. They would give orders to Filipino officials who by education and experience were far ahead of them.

I remember the case of Dr. Sison, Director of the Philippine General Hospital and Dean of the College of Medicine, reputed as one of the best doctors in the Philippines. A young doctor in the Japanese Army with the rank of Lieutenant, a Dr. Ono, tried to boss him around. We had a Japanese friend, Mr. Yamamoto, then Manager of the Yokohama Specie Bank. We were with him almost everyday as he was a member of the Philippine Club and we used to play tennis with him. After the Japanese occupation of Manila, he would not even talk to us.

We interpreted the attitude of the Japanese as a superiority complex. This we can never accept. Just as we have been preaching that we must have no inferiority complex towards the Americans and other whites, we cannot under any circumstances admit inferiority to the Japanese. Such is the general feeling of Filipinos toward the Japanese and they knew this perfectly well. This is the reason why they tried to change the government, why they wanted Gen. Ricarte and Benigno Ramos to hold responsible positions in the government; why they organized the Makapili, which constitutes not only an army to fight with the Japanese, but a party openly and aggressively for the Japanese. They were against the Laurel government because they were convinced that all of us were not sincere. On the other hand, they knew perfectly well that in Manila and everywhere else, there were many “guerrilleros” and that the moment the Americans approached Manila the Filipinos would all rise up in arms. Under the circumstances, it was not surprising that they had decided to kill everybody they saw before retreating. We could not have done anything. All that would have happened is that they would have killed us also; they did not discriminate. Even those who were reputed to be pro-Japanese and who had done much for the Japanese were killed.

Supposing that we could have done something, why did we leave Manila. We did not want to leave Manila. Plans to evacuate Manila had been previously considered. Various places were considered for the purpose, like San Mateo and Montalban. After due consideration, however, we decided to drop the matter of the proposed evacuation. But on the 19th of December, the President called us to a special meeting and told us that we were being ordered by the Japanese Military authorities to go to Baguio. We were all surprised. Baguio was one of the evacuation places considered and there was almost a unanimous vote against it for two reasons: (1) There were only two roads leading to the City. If these were cut off, not only would it be impossible to escape but there would also be a food shortage since Baguio is far from being self-sufficient. (2) The water supply of Baguio comes from a pumping water system and if the water lines or the pumping mechanism were destroyed or ran out of fuel, we would have a big problem with our water supply.

At any rate, we had decided not to leave Manila. We asked the President whether we could stay. He answered that he had done all he could to prevent the evacuation since he felt duty was to stay in Manila. He feared that there would be a panic when the people found out that the national government had left. He desired to be in a position to protect the people, to die if necessary. Of course that was also the sentiment of each and every Minister. The President said we must go.

We were given 48 hours to leave Manila. For this reason, I was not able to clear out my desk. My family had no time to prepare for departure. I left many things that I should have taken. At home, we packed hurriedly, also leaving many valuable things behind. We were not able to make arrangements for the occupancy of our house during our absence. We had to ask my daughter Lily and her husband to stay there in the meanwhile. The newly married couple, my daughter Neny and Ramon Cojuangco, could not go to Baguio with us because the younger sister of Ramon was doing to be married in a few days. They promised to follow us as soon as possible. (They failed to do so and I suspect it was because of lack of transportation or because American planes were hovering all over Luzon and it was not safe to travel.)

Our car was not ready for the long trip; it needed to be brought to the repair shop. We were told that we would leave for Baguio at ten o’clock of the night of the 20th. Our car was finished at about 9 o’clock of the night set for our departure, but it did not run smoothly. A Malacañan mechanic, after inspecting it, told us that the car could definitely not reach Baguio. I decided to take the armored car of the Philippine National Bank where I was the one-man Board of Directors. But the armored car was hardly sufficient to accommodate our cook, laundry woman and servants, not to mention our luggage. Not including our household help, we were thirteen: my wife and I, my eight children, mother-in-law, my Japanese military police guard and my chauffeur. We tried to get other cars in Malacañan, but they were all in bad shape and the mechanic certified that they could not reach Baguio. In a way, we were glad as we thought that it would be a good excuse for us not to go.

The Japanese offered to give us a military car, but of course I did not want to use such a car because it was painted in the special khaki color of all military cars. It would have been very dangerous since American planes seem to have already mastery of the air and I was sure that we would encounter American planes. The military car would be a target. I decided to borrow the Buick 7-passenger car of my son-in-law, Ramon Cojuangco (1941 model), although it had not been used for months and we were not sure that it would run. When we tried to leave the Malacañan Palace grounds to go to the house of Speaker Benigno Aquino where the car was kept, the Japanese guards stopped us and questioned us repeatedly. When they found out who I was and where I was going, and that my sole purpose for leaving the premises was to get my son-in-law’s car to use in going to Baguio, we were allowed to leave but under guard. Speaker Aquino’s house was within hailing distance from Malacañan.

The Buick would not start. We pushed it to start the engine, and finally after two hours of pushing, the car began to function. All the while we were pushing the automobile, the soldiers followed behind us. Back in Malacañan, the mechanic certified that it could reach Baguio, so we decided to use it.

We arrived in Malacañan before ten o’clock, the time for departure set by the military, but we were not to leave for Baguio until the next morning. No one was allowed to leave Malacañan. That night we slept on divans and chairs, and some slept in the cars. We were not allowed to get food from the outside; we had to be contented with the little food furnished us by Malacañan. The palace was very heavily guarded by Japanese soldiers and officers.

The motorcade consisted of at least 30 cars belonging to the President, the Chief Justice, and all the Ministers with the exception of Minister Sison of Home Affairs. The Japanese Ambassador and his staff were also with us. Alongside the car of each Minister was a military vehicle with Japanese guards in full uniform. We noticed that they kept their eyes on us.

We boarded our automobiles at about seven o’clock in the morning. We were given instructions. The cars were camouflaged and divided into groups. Each group would leave at half-hour intervals and each car was to keep a certain distance from the next. When American planes appeared, we were told to alight and endeavor to find an air raid shelter, or go to a more protected place like under trees, and not to move. We knew that the trip was going to be a dangerous one. I was worried as I was carrying about ₱15,000,000 of military notes and about ₱1,000,000 of Commonwealth notes in the armored car owned by the Philippine National Bank which was part of our caravan.

We did not actually start until about 9 o’clock and so we were inside the car sweating for a full two hours. The Kempetai or military police assigned to me sat with the chauffeur and was fully armed. We took the regular route to Baguio. There was very little civilian traffic or Filipinos on the road. All along the way, the roads with the exception of places inside the “poblacion” were deserted. Almost all the houses were vacant. The atmosphere was very pitiful and sombre. We also saw no animals. There were stretches of miles and miles with no Filipinos in sight. They probably had fled to the mountains or to the barrios to avoid the Japanese soldiers who had been taking all their food. There were many Japanese soldiers, automobiles, trucks and other military vehicles all along the way. It convinced us that there were still many Japanese soldiers in the Philippines. What we could not understand was that the soldiers were travelling in both directions. We saw cannons, especially anti-aircraft. We saw various airplanes parked alongside the roads, very well camouflaged.

Before leaving Manila, we were told that signals would be given whenever there was an air raid or American planes above. I forgot to say that our convoy included many trucks of Japanese officers and soldiers. Generally, there was one truck in front of a group and another behind. Because of these trucks, we travelled at a very slow pace. A kilometer before reaching San Fernando, Pampanga, we were stopped. We were advised that Camp Clark, the most important Japanese air base, was being attacked. We got off to run for shelter. I selected a ditch. We saw two American planes overhead. We certainly were scared. Evidently the planes did not see our cars as they continued on their way.

We proceeded on our way. San Fernando was intact, but when we reached Angeles we saw that the town was almost completely wiped out. It is said that it was burned by Communist elements. We reached a place from where we could see Camp Clark; a few places were still burning. We learned that many Japanese planes were either shot down or destroyed on the ground. There were also some American planes hit. We learned that Pres. Laurel and his family, who were in the first group, were very near the scene of the air battle and bombing. They also had to alight and hide.

When passing Tarlac we saw many planes coming. At first we thought they were American planes, but they were flying low. Evidently, a big transport carrying some high Japanese officers, was being escorted. The rest of the way we did not stop. We tried to go as fast as possible when approaching or passing airports and other military objectives. We did not encounter any more planes.

Alcohol fuel is really far from being as good as gasoline. All along the road cars belonging to different groups stalled. Many had to be pushed or’ repaired. Some cars had to be abandoned on the roadside, the occupants transferred to the military trucks with the Japanese and Philippine Constabulary soldiers. After a few hours, the motorcade broke up as most of the cars had stopped. The cars still running went ahead. All along the way the trucks loaded with Japanese soldiers never left us. When our car stalled, they also stopped and helped push our car. No car was able to arrive in Baguio before dusk. Some arrived before midnight of the 21st and some in the early morning of the 22nd. Some even arrived on the 23rd. Many cars were left behind. The occupants of cars that broken down in Kennon Road walked all the way to Baguio.

My family and I had the most sensational experience. My car ran smoothly until we entered Pangasinan when it stopped. It had to be pushed by Army trucks quite a long way before it would start again. This had to be repeated many times. At one point, the machine would not function anymore. A Japanese mechanic alighted from a truck and repaired the machine. He must have been a good mechanic as the machine started and we continued on our trip. After about 20 kilometers we stopped again. A truck tried to pull us with the intention of doing so up to Baguio. But my car was very big and heavy and it could not be pulled up the mountain road. The mechanic was able to make it function again. After stopping in Pozorrubio for fuel, at about six o’clock in the evening, we started the sleep climb to Baguio. Before reaching Camp one, the car stopped again. It had to be pushed for kilometers by Min. Recto’s car. In places, the roads were so narrow after a landslide; the fender skirts caught a high ground and the car got stuck. We removed the fender skirts but were convinced, however, that we could not continue the trip that way. Meanwhile, many cars had accumulated behind us and the occupants were becoming impatient. I heard them hooting. I was annoyed; I thought they ought to be more helpful. I told the chauffeur to stop the car, park it on the side of the road, and allow all the cars, including the one pushing us to pass. I was determined that we would sleep right there on the road. It was certainly difficult for my mother-in-law, my wife and my children. I could see that they were suffering, especially as it was already very cold. I was not sorry to stay; I was afraid to continue. My chauffeur had been rejected by the government insurance company for poor eyesight. He was also color blind. I should not have allowed him to drive, especially on narrow and dangerous roads like the Kennon Road. But the chauffeur continued to work on the car. Finally, to our amazement, it started to function.

By this time we were the only car on Kennon Road. We went quite fast. We could not slow down because everytime the car slowed down it would stop. We continued our way in quite a fast clip. We passed all the cars that hours before had left us. We reached Baguio several hours ahead of them. My chauffeur had never been to Baguio. So I had to direct him. We intended to go straight to the house reserved for us in Cabinet Hill. The road to Cabinet Hill was closed. We went ahead to the Pines Hotel. There we learned that the houses on Cabinet Hill were not ready since the present occupants had been given only a few days to vacate the houses — accommodations in Baguio were then very difficult. But the Pines Hotel was ready for us.

My chauffeur, who had never been to Pines Hotel, did not know the correct entrance. He entered through the exit. Since the driveway was very narrow which made it difficult for a car to back out, I walked to the hotel lobby where I got permission for us to approach the front entrance passing through the wrong way. From the entrance, I hailed my chauffeur to start the automobile and proceed. The road was steep and the car began to roll down, I was right in front of it. I hardly had time to jump out of the way. It was a narrow escape.

We went into the hotel. There was no food prepared for us so we passed the night hungry. We were given two small rooms where we had to sleep four to a bed. We suffered terribly.

I relate all these facts to show that we did not want to leave Manila voluntarily and that we were carried by threat and by force to Baguio.

I would also like to relate here the circumstances connected with the ₱15,000,000 of military notes and ₱1,000,000 of Commonwealth notes that we brought to Baguio.

Sometime on December 19, 1944, the Japanese adviser of the Ministry of Finance, Mr. Haraguti, accompanied by three Japanese officers, came to see me at my office. I was surprised at the sudden arrival of my visitors for I had not been informed of their coming. Haraguti, in the name and on behalf of the Japanese Army, demanded that all Philippine and American currency deposited and in the possession of the different Filipino banks be turned over to the Southern Development Bank, a bank owned and controlled by the Japanese government. As Minister of Finance, I had the sole discretion of affecting such a transfer with the final approval of the President. The Japanese did not go to Laurel directly because, in many previous occasions, Laurel told them that where money matters were involved he executes whatever his Minister of Finance recommends.

I protested vehemently. Haraguti cited a precedent — what the American High Commissioner did with reference to bank funds upon the commencement of the Pacific war. He said that the High Commissioner took possession of all the Philippine currency belonging to the different banks. I answered that the present case is different inasmuch as the Philippine Commonwealth was really under the American government, whereas at present the Philippines is an independent Republic formally recognized by the Japanese government. Haraguti insisted and I could see that the Japanese were determined to use force if necessary. I then asked him why they wanted to get the money. He answered that the purpose was to prevent their circulation. I then proposed that the Republic get the money for safekeeping. I added, however, that I would consult Pres. Laurel before making a definite decision. I thought they had accepted my proposition as they left without saying anything further.

I immediately went to see Pres. Laurel. I told Laurel that I was convinced that the Japanese were hell bent on confiscating the money and that we had no other recourse but to do all the means necessary to save the money. Pres. Laurel and I decided to meet with the managers of the banks concerned. Whatever is agreed upon by the managers and myself, would be considered as approved and ordered by the President.

The following day, I called the bank managers concerned and met with them in the office of the President of the Philippine National Bank on the Escolta. As I recall, the only banks then having Philippine or American currency were the Philippine National Bank, the Philippine Bank of Commerce, and the Bank of the Philippine Islands. The PNB was represented by Mr. Vicente Carmona, as bank President, while PBC and BPI were represented by their respective Vice President and General Manager, Miguel Cuaderno and Rafael Moreno. Felix de la Costa, director of the Bureau of Credits and Investment, was also present.

During the meeting I gave them an account of what happened. I told them that the only possible satisfactory solution would be for them to turn over the money to the Philippine government for safekeeping. I added that the money would be returned to them as soon as conditions become normal. They all readily agreed. With respect to the Philippine National Bank, no action was necessary as we were leaving all the money with the bank. I issued corresponding receipts to the banks for the amounts received as follows: Philippine National Bank, ₱490,529.00; Philippine Bank of Commerce, ₱425.200.00; and Bank of the Philippine Islands, ₱969.00. The total amount taken by my office was left and deposited with the Philippine National Bank. After leaving the bank, I went directly to Pres. Laurel to give my report. He approved all that had been done.

About a week prior to the above-mentioned events, Malacañan had advised all the Ministers that the Japanese were ordering all of us to go with them to Baguio. On December 20, 1944, an arrangement was made with the Philippine National Bank to load all the currency in the bank’s armored car which would go with us to Baguio. The person in charge of the armored car was Mr. Amado Lagdameo, the manager of the Baguio branch of PNB. Upon arrival in Baguio, the money was taken directly to and deposited in the Philippine National Bank branch.

In the evening of January 8, 1945, I received a letter from Manager Lagdameo reporting that Maj. I. Moritani accompanied by the Managers of the Bank of Taiwan and the Nampo Kaihatsu Kinko, forced him to hand over to them all the notes deposited in trust with the branch. Also taken were all the cash in the vault. He also wrote that he was not allowed to communicate with me by phone nor see me personally.

I immediately reported the matter to Pres. Laurel. I told him that what the Japanese had done was clearly illegal and improper. I recommended that Laurel make representations to the proper Japanese authorities immediately for the return of the currency seized as it was being held in trust by the Philippine Republic for the banks. Laurel protested strongly to the Japanese Ambassador and the Japanese military authorities demanding the return of the money. Up to the time when I escaped from Baguio on April 12, 1945, the money had not yet been returned. All that we were able to get was a receipt for the money from Col. Utsonomiya. All the original documents are in my possession.