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December 6, 1935

John H. Pardee spent one hour in my office; told me he had been one of the originators of the idea of an elected Filipino head of a “Protectorate” –in the Philippines– that he had persuaded Secretary of War Weeks, and he finally induced President Harding to agree, but as Manuel Roxas was at that time the only one of the Filipino leaders in Washington, Roxas had to cable the suggestion to Quezon and Osmeña who were in Japan on their way back to Manila and they wired back refusing. Pardee wants to know whether the Philippine Railway Co., should pay its Dutch bond holders on a gold basis, or whether the Manila RR. had decided that under American law they could pay only 4%. If so, the Philippine Railway Co., would pay only 4%, because the gold clause was not in their bonds and upon “instructions” from the Secretary of War in the time of Taft this had not been followed by a vote of their board. No written word of this exists in the War Department today.

Saw Colonel Paulino Santos, who was on his way to see General Valdes, wishing to criticize the campaign against the seventy bandits in Laguna Province. Said the constabulary had not sufficient men or enough experience for the task; and that rewards for the capture of the outlaws should not be offered, which would humiliate the Government.