His Excellency Manuel Roxas
President of the Philippines
On the Ratification of the Executive Agreement with the U.S.A
[June 21, 1946]
MR. SPEAKER, MR. PRESIDENT, MEMBERS OF THE CONGRESS:
I have asked that this joint session be called in order that I may report to the Congress on the actions now required to provide for future trade and economic relations with the United States.
The American Congress has lately passed a Philippine Trade Act and a Philippine War Damage Act Those two acts provide the pattern of United States aid for our reconstruction and for the rehabilitation of our national economy. Without this assistance we are faced immediately by disaster. Without the helping hand thus extended to us, I do not believe we can survive.
I do not pretend to tell this Congress that this legislation or the money voted us by the United States Congress will automatically accomplish the rehabilitation of the Philippines. It is my duty to advise you that we must look forward to years of sacrifice and toil to accomplish our aims. Our future is grim, brightened only by the patriotic determination of the Filipino people to succeed, at whatever cost.
In my report to the Congress on the state of the nation, I described our present precarious economic condition. We are today living through the most crucial period of our life as a nation. Each day brings its crisis to our attention. We are faced by difficulties and decisions which test our capabilities to lead our people.
The obstacles are great and numerous. They will require all our wisdom and courage. One of our sources of hope is the help we have been offered by the United States. That nation which is about to grant us our freedom has also tendered to us the means of solving our economic problems, a protected place in the American market for 28 years and funds to help us rebuild our shattered land.
Such are the purposes of the Trade Act and the War Damage Act. I am directing your attention today largely to the Trade Act which grants us the protection of American tariff preferences.
The American Congress, in order to provide those trade preferences, had to cut across all the protective features of American tariff law. These preferences are being offered exclusively to the Philippines.
A new and unprecedented legal formula had to be devised. That formula consists of an Executive Agreement to be negotiated by the President of the United States with the President of the Philippines. Authorization for the Agreement is contained in section 401 of the Trade Act. That section also requires the acceptance by the Philippine Congress of the Agreement and the implementation by law of all the terms of that Agreement. We must agree to continue these provisions in force after we become a Republic and finally we must agree to take steps to amend our Constitution to provide certain rights for American citizens which are now at variance with the Constitution. I am already authorized by the United States Congress to enter into such an Executive Agreement with the President of the United States but it is expressly provided that this Agreement cannot be proclaimed and put into effect until this Congress accepts the Agreement by law.
I wish to report to the Congress, therefore, that I am proceeding to negotiate this Executive Agreement in accordance with the provisions of the Trade Act. As soon as it is complete and duly signed, I will submit it to this Congress for approval. I hope to be able to present the Agreement to you early next week. I am making every effort to hasten the conclusion of negotiations in order to give the Congress as much time as possible to reach a decision.
This Congress has never been asked to deliberate upon a more vital matter. Your decision will determine the fate of this nation for the next generation. I need not ask the gentlemen of the Congress to lay politics and political expediency aside. I know that regardless of party or faction every one of you recognizes his heavy responsibility. I ask merely that you examine all the facts and make your decisions accordingly. My recommendations are well known by now. I propose that you approve the Executive Agreement that I will soon transmit to you. It is my considered judgment that to do otherwise would be to invite economic and finally political catastrophe.
The Trade Act and some of its provisions have been under violent attack in some parts of the press and in some public circles during the past two months. I would like to be able to say that public discussion has been in progress. I am afraid I cannot describe what has been going on as discussion. There have been misrepresentations and misstatements of fact. Some political leaders have been willing to make capital out of a question which should be above politics. I shall undertake, in the course of this report, to present the facts regarding this legislation and to correct some of the gross misrepresentations which have been made. I have no doubt as to what your decision will finally be. Yet I feel that the Filipino people have the right to be correctly informed, to have their fears set at rest, and to view in intelligent perspective the proposals which have been made.
There are perhaps some plausible arguments against some portions of the Philippine Trade Act. If I had been permitted to promulgate it by personal edict, it would have been different in many respects from the Act we are considering today. But no one man can hope to see his own ideas completely accepted in an act of Congress. It is well if that this is so.
Let me recall, for the benefit of those who might not know, the procedure by which the United States Congress enacts legislation. There are introduced into the Congress at every session an average of 8,000 different measures. Of this tremendous number no more than a few hundred are ever acted upon. The rest die in committee. Many desirable proposals suffer this fate. Any controversial measure to be approved by Congress must have a support so widespread as to demand priority over all others clamoring for congressional attention. Many proposals urgently desired by the national administration never see the light of day. In a Congress occupied by so many various and conflicting concerns, there is no other way.
Those of us who are old enough to remember can well recall the difficulties we faced in getting Philippine legislation through past Congresses when national problems in the United States were far less complex than they are today. It was only by a coalition of divergent interests that the first independence act was forced through the American Congress. It took that same coalition, backed irresistibly by an administration in the first flush of its early prestige, to secure the passage of the Tydings-McDuffie Act.
Today we have one strong advantage in Congress that we never had before: wholehearted and unselfish concern for our welfare. But all the sectional and economic interests must still be reckoned with and must be reconciled in any piece of major legislation affecting them.
Moreover, each administrative department of the federal government is called upon to make a minute inspection of all legislation to insure that it is in conformity with the overall policies of the United States. The views of all these departments must be taken into consideration. There is established by these means a long and dangerous gauntlet of individual guardians of particular interests and policies. Such a system is inevitable for the maintenance of a continuous national policy in a nation so huge and with interests so vast.
I have gone into some detail in sketching this background. It was not without reason. I hope you will now realize how difficult it is to get legislation which satisfies any particular group or which conforms to any ideal plan.
The Trade Act had to run such a gauntlet. For six months it was considered by the various committees of Congress. It was entirely revised no less than five times during this process. In the end it required no less than the personal intervention of President Truman to effect a reconciliation of many viewpoints and interests.
Filipino officials representing this Government during the framing of this legislation desired at first perpetual free trade but later agreed to 20 years of free trade. Senator Tydings proposed twelve years of gradually increasing tariffs. The State Department insisted upon the elimination of preferences at the earliest possible date. The Agriculture Department was opposed to granting the Philippines a sugar quota. There were other departments which had similar strong views on various aspects of the legislation. In September, 1945, the first Bell Bill was introduced providing 20 years of free trade. A few weeks later the first Tydings Bill was introduced providing twelve years of gradually increasing tariffs. In October, Senator Tydings introduced a second bill prescribing twelve years of declining trade preferences and authorizing 100,000,000 dollars in war damages. In November, President Truman brought about the compromise between the Bell and Tydings proposals. Senator Tydings, President Osmeña, Representative Bell, High Commissioner McNutt and representatives of the administrative departments agreed to a plan for 8 years of free trade and 25 years of gradually decreasing preferences. The period of declining preferences was later shortened to 20 years. That is substantially the proposal which is before us today.
Many hearings were held on this measure before both the House Ways and Means and the Senate Finance Committees. Those hearings extended over a period of six months. The Philippine representative in Congress, Commissioner Romulo, testified many times. High Commissioner McNutt testified at great length and on many occasions. President Osmeña sent letters to the Congress which are in the record for all to read. As long ago as last October 12 he appealed for the passage of the Bell Bill. Commissioner Romulo has consistently asked the approval of this measure in all its various forms. Commissioner McNutt spent two and a half months in Washington, from February until April, in a supreme and finally successful effort to get this legislation through. Without his patient and tireless efforts, I do not believe that any of the Philippine legislation would have been passed before now.
The Trade and War Damage bills were finally approved in April of this year. Much has been said recently regarding so-called onerous provisions in these Acts. But all the violent protests are of very recent vintage. It is a fact that there was no formal protest from Philippine sources until this legislation was on the point of passing―on the eve of our national elections, to be exact. Let us examine some of these protests, with some reference, perhaps, to their timing. I shall speak first of all of section 341 of the Trade Act, which provides as follows:
“The disposition, exploitation, development, and utilization of all agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces and sources of potential energy, and other natural resources of the Philippines, and the operation of public utilities, shall, if open to any person, be open to citizens of the United States and to all forms of business enterprise owned or controlled, directly or indirectly, by the United States citizens.”
This is the so-called equal rights provision. In order to fulfill the obligations imposed upon us by this provision we must amend our Constitution. Had I been in Washington at the time, I would have vigorously protested against its unilateral quality and, had it been insisted upon, I would have suggested other means of accomplishing the same objective. If we trace the legislative history of this provision, we will find that it was in the first version of the Bell Bill introduced on September 25th, 1945. It was accepted at that time by the Commonwealth Government. I have assurance that it was approved by a former Secretary of Finance as well as by the head of the Commonwealth Government. No opposition to it was even expressed until November 16th, when it was mildly suggested by the Resident Commissioner that this provision should better be, included in a treaty of friendship. But the same provision persisted in every successive version of the Bell Bill. It was insisted upon most vigorously by Representative Harold Knutson, the author of what is now known as the Knutson Amendment.
Today we are faced by the fact that section 341 is a part of the Trade Act. There is no way of divorcing it from the Trade Act. If I could, I would remove it, not because of the alleged dangers it holds for us—I believe these to be non-existent―but rather because of the manner and form in which it is included. I do not believe that these reasons should weigh too heavily with us at this time, confronted as we are with the fact that this provision is part of the law. I have no fear whatsoever that the granting to American citizens of rights equal to those of Filipinos in the development of our natural resources will bring about an imperialistic exploitation of our country. This was not the intention of Congress. I am certain it will not happen.
It is perhaps too distant in the past for most of us to remember, but it is most interesting to note, that the provision in our Constitution protecting our natural resources from exploitation is not of Filipino but of American origin. The prevention of this exploitation has been the constant concern of the American Government from the very beginning of the occupation in 1898. Our laws restricting the acquisition of public lands and the development of our mineral resources can be traced back to the first Philippine Bill approved by the United States Congress in 1902. These wise provisions were implemented by the Philippine Commission and consistently repeated in the successive organic acts until finally these provisions found lodgment in our Constitution.
It seems to me therefore that to suspect the American Congress of conspiring to open the flood-gates to an imperialistic deluge, is to deny every fact we know. To impute this motive to the United States Government is to ascribe evil to virtue itself and to put an ugly countenance upon the noble stewardship maintained here by the United States for the past 48 years. A nation that for these many years has striven patiently and at great cost to uplift us politically and socially, a nation that has preserved for us our national patrimony so that when we shall become independent we may enjoy it in full measure and pass it on to our posterity—such a nation does not deserve the scurrilous attacks which have lately been made. I can ascribe those attacks only to lack of information or to malice. They do not befit our dignity as a people or nation. They arouse resentment among our trusted friends in Congress to whom it is proposed that we appeal for redress.
Today those who make these attacks are furnishing ammunition to the enemies of democracy elsewhere in the world. They are besmirching the good name of the nation which, more than any other, is the hope of all the underprivileged and defenseless peoples of the earth.
No, I will not attribute such motives to the American Congress. I will not believe that Congress intended any unworthy purpose. The Congressional intent was simply to invite and encourage American capital to invest in the Philippines and aid in our rehabilitation. The equal rights provision was not designed as a protection for American interests already here—it is intended to reassure potential investors that the Philippines is a safe area for enterprise, safe against discrimination for the next 28 years. Every responsible Filipino leader I know desires American capital enterprise and know-how to participate actively in our reconstruction. Our rehabilitation would be impossible without such assistance. The only question is the means of inviting that capital to venture here. Congress selected a means with which we may disagree as to form. We cannot disagree as to the objective. To seek the elimination of that provision at this time would be to warn American investors and American enterprise not to come to the Philippines. That would be suicidal for us. I will not propose it.
That does not mean that we should not be on guard against ruthless exploitation and imperialism. We must maintain a constant vigilance against the dangers of such exploitation by persons of any alien nationality, or even by Filipinos. We now have ample legal safeguards to accomplish that. The Government need not open up lands or resources for development or can halt at any time the dissipation of such resources. The Government itself can assume the responsibility of their development. The Government has the power to expropriate public utilities; the Government has the power to tax and control conditions of employment. Of course we shall not use those powers except to prevent abuses. But if abuses occur, we shall not hesitate to use the legal authority that is already available or set up new devices of restriction and control to protect our national interests. The Executive Agreement will set up no barriers to our exercise of all legal means to prevent predatory exploitation or the domination of our economy by selfish economic interests. Commissioner McNutt himself has publicly urged us to maintain such safeguards. And in the very remote possibility that the American Government should ever change its policy and seek to further imperialistic designs here, we have the recourse of terminating the Executive Agreement on five years’ notice.
I wish to emphasize again and again that all the arguments which have been made against this provision have been based not on facts but on fears. I refuse to be frightened by the ghost of imperialism. Americans have had equal rights—potentially more than equal rights― for 48 years in the Philippines. America could have made of the Philippines a Belgian Congo. I look about me and see no evidence of outrageous exploitation. Instead of being made slaves we have been freed. Instead of teaching us obedience, America has taught us love of liberty. Instead of overseers, America has sent us teachers. Since 1913, the balance of trade between the United States and the Philippines has been heavily in our favor in every single year until the outbreak of the war. If this provision, whatever its form, will help us survive economically as an independent nation, I will go along with it for the emergency period. I do not propose to sacrifice the national welfare on the altar of pride. I will not be Lazarus on a heap of ruins.
At the proper time I shall propose the required amendment to our Constitution but I shall recommend it as an Ordinance appended to the Constitution to be effective only during the life of the Executive Agreement.
I will now refer to section 402, sub-section (f). This is the provision pegging the peso to the dollar. It has been cited as an infringement upon our sovereignty and free choice. Those who make that citation forget, perhaps, that the peso is already pegged to the dollar in the Bretton Woods International Monetary Agreement which has been duly ratified by the Philippine Senate. In a world searching for security, the stability of monetary values is an economic essential. We cannot expect to retain the freedom to raise or lower the value of our peso and retain the confidence of traders in other parts of the world. As far as pegging the peso to the dollar is concerned, the dollar is the standard of value for all world currencies today. By connecting our peso with the American dollar, we stand within the magic and charmed circle of standard value, the dollar area, to which all currencies are being attracted today. This provision does no more than require us to do something which it is to our own unquestioned interest to do. But if this arrangement should work a hardship on us, we are not without recourse. The ratio of the peso to the dollar can be changed with the approval of the President of the United States.
Some voices have been raised in protest against the absolute quotas provided for certain of our exports to the United States. It is said that this is discrimination. Such a charge cannot in my judgment be maintained. These quotas are the very same—in the case of cigars, our new quota is greater―that we had in the American market before the war. The quotas were originally established as a compromise to allay the opposition of American commodity interests who had protested in years past against unlimited imports from the Philippines on a duty-free basis in competition with similar American commodities.
These quotas are now being continued in the post-independence period as an offset against the trade preferences we are given. But these fixed quotas are now a source of considerable advantage to us. By establishing a ceiling on the amount of these commodities we can ship to the United States, we are automatically forced, after our production reaches quota limits, to diversify in other non-quota fields. That is one advantage we gain. A second benefit lies in the 28-year insurance of these quotas. We are assured for that period of time of having a market for these goods up to the amount of our quota. No other country has such an assurance.
In the case of sugar, all producing areas including those inside continental United States are under quota, but none of these areas has a quota assurance for a period longer than two years. In the Philippines we are given a 28-year guarantee, a guarantee which supersedes any sugar act which Congress might pass in the future. The same is true of cordage.
The President of the United States is given authority to establish quotas on other Philippine commodities entering the United States when those imports threaten American producing interests. That is also a fair safeguard. As long as the United States grants us the privilege of preferential tariffs, we must respect America’s right to safeguard her own interest against Philippine products which have a market in the United States as a result of tariff protection.
We are told that there are no quotas on American commodities entering the Philippines. For the time being we desire none. We want as many imports as we can possibly get. If, during the course of the 28 years of the Agreement, we find any Philippine industry threatened by imports from America, we are free, in my judgment, to establish quotas on those imports or devise other means of protecting our infant industries. I find nothing unreciprocal about this provision.
One other aspect of the rehabilitation legislation against which criticisms have been leveled is the so-called tie-up between the Trade Act and the War Damage Act. That connection is established by section 601 of the War Damage Act which provides that no war damage payments in excess of 1,000 pesos may be made to private individuals or corporations until the Executive Agreement has been proclaimed to be in effect by the President of the United States. This provision has been described as a club to require our acceptance of the Bell Act. I consider this allegation to be completely baseless. Honestly speaking, I see no particular purpose in section 601 since to my mind the Trade Act is as essential, if not more so, to our national welfare as the War Damage Act and it is inconceivable to me that the Executive Agreement provided in the Trade Act could be rejected. There is a natural and organic connection between the two Acts. In the original Tydings version they were both in the same bill and were separated only for reasons of legislative convenience to make simultaneous consideration in the Senate and the House possible.
Actually and legally section 601 associates only part of the war damage payments with the Executive Agreement. Regardless of whether we accept the Executive Agreement, the P240,000,000 for the reconstruction of our public buildings, roads, bridges, and harbors are still to be spent in our behalf. The P200,000,000 worth of surplus property will still be transferred to us. Private war damage payments up to 1,000 pesos are to be made in any event. The other payments are made contingent upon the effectiveness of the Executive Agreement only because they are part of the pattern of economic reconstruction. It would be senseless, for instance, to make payment for the reconstruction of a sugar central or a coconut mill if there were no market for the sugar or the coconut oil. It was the clear and consistent intention of Congress that the War Damage funds be used for the rehabilitation of industries destroyed by war. Special and careful provision is made in the War Damage Act to prevent individuals from collecting war damages and transferring the payments out of the Philippines. Buildings and structures must be rebuilt or in process of rebuilding, as a condition precedent to receiving war damage payments. Hence it was decided that these payments would not be authorized unless there were trade provisions permitting these industries to exist.
Let us not imagine that the war damage authorization represents a windfall of dollars ready to be distributed among us for whatever purposes might meet individual fancies. These funds are carefully earmarked and their expenditure safeguarded so that they must be used for rehabilitation purposes. But these funds alone are only a part of the amount of money that will be needed to rebuild our land. Vast amounts of fresh capital must be attracted to accompany the war damage money to give us a productive economy adequate to our needs. Of the $620,000,000 authorized for war damage payments, $400,000,000 is set aside to compensate for damage to private property. That $400,000,000 must be divided among all the claimants and the number of claimants will total more than half a million. According to the survey of the War Damage Corporation of the United States Government, total losses suffered by private persons and corporations amounted to $464,420,000. Damage inflicted on church property amounted to $139,000,000. These figures are today considered extremely conservative. All these losses must be met out of the $400,000,000 authorized by Congress. These losses include automobiles, household furniture, and office equipment. The buildings which were damaged include club houses, auditoriums and theaters. The amount of money which will be paid out for the rehabilitation of productive enterprises is but a part of the total available amount. And if that amount is the only money we have for the rehabilitation of our economy, those who pin all their hopes on war damage payments may look forward to a rude awakening.
It was not the intention of Congress to make these payments a bribe to induce our acceptance of the Trade Act, because Congress well knew the war damage money is but a fraction of the capital we require. The Bell Act provision and the subsequent encouragement of trade and productive enterprise are in themselves intended as an inducement and as a lure for capital investment here. Without that investment we are lost. No bank will lend us money unless we have a productive economy. We cannot have a productive economy without markets and without the capital required to produce for those markets. The three elements of our rehabilitation are first, a market for our goods; second, capital to enable us to revive our production; and third, labor and enterprise to produce. To coordinate this trilogy the United States Congress provided, first, trade preferences; second, assurances to capital; and third, a part of the funds we will need to rebuild and reconstruct. To strike out any one of these elements is to destroy the whole of the master plan for our rehabilitation.
I have gone into great detail in regard to the so-called onerous provisions of the Trade Act. It might be well by contrast to recite the beneficial provisions regarding which there can be no question.
The Trade Act provides eight years of completely free trade and twenty years of gradually increasing tariffs or declining duty-free quotas as the case may be. For sugar and cordage, for instance, increasing tariffs are provided. For coconut oil, tobacco products and some others which could not withstand the imposition of any tariffs, declining duty-free quotas are stipulated.
These are provisions which have never been made for any other foreign country on earth. These are provisions which violate America’s basic international trade policies. Yet without these provisions, our industries cannot even begin to function. The tariff preferences are basically and fundamentally essential to us.
When consideration of this legislation was begun seven months ago, it was believed an impossible task to secure congressional approval of such provisions. But in the end, they were approved.
The tariff duties, when they begin to be assessed against our products in 1954, are to be assessed at the lowest world duty charged to any nation in the world including Cuba. That means that Cuba, for instance, which has enjoyed a 20 per cent preferential in the American market since 1901, will be at a disadvantage compared to the Philippines until 1974.
It also means that products which are found on the free list for Cuba, and for Cuba alone, as, for instance manganese, will be on the free list for the Philippines for the full 28-year period of the Agreement.
We are guaranteed a two-cent preferential in processing taxes on our copra, also for 28 years, thus guaranteeing for that period an exclusive market in the United States for Philippine copra. No other country can compete in the face of this preferential.
Whereas, the United States agrees to tie its hands in the allocation of sugar quotas and in the assessment of processing taxes on coconut oil for those 28 years, we make no such concession. This is a provision completely unilateral in our favor, completely non-reciprocal.
The United States, under this Act, in effect revises all its tariff laws, all its reciprocal trade agreements with all the countries in the world, departs from its own international trade policy, and sets up a special trade relationship with the Philippines.
It might be well for us to remember that our forthcoming independence is a free grant by the United States. Added to that grant are the economic privileges I have already referred to. The nation whose productive power and armed might brought Germany and Japan to their knees is committed to the guarantee of our security and of our survival. We could have no more magnificent sponsor of our independence.
We are a prostrate nation. The apparent well-being of some of our citizens today leads them to puff up with dignity, like the bullfrog of Aesop’s fable. But let us look at the real plight of our people, and the real situation which stares at us from every quarter.
What if we reject the Executive Agreement, and assert our pride and dignity and demand that Americans stay out of the Philippines and refrain from making investments here? What is our situation then? What are our prospects, on the one hand of obtaining a better bill, and on the other of getting along without the Trade Act at all? In the first place, I do not believe we could at this time get a better Act. After July 4th, we will be without congressional representation. Any proposition submitted to Congress in our behalf after July 4th must be the product of an inter-departmental agreement within the United States Administration. I do not think such an agreement possible without months of deliberation. And while these deliberations are going on, the Congress will adjourn. This is an election year in the United States.
While the present Congress is favorably disposed toward us, I cannot forecast the complexion or attitude of the next Congress.
We, ourselves, are not agreed on what a perfect trade formula would be. Some are against free trade. Some are for perpetual free trade. Some wish our pre-war industries revived. Some wish them to remain destroyed.
Should we be so foolish as to ask the United States Government to reconsider, I doubt if there would be legislation enacted before 1948. I doubt whether it would be as satisfactory legislation as that which we have today.
What of the other alternative, of dispensing with the Trade Act entirely?
Let us look at the facts of life. After July 4th, without this Executive Agreement, we will be on a full foreign duty basis, like any other foreign nation, with respect to the United States.
The sugar, tobacco, and coconut oil industries will be dead. So, too, will be embroideries, and pearl buttons, and probably cordage. Our exports for some years to come will consist of copra and abaca, and chrome. There will even be a tariff against our manganese. It will be many months before we can mine gold again.
That means, at pre-war production levels, an income from exports of approximately 60 million pesos, using current prices as a standard. Our imports this year from the United States will be valued at approximately 600 million pesos. If we are to rehabilitate ourselves, the amount of imports must be increased next year. The result will be that at the end of 1947, we will have denuded the Philippines of practically every peso and every centavo which the American GI’s and others brought in here, the so-called nest-egg on which we have been living and doing business for the past 18 months. We will be penniless.
It is easy to say that we can raise our own food and live, as we lived under the Japanese. Do we wish to push our people back into the middle ages of subsistence and economic isolationism? Of course, we do not. But unless we attract capital from abroad, and even more important, unless we can begin immediately to increase our exports of our major cash crops, we are doomed to disaster and worse.
We must be reminded that should we reject this Trade Act, and deprive ourselves of preferential markets, we prejudice completely our applications for loans from the United States Government. No government would lend us money in the absence of a productive economy that would permit us to repay the loan.
I do not think that there is any question of confronting such a situation. There is no reason to expect that this Congress will refuse to meet this question in its true light.
I have described and defended the Trade Act at great length. I sincerely believe that we have only one choice, and that is, to accept it. Let me point out to the Congress, that were we to be actuated by partisan considerations, the majority party might oppose this legislation. We are not responsible for it. We had nothing to do with its formulation or passage. But we do not intend to take a partisan attitude toward a question which involves our national existence.
One supplementary reason for this stand is our strong conviction that, as we approach independence, we must establish firmly the principle of continuity of foreign policy. I know of no more vital principle for the promotion of the respect of the world for our nationhood, for our stability, for our political maturity. I will not put this Government in a position of denying the commitments entered into with the United States by the last administration, merely for a doubtful political advantage. I believe it my patriotic duty to follow this policy. I hope to see developed among our people an understanding that politics halts at the water’s edge. We will not, we must not, play politics with our commitments abroad.
I have placed before you a momentous choice. There is no time for delay. We cannot gamble with the lives of our people. They must have assurance of future work. We must draw now the pattern of national reconstruction to permit the development of a broader, a richer, a more productive economy, than we ever had in the past.
All the dreams we have dreamed, of democracy, of social security, of agrarian reform, of prosperity and happiness for our people, hinge on your actions and your debates. By the wisdom of your decisions hangs the fate of this nation. In imposing this responsibility upon you, I need not go further. I need not indicate to you at any greater length the course you should follow.
I appeal to your patriotism and to the love I know every member here holds for his native land, to act in good conscience for the welfare of his country. Chart now the course this nation must follow in the years to come. Tell our people now that you have faith in our nation and in the ability of their Government to safeguard them from evil. Tell them that their struggles and sacrifices of the past four years were not in vain, and that the Republic of the Philippines is soon to reap the benefits of those sacrifices and struggles.
The basic blueprint of our economic recovery is here. It is for you to accept. It is for you even to reject. I assure the Congress that in accepting and in implementing the program that has been designed, they will be giving to the people of the Philippines, and to our friends and well-wishers throughout the world, the signal that we are on our way in a great crusade, 18,000,000 strong, to reach the haven of economic security which all the world is seeking today.
NOTE.―The President was authorized by Congress on July 3, 1946, in the last law of the Commonwealth, No.733, to enter into this executive agreement by which the Philippines binds itself to carry out the provisions of U. S. Public Law 371, approved on April 30, 1946, entitled “An Act to Provide for the Trade Relations between the United States and the Philippines, and for Other Purposes.”
The Bell Act, or Philippine Trade Act of 1946 as this law is generally known, required the amendment of the Philippine Constitution so as to allow American citizens and corporations to exploit the natural resources and operate public utilities, which privilege was restricted to Filipino citizens and corporations. Without this constitutional amendment, the Philippines would not be able to enjoy the trade and other privileges offered in the Trade Act as well as in its companion measure, the Philippine Rehabilitation Act of 1946, otherwise known as the War Damage Act.