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Labor Action, 30 December 1946


Charles Stewart

U.S. Still Dominates the Philippines


From Labor Action, Vol. 10 No. 52, 30 December 1946, p. 6.
Transcribed & marked up by Einde O’Callaghan for ETOL.


The blunt truth is that Philippine independence was not an idea proposed and fought for on the high moral plan of liberty and freedom for oppressed colonial peoples. Behind the scenes, divergent interests between groups of American capitalists on the one hand, and the naval and military needs on the other, played the decisive roles.

Those groups who were originally in favor of outright independence with no free trade for the islands were the Cuban and domestic beet sugar interests, the large cattlemen and meat-packers who resented the competition of coconut oils, and those “labor” statesmen who were for extending the oriental exclusion to the Filipinos as soon as the islands were independent. There was a large group in the Navy and War Departments who felt that the Philippines were too far from the effective orbit of American “defense” and that to maintain the islands would be to invite invasion.

Arrayed against this group were the Spreckels and Fleishacker sugar and hemp interests, Hausermann mining interests, investors in the ore deposits, banks, insurance companies, the American Chamber of Commerce in the Philippines and that group of Compradores who were so dependent on the lucrative export trade. The “world-minded” group in the Army and Navy who realized the potential of airpower and new weapons wanted to be sure that some military and naval base would be maintained there.

Playing with independence

The Tydings-McDuffie Independence Act of 1934 created the Commonwealth of the Philippine islands with an assembly and a senate, but in that interim period until “complete” independence was to be granted, the U.S. would have control over defense and foreign affairs and the President of the U.S. would have the right to veto anything that was passed by the Philippine legislature.

Before the war, America tied the Philippine Islands closer to it by embargoes and strategic threats. This was part of American imperialist pressure on Japan. After Pearl Harbor, the islands were quickly conquered by the Japanese quickly lowering the standing of the great “protector” of the Filipinos – the U.S. The only defect of the U.S. military was that the war came too soon. In July 1941, General MacArthur stated on the occasion of the establishment of the Philippine command, “The action of the American government in establishing this new command can only mean that It intends to maintain at any cost its full rights in the Far East.”

McNutt further stated that the Philippines with their large civilian labor supply and hinterland provided a good base for operations in Asia. Under the original independence act only minor naval bases were permitted and no stationing of troops. Today there is established a major battle fleet base and a great number of American army troops.

The period of Japanese occupation, found the old export trade temporarily cut off. Japan which had been getting sugar from Formosa was more interested in mineral ores. The Compradores then quite easily transferred their allegiance and became Japanese puppets – including the present President Manuel Roxas, who held a ministerial post under the puppet regime of José Laurel.

Economic Exploitation

With the war over, the end of Japanese ties, and the wholesale destruction of Philippine cities caused a tremendous worsening of the conditions of the Filipino people. An UNRRA report on agricultural and food prospects indicates that:

The rice crop is 42 per cent short with only a 7 months’ supply on hand. The production of corn was 40 per cent below the pre-war level. The flocks and herds of cattle were reduced by 60 to 70 per cent. There were 25 to 30 per cent fewer implements than in 1941. Processing and transportation were extremely difficult because of wartime destruction. The devastation of large cities like Manila made the problem of food and health loom larger than the revival of economic life.

The native compradores faced with imminent independence and the sudden end of the advantages of free trade for Philippine exports, pushed for some economic guarantees to insure their continued prosperity. In this demand they were aided by those U.S. interests in the Philippines who had originally opposed independence. However, those competitive interests that Wanted the restriction of favors toward Philippine exports also had their say. The result of all this bickering was the amending of the original Tydings-McDuffie Act by the Tydings-Bell Philippine Trade Act passed by Congress early in 1946 and signed by President Truman.

The bait held out for the approval of this trade act was the appropriation of $620 million for “rehabilitation.” Four hundred million dollars of this sum went to property owners, public services and property got $120 million; and surplus war materials valued at $100 million was to be used for public utilities and buildings. Needless to say, the Roxas regime lost no time in pushing this act through the Filipino parliament.

The Philippine Trade Act provides that for eight years beyond independence absolute free trade would exist between the islands and the U.S. without any tariff restrictions whatever. After this eight-year period there would be a gradual imposition of tariffs for the following 20 years.

Section 321 of the act forbids the Philippines to charge any import tariffs lower than American tariffs for the same products. Duty free quotas were established on coconut oil, copra, sugar, and hemp but no reciprocal quotas on American exports to the Philippines. This provision, being included at a time when the U.S. is bellowing against the imperial preference trade arrangements that exist between Britain and her Dominions and colonies, has caused some resentment in British quarters.

Conflict with Britain

The influential Economist of London dated July 6, 1946, states:

“This is something very similar to ‘Empire Preference’ and it is no surprising that some critics in this country have regarded it as somewhat inconsistent with American pressure for the abolition of such preference within the British Commonwealth.”

The London Daily Express has stated on the same question:

“When America on the one hand grants preference to a people who have been under her tutelage and on the other hand, demands that the benefits of preference should be eliminated among British peoples, the negotiations become farcical.”

Another provision of this act chains the Philippine Peso to the American dollar until 1974 in the ratio of 2 pesos to the dollar. As even the report of the U.S. Tariff Commission states, this “would deny the Philippines the same measure of control over its currency as it would enjoy under the Bretton Woods Agreement (which created the International Monetary Fund – C.S.) under which it is free to alter the value of its currency by as much as 10 per cent without prior consultation with any other country.”

Section 341 of the bill stated that Americans would have equal rights to develop natural resources until 1974 on a par with Filipinos. This provision was even counter to the Filipino constitution which stated that at least 60 per cent of an enterprise had to be Philippine. The servile Roxas regime had the constitution amended to permit such a provision.

Under another section “any agency or instrumentality of the U.S. government” can retain title to any Philippine property which it has held or might acquire.

There is no need to prove further that the “independence” granted the Philippine Islands guarantees the continued economic and military domination of the islands by the U.S. The action of the Roxas regime in endorsing this Trade Act has indicated to the U.S. that the government there is “stable.” The renewal of free trade, even temporarily, has served to revive in a small measure economic life and avert for the time being an explosion on the part of economic life. This might be the military-strategic “angle” of the independence farce.

For Real Independence

This trade act called forth widespread opposition among the people of the Philippines. Four thousand University of the Philippines students passed a resolution likening it to the Japanese Co-Prosperity scheme. In parliament, 7 opposition delegates, from the Central Luzon region where the militant peasant Hukbahalape operate, were disfranchized by a simple majority instead of the two-third required under the constitution. The trade act was pushed through.

Is it any wonder that on April Fool’s Day of 1946 the newspaper Philippine Press wrote:

“On July 4, 1946, the U.S.A. will play on us a huge joke. On that day of days, to the accompaniment of martial music, parades, and speeches, generous, big-hearted Uncle Sam will, with a perfectly straight face, declare this country ‘free and independent’ ... but in years to come we will not be able to call our home our own. We will discover to our cost that the friend who entered our house has appropriated the entire building and we should be duly grateful if he graciously permits us to occupy the attic.”

The Filipino people will only achieve true independence, freedom, and material happiness in the struggle against U.S. imperialism and Its servants, the Roxas, the Osmenas and the rest of the compradore bourgeoisie. The struggle for freedom is inseparable from the fight for the expropriation of the large sugar and coconut plantations – in a word inseparable from the struggle for socialism. This campaign for socialism can only be part of the struggle for a Far Eastern Federation of Socialist Republics.

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