896.00/8–2550: Telegram
The Chief of Mission, United States Economic Survey Mission to the Philippines (Bell) to the Secretary of State
Belto 26. Personal for Rusk. UrTobel 24, August 22.1 Due to tax collections and sale of Treasury bills, cash position this month slightly improved but in all probability will deteriorate from here out. Real crisis may come about October 15 according to Governor Cuaderno. He can still get 20 millon pesos from IMF which he will discuss when he reaches Washington about September 20. Have not made up my mind as to whether we should help on report in present budget difficulty or let them stew in own mess. The experience would be a lesson much needed.
Had breakfast with Quirino this week at which time we went over situation. Cowen is sending you copy of our memorandum on conference.2 President readily accepted suggestion of technical assistance on all government fronts and is writing us a letter requesting that the US furnish such assistance. As we started to leave he asked if there is any chance of getting US aid for period up to December 31. I told him I doubted that it would be handled in time available with Congress trying to get away for elections and all Departments burdened with Korean situation. I said I thought he and his cabinet would have to work out of their short term difficulty. Also told him that he should call special session of his Congress for October 15 to November 1 to pass legislation imposing much higher taxes as [Page 1481] absolutely imperative that new taxes begin to flow into Treasury by January 1, 1951.
Believe further pressure on Quirino and final decision to help in budget situation can be left for further discussion with you in Washington. You should survey possibilities of getting amount not to exceed $20 million to be immediately available if we find it necessary. Their national defense expenditures may amount to not less than 10 million pesos a month including Korean expedition. Emergency as-assistance under section 303 of MDAA would therefore be of real benefit.
Believe it necessary to discuss main financial features of report with Snyder and Martin before conference on September 9, Bernstein3 and I are therefore leaving for Paris September 2, expecting to be home Thursday or Friday. Will you ask them to reserve some time for us either 4th or early on 5th.
- Not printed. In it Assistant Secretary of State Rusk expressed concern over the question of the timing and possible consequences of a further Philippine economic and financial deterioration in the immediate future. Rusk asked Bell’s view on when the United States should make an all-out effort to persuade the Philippine Government to adopt and implement adequate economic and financial measures. Rusk also suggested that it might be possible to meet some of the Philippines’ internal defense costs by funds provided under Section 303 of the Mutual Defense Assistance Act of 1949 (63 Stat. 714). That section authorized the expenditure by the President of $75 million for military aid in the “general area” of China (896.00/8–2250).↩
- See the memorandum of conversation by Bell and Marshall, August 21, p. 1474.↩
- Edward M. Bernstein, Chief Economist of the United States Economic Survey Mission to the Philippines.↩