Tag Archives: Commonwealth

Manuel Roxas, Ratification of Executive Agreement with USA, 1946

21 Oct

Speech of His Excellency
Manuel Roxas
President of the Philippines
On the Ratification of the Executive Agreement with the U.S.A.

[June 21, 2946]


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.


Manuel Roxas, Inaugural Speech

20 Oct

Speech of His Excellency
Manuel Roxas
President of the Philippines
As President of the Commonwealth of the Philippines

[May 28, 1946]


I have taken my oath as President of the Philippines to defend and support the Constitution and to enforce the laws of our country. I assume in all humbleness the complex responsibilities, which you have chosen to give me. I pledge my effort and my life to discharge them with whatever talent, strength and energy I can muster. But those responsibilities must be shared by the Congress, by the other branches of government, and, in the last analysis, by all the people of the Philippines who face together the great test of the future. I would not be content to assume this office, I would not have the hope to discharge the duties assigned me if I were not confident that my country- men are ready and capable of sharing in full measure the work and sacrifices which lie ahead. Certainly no people in recent history have been called upon to surmount the obstacles which confront us today. But I have supreme faith in the ability of our people to reach the goals we seek. I ask from the nation the full and undivided support of heart, mind and energy for the necessary tasks which await us.

In our traditions there are ample sources of inspiration. From the recent past we have the standard of dynamic leadership erected by Manuel Quezon, that mighty champion of independence and great friend and benefactor of the masses of the people. We have the spotless integrity and noble patriotism of Sergio Osmeña who grasped the banner of leadership when the incomparable Quezon was taken from us.

Our appointment with destiny is upon us. In five weeks we will be a free Republic. Our noble aspirations for nationhood, long cherished and arduously contended for by our people, will be realized. We will enter upon a new existence in which our individual lives will form together a single current, recognized and identified in the ebb and flow of world events as distinctly Filipino.

Yet look about you, my fellow-citizens. The tragic evidence of recent history stares at us from the broken ruins of our cities and the wasting acres of our soil. Beneath the surface of our daily strivings lie deep the wounds of war and economic prostration. The toppled columns of the Legislative Building before which we stand are mute and weeping symbols of the land we have inherited from war.

Unemployment is increasing, as the United States armed forces decrease the tempo of activities here. Our soldiers are being discharged in growing numbers to swell the ranks of those who must find work and livelihood. Many of those who have work are employed in trades dependent on the rapidly shrinking expenditures of the Army and Navy.

There is hunger among us. In the mountain provinces and in other far-flung areas of our land children starve. Prices race with wages in the destructive elevators of inflation. The black market with all its attendant evils of disrespect for law and public morality thrives in the channels of commerce.

Plagues of rats and locusts gnaw at our food supplies. Public health and sanitation have been set back a quarter of a century.

Housing for most of our urban citizens is shocking in its inadequacy and squalor. Disease and epidemic threaten, and we have to thank the Divine Providence that the toll of death is still relatively small.

Our communications are destroyed, stolen or disrupted, and many of our countrymen are still today cut off from the main currents of national life. Schools have been burned and teachers have been killed, our educational system is in large measure a shambles.

I have sketched a dark landscape, a bleak prospect for our future. I have not meant unduly to dramatize our ills. I do not wish to parade the sackcloth and ashes of our people. Nevertheless it is necessary to know the truth.  Many of us live today in the chambered Nautilus of our own mental construction. There are those who close their eyes to the problems that confront us, and prefer to direct the national attention and the national energy at objects outside ourselves, at fancied enemies, at fancied fears of imperialistic aggression. The coincidence of easy money and high prices gives to some of our people the false illusion of national prosperity and the mad notion that we have time to dally and debate. The prosperity of money and prices is a hallucination, a nightmarish dream resulting from the scarcity of commodities and the influx of a half billion dollars of troop money. Soon, very soon, we must awake from that dream. We will find that mere money, bloated by inflation and circulating in narrow channels, does not bring about prosperity and national well being. Every day, that money is being siphoned from our land by more and more imports—not productive imports, but imports of consumption. The well-being of the tradesman alone is not the well-being of our people. Disaster awaits us tomorrow if we do not rouse ourselves and get back to work, to productive work.

I recall our national temper and our national condition five years ago, the last year of the generation of peace.

We had then a land of comparative plenty. The products of our fields and farms were flowing in a never-ending stream across the oceans to the United States, to Europe, to China―even to Japan and Russia. The Government was rich in revenue from taxes, from customs, and from the refunded collections on Philippine products processed and taxed in the United States. We were in the midst of a program aimed at the eventual achievement of social justice for the underprivileged elements of our population. Yes, we had those elements then, as we have them now. We must not imagine that economic maladjustments, land hunger and farm tenancy are problems born of recent years. They are as old as our present civilization in the Philippines.

The brutal hand of war spread its breadth across our land and blotted out not only our progress toward a fuller life for all, but our entire economy, all the economic goods and tools we had amassed by a century of labor. We had not expected to be a battleground. We had not expected war. Nor were we alone among the peoples of the earth in our lack of understanding of the military aims of our enemies.

We were treacherously attacked; soon, despite the unmeasured heroism of our men at arms and of their gallant American comrades on Bataan and Corregidor, despite the magnificent courage and leadership of General Douglas MacArthur, our land was conquered. A new sovereignty, by dint of force, was imposed upon us. From the beginning the Filipinos had indicated by word and deed that the fate of the United States in this global conflict was the fate of the Philippines. President Quezon offered the United States the blood and treasure of the Filipino people until victory came. We did not then realize how complete that offer was!

For three and a half years we were an unwilling part of the Japanese sphere of conquest. But though the land was possessed, there was never a moment in which our hearts or convictions faltered. The Filipinos discharged their debt of allegiance to the United States with a payment of loyalty which has never been surpassed.

I need not refer further in phrase or word to the gallantry of our countrymen in their resistance to the Japanese. The deeds of the Filipino people have been celebrated wherever men have gathered to pay tribute to heroism, courage and fidelity. Their gallantry has become an epic, a byword, a standard by which all heroism many be measured. Many have tried to explain that heroism and that loyalty. But like all heroism it rises above the logic of mere reason. I judge it a proof and product of the passion for democracy  and freedom which America has taught us during 48 years  That teaching took deep root in a soil made fertile by our great heroes of pre-American days—Rizal, Mabini, and Bonifacio. Our hearts were ready when the Americans  came in 1898. By the manner in which America discharged her trust, we developed a devotion to that great nation which I know will exist for all time.

A nation is something more than the people who inhabit a geographic area. It is a spirit, a tradition and a way of life. There have been Americans whom we have disliked. There have been American administrations from which we have received scant comfort. There have been American Governors General with whom we have quarreled. But we have never had cause to waver in our confidence or faith in America. We have clasped to our  bosom her system of government, her language, her institutions, her historical traditions. We have made them ours. We cannot forget this fact and this great truth. We are to be a free nation largely because we were aided in that direction by the love of liberty and the goodwill of the American people. If we succeed as a nation, if we are able to survive as a nation—and of course we will—we will have America to thank. I bear witness to the fact that America stands ready to help, without selfishness, without motive except to reward us for our loyalty and to advance in our land the great cause of democracy and freedom for which Americans and Filipinos died together, in many corners of the earth in the past four years.

I find no dream of empire in America. While cognizant of power, America, as a nation, is troubled in the use of that power by an earnest and heartfelt desire to advance not the cause of greed but the cause of freedom. We are and shall be a living monument to this fact.

Yet we have today in our own land a few among us who would have us believe that we are in danger of an imperialistic invasion from the very nation which is granting us our sovereignty. They would have us believe that the American Republic, resplendent in her power and prestige as the leader of democracy and as the spokesman for freedom, would lend herself to a theft of our national heritage for the sake of a thimbleful of profits. No, my mind will not stoop to as low a conceit as that. The nation which spent three hundred billion dollars to arm the hosts of freedom, the nation which has spent and is spending so much of its substance not only to free but also to feed the hungry peoples of the earth will not do that. Small minds see small deeds. I will not place my Government in the position of accusing the United States Congress of willingly conspiring to cheat us of our birthright. I admit the possibility of error in the United States Congress as in any other constitutional body. But I have faith that justice will be done us by a country which has been our mother, our protector, our liberator and now our benefactor. In this world, the balances of justice move only on great momentums. I am firmly convinced that when the scales point unmistakably to injustice being rendered us, the United States Congress will grant us redress in full and generous measure.

I have no fears from a nation which idolizes humanity and crowns with laurels those who fight for freedom and brotherhood. There is no greater regard in America today than the national regard for our people. Shall we sacrifice that rich regard on the altar of petty pride and foolish fears? Shall we hold up to world obloquy the country whose legions liberated us for freedom? Shall we give comfort to the enemies of liberty in the crisis which now grips the earth? The forces of evil may be defeated, but they are not dead. And there are new forces of evil growing even in nations which were our allies. I see no such forces reflected in the policies of the United States.

Let us strengthen as much as we can the hand of the nation which stands clearly in the world’s confusion today for democracy and for justice under law. Let us bide our time for the rectification of alleged impositions. When the time comes, let us present facts rather than fears.

The gratitude of the Filipino people to America is great and enduring. Our feeling toward America is not represented by the loud complaints of an articulate few in our midst. I say in the presence of our great American High Commissioner―one of the ablest and most unselfish of our advocates and friends―that the America of Franklin D. Roosevelt and of President Truman is a land we love and respect. The mighty concern that these men have felt for our welfare dwarfs the magnitude of our fancied ills against the United States today.

Meanwhile, with the tools, which have been provided us, we must move forward without pause to bind up this nation’s wounds, to toil, to make, and to build. We have, and will have, a market for our produce. We must concentrate on production, on ever-increasing production. This nation must produce to live. We must have income from abroad―income from exports. We must have that income so that we may buy the machines, hire the technical skills, and, for a time, buy the food, which we need to sustain our strength and impart vigor and health to our young. That task must be begun now, today. The time for action has come. The national energy, in all its parts, must be focused on a single purpose, on the rehabilitation of our destroyed and ravaged economic enterprises―on rice, on sugar, on coconuts, on abaca, on coconut oil, on cigars and tobacco―on gold and chrome, and manganese and lumber. We must foster the enterprises which will raise the national income and bring in financial returns from abroad.

But our aim is not alone to rebuild the economy that was broken and destroyed by war. That is only the beginning of our task, stupendous as it is. We must rebuild, repair, and replace. We must feed the hungry and heal the sick and disabled. We must care for the widows and orphans of our soldier dead. We must wage war against inflation and unemployment. That is the obvious foundation stone of national rehabilitation. But we know, we have long known, that the narrow economy of the past must be broadened. The national structure must be sufficient to house the energies of the whole people. For the Philippines to fit into the pattern of the 20th century, to take its place as an equal among the nations of the earth, we must industrialize; we must make as well as grow. Only in this way can we raise to substantial and permanently high levels the living standards of our people. To support this kind of economy, the producers must become consumers and purchasers. They must have the income with which to buy the products of their toil. Higher wages accompanied by efficient and increased production are the true road to full employment. Increased wages and income in pesos must represent increased purchasing power. Prices must be kept under control until production and importation reach saturation levels. We must avoid a price structure based on scarcity. We must avoid a wage structure based on inflated prices. Meanwhile we must encourage the production of more and more of our primary requirements, production of things we ourselves will consume. The encouragement of production for consumption and the increase in the purchasing power of the masses are parallel paths which we must travel.

Our people are well known for their handicraft and for their ingenuity. There are available in the world today tools and machines of which we must become the masters. There are many natural resources in our land which can be processed by the methods of modem technology into finished items for our consumption and for sale abroad. There are many small industrial and business enterprises which must attract the skills and talents of our citizens. Every encouragement must be given the Filipino to participate in all the operations of our new economy at all its levels. But this participation cannot be a grant of government. Participation in business and industry cannot be magically induced. Opportunity can be afforded but it is the responsibility of the individual and groups of individuals to strive for and capture that opportunity and, by so doing, become integral parts of the expanded economy of the nation.

Tools and implements will be needed to make this dream an actuality. Capital will be required. The savings of our own people will be called for, but they are inadequate. We must invite foreign capital, American capital, investment capital.

We may well wisely look to the great international organs, the International Monetary and Rehabilitation Bank and others, for financial aid. We may look to the United Nations Relief and Rehabilitation Administration. But for some of our needs we can only obtain assistance from the United States. In addition, we must remember that the United States is the source of most of the finances of all these organizations. What we can secure directly from the United States is far better and more expeditiously obtained than through the devious channels of international action. We must bear in mind in this and other connections that the great international organization of the United Nations, lofty in concept, is yet only an infant in the arena of world affairs. Recent events have demonstrated to us, as to the rest of the world, that the skeleton of the United Nations Organization must grow flesh and develop muscles of its own before it can be depended upon as a repository of our immediate hopes.

We will be as wholehearted as any nation in our devotion to the ideals of an indivisible peace and an indivisible world. We will maintain with all our strength and all our power our obligations to the United Nations, and to the causes set forth in the United Nations charter to which we are a signatory.  In the same way we will maintain friendly and honorable relations with all our neighbors and look forward to the day when peace and security will be maintained by mutual consent and by the collective conscience of mankind.

But until that happy day dawns upon us, we can much more securely repose our fate in the understanding and comradeship which exist between the Philippines and the United States than in the hope of an international morality which, however desirable, is still today in the process of development. We are fortunate to have as the guarantor of our security the United States of America, which is today the bulwark and support of small nations everywhere in the world.

I have spoken of the past; I have spoken of the future; I have not spoken much of the present. I have suggested some of the problems we face. I have not referred to one of our most urgent ones.

In some few provinces of our land the rule of law and order has yielded to the rule of force and terror. Using economic injustice as a rallying cry, demagogues have destroyed the precious fabric of public faith in democratic procedure. The faith of the people in government and in law must be restored. I pledge myself to rectify injustice, but I likewise pledge myself to restore the role of law and government as the arbiter of right among the people.

A great American who loved mankind and died in its name, Abraham Lincoln, once said: “Among free men there can be no successful appeal from the ballot to the bullet…they who take such appeal are sure to lose their case and pay the cost.”

This great humanitarian could not be accused of placing the values of law above human values. He recognized as do all right-minded men that if government has one function, it is to insure the reign of law for the protection of the weak in their inalienable rights―the right to life, liberty and the pursuit of happiness. This Government is pledged to maintain the rights of the underprivileged with all its strength and all its power. It will see justice done to the poor, the lowly and the disinherited. But it will not sanction, it will not permit, it will oppose with every force at its command if necessary the imposition of extra- legal rule over any section of this country by any group of self-anointed leaders or individuals. The show of arms and terror will not daunt us. Defiance will not obtain from us a single additional iota of justice.  Justice is absolute and is not to be measured by strength of contention.

We will move with maximum speed to cure the ills which beset the landless and the tenants, the hungry and the unemployed. Only unavoidable lack of means can delay the full execution of this policy. A new tenancy law, granting a greater share of the produce of the land to those who till the soil will be recommended; usury will be stamped out; lands will be purchased by the Government and re-sold to tenants; new agricultural areas will be opened to settlement; modern methods of agriculture will be taught, and farm machinery will be made available for purchase. It is my aim to raise the status of the farm worker, to increase his earnings, to spread wide the benefits of modem technology.

Labor must be given the full fruits of its toil. Its right of organization must be protected. The dignity of work, and the worker’s equity in the product of his labor must be assured by the Government. We will endeavor to assure economic security for all our people. But meanwhile terror must be abandoned as an instrument of justice. Lawlessness must stop without a moment’s delay. Our people, starting out on a career of nationhood, cannot permit our national efforts to be influenced by fear. This proud nation will not grant economic concessions at gunpoint. Arms must be surrendered, except by those licensed to bear arms. The Government will undertake to protect each man, woman, and child in the security of his person, of his liberty, and of his property. That protection is an absolute requisite of progress.

We understand the habit of violence which developed in time of war when violence was the creed of freedom. Many of those who now hold arms illegally served well our common cause. We will not forget their services. We are not without sympathy for the centuries-old burdens of injustice visited upon some of our people. We must understand that anger will lurk in the hearts of men when the gains won by violence in war seem about to be taken away. But the rough gains achieved in the absence of law are transitory and insecure. Be assured that the welfare of those who suffered injustice in past years will be heeded. Their war-won gains will be replaced by the more substantial benefits of justice, of peace and tranquility within a framework of national prosperity and economic well-being. But first, arms must be surrendered and the leaders of violence must recognize the leaders duly chosen by the free vote of the people.

I recognize that government, in order to maintain respect for law, must in itself bear the unassailable stamp of integrity. Honesty in government is the first essential for the maintenance by the people of faith in its actions. It is a corollary of this that government must be efficient and must watch with vigilant eye the expenditures of public funds. Public officials must render public service. That is their duty. That is their responsibility. Every centavo of the people’s money must be spent for the people’s benefit. I intend to maintain these standards during my administration.

We have great tasks before us, tasks which challenge the very best and the most that is within us. There is no seed of effort which can be spared from the national planting. Charity and understanding must replace bitterness and anger. We cannot afford to cherish old feuds or old divisions. For the many tasks of national reconstruction, we need the thousand talents of all our people―men and women alike. The recent elections are past. Likewise the strife of war is over. Bitterness engendered by these events must be forgotten and healed. Violations of basic law will be tested and punished by law. Traitors will not escape their just desserts. But among the people, there must be no recriminations or mali2nancies. Errors of mind rather than of heart must be forgiven. The great test of war and sacrifice through which we have passed with such hardship will have failed in one of its few benefits if it has not taught us that only in unity can there be power, that only in singleness of national purpose can there be achieved national salvation. I do not mean to suggest that there is no room in this democracy for division of views or of parties. Vigilant, free and constructive minority organization is a spur to majority leadership and responsibility.

But as we go forward in our full faith to work out the destiny of our land and of our people, we must cling fast to one another, and to our friends across the seas; we must maintain in both our hearts and minds a gentleness of understanding as well as firmness of purpose. Sweat and sacrifice will be needed, but they will fall on barren ground, unless we move in the path of God, “with malice toward none, with charity for all, with firmness in the right as God gives us to see the right.”

I have faith in the wisdom of our people. I have trust in the goodness of God. Let us together maintain our faith in each other, in liberty and in the ways of democracy, and give strength to one another as we advance in our search for the evergreen pastures of peace and well being for all. With the help of God, let us build in this our land a monument to freedom and to justice, a beacon to all mankind.

Sergio Osmeña, SONA 1945

20 Oct

Speech of His Excellency
Sergio Osmeña
President of the Philippines
Message to the Congress of the Philippines

[June 9, 1945]


Today, a moment of great historic significance, the voice of our people, muted throughout the long dreary night of enemy enslavement, is to be heard again in the halls of this Congress, through their duly elected representatives.

It has been a long lapse of time since that day in November, 1941, when you were elected, to this day when you gather in your first session. We can hardly recognize our country after the cataclysm that has engulfed it. The war has left its livid scars everywhere—on our buildings as well as on men’s souls. Probably nothing can more starkly summarize our present plight than the fact that the Executive and Legislative branches of our Government have to meet today in a borrowed house because our Legislative Building is a heap of rubble and ashes, mute witness to the savage desperation of the beaten enemy.

The tragedy that has afflicted our nation has lacerated our hearts. We all miss today many dear and familiar faces that are no more. But perhaps no sorrow has touched us more deeply than the passing of our beloved leader, Manuel L. Quezon. I know, however, that you feel as I do that his immortal spirit abides with us in this hour of trial and crisis, encouraging us to proceed with the arduous tasks that lie ahead. This great man, who dedicated his entire life to his country, died as he would have wanted to die—in line of duty. Soon his mortal remains, kept at the Arlington National Cemetery at Virginia, will be brought back to the Philippines, and we shall all have the opportunity of rendering him our last homage of admiration and affection. We shall erect him a monument so that we and our generations yet unborn may keep his memory enshrined in our hearts.

The Philippines is the one territory under the American flag which has suffered the most at the invader’s hands. Not only are its war casualties the highest in proportion to population, not only have its cities and towns been destroyed and looted, its countrysides and farms laid waste, and its whole economic structure ruined, but its people have undergone more physical pain and mental anguish than in any other part of the United States. As early as December 8, 1941, a few hours after her felon attack on Pearl Harbor, Japan sent bombers and task forces to the Philippines. Unavoidably turned into a battlefield, our country suffered heavily in men and property, especially in Bataan, where the Filipino-American Army battled the Japanese forces for four long months.

Then followed a period of enemy occupation, cruel and humiliating. No sooner had the fighting in Bataan ended than the enemy began the systematic looting of our country. There was no limit to what he could requisition with his worthless money. Even our barest necessities were commandeered. And when we tried to stand by our rights, force, ruthless force, immediately intervened. With or without cause, people by the scores were arrested and sent to prison and concentration camps—some to be tortured, others to be executed. As time went on, we became more impoverished, while the enemy became still more cruel and arrogant. After undergoing three years of enemy domination, no people was a more pitiful sight than the Filipinos—lean, ragged and famished.

I wish to stress the fact that the extreme suffering of the Filipinos and the widespread destruction wrought on our country has been due, in a large measure, to their unwavering loyalty to the United States. No people, I believe, has given so much proof of fidelity to the cause of the mother country as the Filipinos.

When Japan invaded the Philippines, the American flag was here. Even without that flag, Japan would probably have launched her attack. But as long as the Philippines remained under American sovereignty, the responsibility for the defense of the Islands lay with the United States. For forty odd years, in our continuous preparation for self-government, we exercised jurisdiction over matters of education, public works, sanitation and other functions of public administration, but never over our national defense. This function remained in the hands of the United States as the sovereign power. It is true that as soon as the Commonwealth was established, we started giving our citizens military training and building up a modest army, but these steps were in preparation, not for war, but for the fulfillment of our peaceful duties as an independent nation.

Notwithstanding these facts, the Filipino people rallied to the defense of the American flag, paying no heed to the cost and consequences. The sad moment came when it had to be admitted that the battle was lost, since a relief force could not be sent to the Philippines. But far from wavering, the Filipino soldier, side by side with his American comrade, fought on harder than ever until he was overwhelmed by superior numbers.

Unwilling to bow to the enemy, the Filipino people valiantly took up the struggle with all the strength they could muster. Patriotic groups soon sprang up throughout the length and breadth of the Archipelago. At first eluding the enemy, the guerrillas took to the mountains, but with the active support of the civilian population they quickly grew in number and strength to become a virtual challenge to the enemy. The story of the guerrilleros and of the civilian patriots who helped them, is an epic of heroism, loyalty and sacrifice. As far as possible they should be given recognition. Recognized guerrilla units have already been incorporated into the Philippine Army.

As stated in Leyte, in praising the guerrillas we should not be forgetful of the loyal civilians who were left behind and, at the risk of their lives, supported the resistance movement. Included among these civilians were those who, at the beginning of the war, were civil service employees or holders of subordinate positions in the government, and who remained at their posts to protect the people and extend to them all possible aid and comfort. They should, as a general principle, be recalled as soon as their services should be needed; only for strong reasons should they be deprived of their privilege to serve. This policy applies as well to elected provincial and municipal officials who were chosen in the election of 1940, thus giving due consideration to the will of the people as expressed at the polls.

Filipino loyalty to America is an incontestable fact. It is the more remarkable when we consider that right from the start of the war the Filipinos were subjected to a terrific barrage of anti-American propaganda. Claiming invincibility and professing a brotherly spirit toward the Philippines, Japan declared that she had come to our country to free us from the American yoke, and offered us a place of honor in here much vaunted Co-Prosperity Sphere. But we contrasted these soothing words with the factual, liberal and generous record of America. Against the obviously empty promises of Tojo was the solemn pledge of President Roosevelt to the Filipinos that “their freedom would be redeemed and their independence established and protected.” This pledge was later enlarged to include the promise that the Philippines would be “assisted in the full repair of the ravages caused by the war.”

It was in quest of the fulfillment of the promises of President Roosevelt that President Quezon and his Cabinet accepted his invitation to transfer the Commonwealth Government to Washington. In the course of this session, I shall have occasion to report to you the activities of our government in the United States. In this message I propose to discuss only the salient phases of that labor.

When we reached the United States, this country was entirely preoccupied with the problems of her mighty war effort and her attention was concentrated on the European front. She was straining all her means and resources towards the fulfillment of her resolution to crush Nazi Germany first. It was then extremely difficult to divert American attention to the Pacific, but determined to present our cause before the American people, President Quezon held conferences with President Roosevelt and appeared before the Senate and House of Representatives. In spite of the delicate state of his health, he worked ceaselessly during the first year of his stay in Washington, delivering important speeches and repeatedly broadcasting to the Philippines in an effort to maintain the faith of his people. In active support of the President, the members of his Cabinet also made speeches throughout the United States, inviting the attention of the people of America to the loyal stand of the Filipinos and urging prompt efforts for their early redemption.

The United States has kept her pledge. The Philippines is now liberated. This arduous campaign of eight months, beginning at Leyte Gulf, has ended with the current final phase of mopping up in Mindanao and Northern Luzon. Only the mountain corridor of Cagayan Valley, a trap from which there is no escape, remains under Japanese occupation.

Yet, in the flush of victory, we are apt to take for granted the monumental effort which the United States has had to exert to liberate us. Into the Southwest Pacific Area the Japanese General Staff had poured a tremendous amount of troops, planes and ships. Estimates place the Japanese, military forces in the Philippines as comprising an entire army area, two army corps, at least 22 divisions and brigades, and a large number of service troops, totaling at least 450,000 men. Merchant marine, laborers and hastily drafted civilians swelled this locust plague of armed of occupation forces.

Enormous distances had to be traversed, but within the framework of a master plan that took everything into consideration—climate, terrain and an enemy who preferred suicide to capture—operations stretching over 3,000 miles were relentlessly pursued throughout the bitter years of 1942, 1943 and 1944, until the brilliant goal is within inescapable reach in 1945. The main goal of these far-flung operations was the liberation of the Philippines. Enemy losses in the Philippines to date exceed 380,000, a mortal wound inflicted on the Japanese army. With relatively low losses to ourselves, we have before us another example of the brilliant strategy of that genial military leader, General of the Army Douglas MacArthur.

The strategic effect of the liberation of the Philippines has been to set the stage for ultimate Japanese defeat at home and in the south, two areas now severed from each other. Filipinos have done their part in this work by giving lavishly of their men and resources to the United States. But the fight is not yet over, and so I have offered to General MacArthur one division of Filipino troops, under Filipino officers, for the final assault on Japan. Words alone cannot express our gratitude to the United States for all it has done for us, and I take this opportunity to repeat the offer made by President Quezon in 1941 to the people of America—that the men and resources of the Philippines are unconditionally at the service of the United States.

While our Government in Washington did its utmost to present before the American people the political aspect of the struggle in the Philippines, it did not neglect the economic phase, fully aware that the war would produce serious dislocations in the economic life of our country. President Quezon initiated personally the negotiations with the Federal Government to obtain the necessary economic assistance after the war. He did not stop negotiating directly with that Government until, because of his health, he had to retire temporarily from active labor. To proceed with the work already commenced, he created a Post War Planning Board. This Board held sessions continuously and completed its preliminary work. This served as the basis for a program which was finally submitted by the representatives of our Government on the Filipino Rehabilitation Commission presided over by Senator Tydings. I am presenting to you with this message the reports which have been submitted to me by the Filipino group of this Commission. Upon their examination you will find that the program of relief and rehabilitation, as prepared by our representatives in Washington, is very comprehensive. I wish on this occasion to praise the work done by our group. Our men there accomplished a difficult task within very limited means. Now that there is available to me a wealth of human material, it is my purpose to appoint to this Commission new representatives, among whom will be members of this Congress.

When I assumed office as President of the Philippines, I considered it my duty to exert every possible effort to obtain the active personal interest of the President of the United States in our problems. But when I was prepared to confer with President Roosevelt on his return from Quebec last October, I received an urgent request from General MacArthur, to join him and the forces of liberation that were poised to retake the Philippines. Because of this urgent request, I was able to have only a short conference with President Roosevelt, but I promised him that I would return to the United States as soon as possible to continue our conversations.

After the reestablishment of the Commonwealth Government in Leyte, I returned to the United States. President Roosevelt being then out of Washington and, on the other hand, finding myself in urgent need of submitting to a physical examination, I went to Jacksonville, Florida. Everything was in readiness for my hospitalization there when I received another telegram from General Macarthur urging me to join him in Luzon immediately. Reaching Lingayen on the very day I was expected, I rejoined General MacArthur in his headquarters and with him I entered Manila.

Upon resuming my functions in this Capital, I endeavored to convene the Congress, but due to the military situation, it was not possible to do so. I then decided to return to the United States to renew my conferences with President Roosevelt. We met on April 5th and reached an agreement on some of our basic problems. We further agreed to meet again in Washington. Unfortunately, the President died on the 12th.

Shocked by the sad news, I hastened to express to his successor the most profound condolences of the Filipino people. I flew to Washington to attend the funeral services. In the passing of President Roosevelt we, with the entire world, have suffered an irreparable loss. I recommend the erection, by public subscription, of a national library to be named “Franklin D. Roosevelt Memorial Library” as a lasting tribute to him who was a true friend of the Filipinos and a great champion of human rights and liberties.

President Roosevelt had suggested that our next meeting be at the White House on April 19. On that date President Truman received me and we conferred in the presence of the Secretaries of State, War, Navy and the Interior. This was followed by another conference the next week in which President Truman accepted as his own President Roosevelt’s commitments with respect to the Philippines and decided, with my concurrence, to send Senator Tydings of Maryland as his special envoy to the Philippines.

The object, of the Tydings Mission was not to collect data here, since all the necessary statistical and other information were already available to Senator Tydings before he left Washington. The mission desired, firstly, to obtain a personal impression of the situation in which the war had left us, and secondly, to contact personally the officials of the Philippine Government, the Military Command and other interested parties, with a view to coordinating their suggestions and fitting them into the rehabilitation plans already under consideration. Deeply moved by what he saw in Manila, Senator Tydings decided to return immediately to Washington to report to the President of the United States. Indicative of the sympathy, zeal and industry of the Tydings Mission is the four-point program for the rehabilitation of the Philippines which it has publicly announced. I am confident that action on this and other programs will soon be forthcoming.

First and foremost in our minds, as Filipinos, is the question of our political future. In this matter, no greater and nobler message has been given to the Filipino people than that of President Roosevelt when, on August 13, 1943, reiterating his previous promises on independence made on December 28, 1941, he expressed himself in the following words:

“On December 28, 1941, three weeks after the armies of the Japanese launched their attack on Philippine soil, I sent a proclamation to you, the gallant people of the Philippines.

“I said then:

“’I give to the people of the Philippines my solemn pledge that their freedom will be redeemed and their independence established and protected. The entire resources in men and materials of the United States stand behind that pledge.’

“We shall keep this promise just as we have kept every promise which America has made to the Filipino people.”

Soon after, on the initiative of President Quezon, steps were taken to obtain congressional sanction for these pledges. If President Quezon did nothing but this in his political career — and his political record can hardly be surpassed — it alone would entitle him to the eternal gratitude of his people. Senate Joint Resolution No. 93, which President Quezon and I asked for and accepted, is the culmination of our joint congressional efforts. This legislation authorizes the President of the United States to advance the date of independence provided in the Independence Law. It also provides, through the maintenance by the United States of bases in the Philippines, “for full security for the Philippines, for the mutual protection of the Islands and the United States, and for the future maintenance of peace in the Pacific.”

So that the import of this new legislation, and the responsibility which we Filipinos have assumed thereby, may be better understood, it is necessary that we review past events even if we have to walk again on well-trodden paths.

National independence was the goal which our revolutionaries of 1896 and 1898 set for themselves. When the fortunes of war were adverse to our arms and American sovereignty was established in 1898, individual liberties were recognized, among them the right of free assembly. Under the protection of this freedom, two political groups came into existence: the Federalistas, who declared themselves in favor of the annexation of the Philippines to the United States so as to constitute, in due time, a state of the Union; and the Nacionalistas, who advocated the ideal of independence which the Filipino revolutionaries had proclaimed but were not able to achieve in war.

The aspiration to be free, nurtured in an atmosphere of peace, was received with sympathy in the United States. The legitimacy of this aspiration was recognized by Dr. Jacob G. Schurman, President of the first American Commission sent by President McKinley to the Philippines, in these memorable words:

“The watchword of progress, the key to the future of the political development of the archipelago, is neither colonialism nor federalism, but nationalism. The destiny of the Philippine Islands is not to be a State or territory in the United States of America, but a daughter republic of ours—a new birth of liberty on the, other side of the Pacific, which shall animate and energize those lovely islands of the tropical seas, and, rearing its head aloft, stand as a monument of progress and a beacon of hope to all the oppressed and benighted millions of the Asiatic continent.”

On their part the Filipino people, who had elected a majority of Nacionalistas to the first Philippine Assembly, which met in 1907, repeatedly reiterated their confidence in them in successive elections, until the Congress approved in 1934 the Tydings-McDuffie Act creating the present Commonwealth. This law was accepted, first by the Legislature and then directly by the people, thus binding America and the Philippines to a virtual covenant by which the United States formally committed itself to withdraw its sovereignty from the Philippines and proclaim our independence on July 4, 1946. The ten-year transition period was not established to delay the proclamation of independence, but only to prepare the Philippines adequately for the responsibilities of nationhood.

We were well advanced in our preparations for independence when we became the object of an unjust aggression by Japan. But Japan’s military occupation of the Philippines had not affected the independence program agreed upon between the United States and the Philippines. When President Roosevelt invited the President of the Government of the Commonwealth and his Cabinet to evacuate to the United States, he did not do so merely to preserve the constitutional integrity of the Philippine Government but also to assure the realization, in due time, of the program of independence.

With this fundamental idea in mind, the United States took the initiative of considering the Philippines as possessing all of the attributes of complete and respected nationhood. I cannot give you a more authoritative statement concerning the status of our Government in Washington than that which President Roosevelt himself made in his broadcast to the Philippines on August 13, 1943:

“The Philippine Government is a signatory of the Declaration by the United Nations, along with thirty-one other nations. President Quezon and Vice President Osmeña attend the meetings of the Pacific War Council, where the war in the Pacific is charted and planned. Your government has participated fully and equally in the United Nations Conference on Food and Agriculture, and a Philippine representative is a member of the Interim Commission created by that Conference. And, of course, the Philippine Government will have its rightful place in the conference which will follow the defeat of Japan.”

In confirmation of this status we are now participating, among the free and independent nations of the world, in the United Nations Conference on International Organization now taking place in San Francisco.

This war, which has ravaged the world and which is yet to be won in the Pacific, has brought to the Philippines a permanent blessing. I refer to the fundamental change in America’s policy with regard to the outside world, namely, her abandonment of the attitude of isolation and her frank acknowledgment of her duty, as one of the most powerful nations on earth, to preserve for all mankind liberty, justice, peace and security.

In conformity with this new, well-asserted ideology, Congress approved in 1944 Joint Resolutions 93 and 94 which provide, among other things, for the permanent security of the Philippines. America will not only acknowledge our independence as soon as it is possible after the Japanese have been expelled from our soil but will provide, besides, protection for that independence.

When the Philippine Assembly in 1907 formulated the first official petition of the Filipino people that it be granted independence, it did so fully aware of the responsibilities which the new status would impose on us with respect to our security. The Jones Law of 1916 offered us independence as soon as we had organized a stable government, and we accepted it in spite of the fact that such a law did not contain any promise giving us the protection of America after the attainment of our political freedom. In 1934 the Filipino people had occasion in a plebiscite to accept or reject an independence law without adequate American guarantee for its maintenance. The people accepted the offer by an overwhelming majority. With America now offering us protection which assures the permanency of our independence, it would be inconceivable for any Filipino to vacillate.

The program of independence, initially written with the blood of the heroes and martyrs of our history, which took root in the days of the first Philippine Assembly in 1907, which acquired consistency throughout the long period of Filipino-American collaboration resulting in the approval of the Jones Law in 1916 and the establishment of the Commonwealth in 1935, is a program definitely accepted by the Filipino people. Those of us who are temporarily in charge of the affairs of state are mere trustees of the sacred ideal of our people. We have no right to turn back—we shall not turn back—cowed by imaginary dangers or swayed by the desire to lead a life of ease and plenty. We cannot sell our liberty for a mess of pottage.

When Andres Bonifacio and his men uttered their now historic First Cry of Balintawak, they were not held back by fear of the enemy, or by any love of earthly goods. When we took over the banner of liberty from those that fell in the night of our defeat, we asked only for freedom and for nothing more. When we were asked in 1934 if we preferred liberty to prosperity, our people answered overwhelmingly that they desired liberty above everything else. Now that the United States, in recognition of our role in this war, has declared itself our ally and, with liberty, offers us security, it is our duty and our choice to accept.

So I say to every Filipino and to all other elements in our state, that the die is cast. Our course is straight and inflexible. We are going forward to the achievement of our national aspiration.

Gentlemen of the Congress: You are gathered today under the most trying circumstances. There are many serious problems ahead of us. But we who have so long and ardently clamored for self-government must prove to the world that we are equal to the most exacting tasks of public administration. That great and distinguished friend of the Filipino people, General of the Army Douglas MacArthur, once said that they are only fit to live who are not afraid to die. Our people have shown on the battlefield that they are not afraid to die.

But the tasks of peace are at times more exacting than those of war. We are administering the affairs of eighteen million people just delivered from three long years of enslavement. To them we owe justice, order and the means to live in contentment and happiness. I am aware that our means at the moment are inadequate. We are not able to provide our people with as much as they deserve. But we shall not falter in the line of duty.

Let us get together in one mighty effort. Let us set aside selfish considerations and forget petty differences. Only in unity can there be strength. To the experienced, I turn for advice. From the youth of the land, I ask for its enthusiasm and energies. My faith in our people is unbounded. Over the ruins of our cities and barrios we shall build anew. In this most crucial hour of our history, I look forward to our destiny unafraid, confident that, God willing, ours will be a happy, progressive and prosperous land.

In closing, permit me to congratulate you most heartily for being the first elective Congress to meet in a country liberated from the enemy, although the Philippines is among the last to be free from enemy occupation and control.

I wish you all success in discharging the tremendous responsibility that is yours during the present emergency.

Sergio Osmeña, Inaugural Address 1944

19 Oct

Speech of His Excellency
Sergio Osmeña
President of the Philippines
Message to the Cabinet-In Exile

[August 10, 1944, Delivered at Washington D.C.]

Gentlemen of the Cabinet:

Nine days ago, when I performed the painful duty of announcing the passing of our beloved leader, President Manuel L. Quezon, I said in part:

President Quezon’s death is a great loss to the freedom-loving world. No champion of liberty fought for such a noble cause with more determination and against greater odds. His whole life was dedicated to the achievement of his people’s freedom, and it is one of the sad paradoxes of fate that with forces of victory fast approaching the Philippines, he should pass away now and be deprived of seeing the culmination of his labors — the freedom of his people.

President Quezon was a champion of freedom in war and in peace. The plains and hills of Bataan, where the brave Filipino and American soldiers faced with heroism the overwhelming power of the Japanese invader, were also his field of action during the revolutionary days. The city of Washington where his body temporarily rests was the scene of his early appeals and peaceful efforts for Philippine freedom. It was here, almost thirty years ago, where he secured from Congress the promise of independence, which is contained in the preamble of the Jones Law. Here, again, eighteen years later, he succeeded in obtaining the passage of the Tydings-McDuffie Act – a reenactment with some slight amendments of the Hawes-Cutting Law which was rejected previously by the Philippine Legislature. Pursuant to the provisions of the Tydings-McDuffie Law, which was accepted by the Filipino people, we drafted our Constitution and established the present Commonwealth of the Philippines, and elected Manuel L. Quezon as first president.

When the war came and it became necessary to evacuate Manila, President Quezon, frail and sick as he was, moved with his Cabinet to Corregidor where he shared with the soldiers the rigors of the tunnel life and from there braved the hazards of a perilous journey to the Visayas, Mindanao, Australia, and America, in order to continue the fight for the freedom of his people. Here, in Washington, with his War Cabinet, he functioned as the legitimate government of the Filipino people and served as the symbol of their redemption.

It was largely through his untiring efforts that the Philippines was made a member of the United Nations and accorded a seat in the Pacific War Council. It was through his initiative that negotiations were held, resulting in the introduction of Senate Joint Resolutions 93 and 94. By the terms of Senate Joint Resolution 93, the advancement of the date of the independence prior to July 4, 1946, was authorized and the pledge given to the Filipino people by President Roosevelt in 1941 — that Philippine independence will not only be established but also protected — was sanctioned by Congress. His efforts to secure the rehabilitation of the Philippines from the ravages of war resulted in the enactment of Congress of Senate Joint Resolution 94, which provides for the physical and economic rehabilitation of the Philippines. Even before Congress definitely acted on this resolution, he had already created the Postwar Planning Board, entrusting it, together with his Cabinet, with the task of making studies and submitting recommendations looking toward the formulation of a comprehensive rehabilitation program for the Philippines.

In the last few moments before his martyrdom, the great Rizal lamented that he would not be able to see the dawn of freedom break over his beloved country, but he prophesied that his countrymen would see that day. “I have sown the seeds,” he said, “others are left to reap.” Quezon, more fortunate than Rizal, died with the comforting thought that the freedom of the Philippines was already an incontestable reality, awaiting only the certain defeat of the enemy for its full expression.

The immediate duty, then, of those of us who, under the mandate of the Constitution and the laws of the Philippines, are charged with the mission of continuing President Quezon’s work, is to follow the course he has laid, to maintain and strengthen our partnership with America and to march forward with the United Nations with unwavering faith and resolute determination until complete victory is won.

The tide of the war which rose high against us in the early stages of the struggle has turned in our favor. The forces of victory are on the march everywhere-in Europe, in India, and China, and in the Pacific Normandy and Britanny have been occupied by the Anglo-American forces. Poland is half re-conquered by our Great Russian ally. Two-third, of the Italian peninsula are in our hands, while thousands and thousands of planes continue to batter and destroy German communication and production centers, bringing the war to the German home land.

In the Pacific, the progress of the war has been equally impressive. Most of the Japanese strongholds in the Bismarck Archipelago, in New Guinea, in the Gilberts, and in the Marshalls, have fallen. The Japanese bastion of Saipan is in Allied hands; so is Tinian. The reconquest of Guam is almost completed. B-29s, the American super fortresses, are already penetrating the Japanese inner defenses, causing destruction in the enemy’s vital centers of production. General MacArthur’s forces are hammering the enemy’s outposts only 250 miles from the Philippines; while the United States Navy, maintaining mastery in the Central Pacific, is relentlessly attacking Palau, Yap, Ponape, and the Bonin Islands, in its steady advance toward the Philippines, China, and Japan.

The size and strength of the Allied landings in Europe, supported by thousands or planes and using thousands of ships, surpasses the immigration. It is no wonder that before them the most formidable defenses of the enemy are crumbling. I believe that when our D-Day comes the same pattern will be followed, and the mighty Allied forces will join our brave loyal countrymen in an epic victory.

But the forces of freedom will not land in the Philippines with guns and tanks alone. They will also bring with them food, medical supplies, and clothing which are so much needed by our suffering people. Thirty million pesos has already been set aside for the requisition of these supplies which will be sent to the front as soon as possible for distribution to our civilian population. As the war progresses and as more troops are landed in the Philippines, increasing quantities of these supplies will be made available. Philippine relief will be prompt and adequate.

As Philippine territory is wrested from the enemy, civil government will promptly follow military occupation so that the orderly processes of self-government may be established under the Constitution. Red Cross units, both Filipino and American, will follow the armies of freedom to help alleviate the suffering of the people. Hospitals, health and puericulture centers will be reestablished. All schools in operation before the war will be reopened in order to resume an education of patriotism, democracy, and humanitarianism.

The veterans of our wars for independence, and all those who supported our struggle for freedom, will receive for their labors and sacrifices the full recognition expected of a grateful nation. War widows and orphans will be provided for. Ample compensation will be made for the destruction of public and private properties. Roads and bridges destroyed by the enemy will be rebuilt. Disrupted communications by land, sea, and air, will be repaired and improved. Towns and cities, which either were destroyed or suffered damages because of the war will be reconstructed under a systematic and scientific town planning program. In this program, the towns of Bataan and Zambales will receive preferential attention. Bataan, the historic battleground where our brave soldiers, Americans and Filipinos, faced the enemy until death, will be made a national shrine.

In providing for the reconstruction of our industries and the rehabilitation of our agriculture, immediate attention will be given to factory workers and farm hands throughout the Philippines, and full and generous assistance will be given to the small farmers who, because of the war, have lost their nipa huts, their work animals, and farm implements.

We are making preparations to meet the manifold problems arising from the closing and insolvency of our banks, insurance and credit institutions, the adulteration of our currency with unsound enemy issues, the impairment of the basis of taxation, and the initial difficulty of tax collection. Moreover, we are formulating a long-range economic program with a view to securing that sound economic foundation which will give our independence stability and permanence.

In the gigantic task of rehabilitation and reconstruction, we are assured of America’s full assistance and support. The joint Filipino-American Rehabilitation Commission is under the chairmanship of a staunch friend of the Filipino people, Senator Tydings of Maryland. To it is entrusted the task of studying and recommending to the United States and Philippine governments measures calculated to secure the complete physical and economic rehabilitation of the Philippines and the reestablishment as soon as possible of such commercial relations between the two countries, and will assure us a reasonable level of public and private property.

In the preparation and execution of the Filipino rehabilitation program, America’s support and assistance are essential. But there are responsibilities which we as people must undertake ourselves, and which can be assumed only if we are faithful to our ideals, principles, and commitments.

We are a Christian people and the faith that we imbibed sprang from our contacts with nations of Occidental civilization. We embraced Christianity a century before the Pilgrim Fathers landed at Plymouth. For more than four hundred years we have kept that faith. We cannot now turn back and be a pagan people.

For centuries, we have been a law-abiding people. We believe in and practice democracy. That is the reason why Section III, Article II of our Constitution provides that we renounce war as an instrument of national policy and adopt the generally accepted principles of international law as part of the law of the nation. It is repugnant to our Christian traditions and democratic ideals to be the satellite of a conquering power or to be allied with the masters of brute force, whether in Asia, Europe, or elsewhere.

The mutual relationship between the American and Filipino peoples for half a century has revealed to the Filipinos the high ideals of the American nation and the good faith that has always animated the United States in its dealings with us. Out of this association have arisen mutual understanding and continuous cooperation between the two countries, resulting in great national progress for the Philippine progress that is without parallel in history. In the epic of Bataan, where the American and Filipino soldiers fought together, the enduring friendship of our two peoples was sealed.

In this war between a free world and a slave world, the Philippines has freely and voluntarily taken side with the defenders of liberty and democracy. In the same manner as the enemy is resorting to every means to attain his evil ends, the United Nations are exerting their utmost to achieve complete victory. Pledged in this war to the finish, we will continue doing our best to help the war effort. Every commitment made by us in this respect will be fulfilled.

The Filipino people, with their wisdom in peace and gallantry in war, have established their right to take place in the family of nations as a full and sovereign member. We cannot renounce this right nor its obligations and responsibilities. We shall, as a free and self-respecting nation, fulfill our duties not only to ourselves but also to the entire freedom-loving world by participating in the establishment and preservation of a just peace for the benefit of mankind.

Our path of duty is clear. It is the path of national honor, dignity, and responsibility. It was laid out for us by the great heroes of our race — Rizal, Bonifacio, and Quezon. We shall move forward steadily to reach our goal, maintaining our faith in the United States and fully cooperating with her.

In the fulfillment of my duties as President of the Philippines, I ask in all humility and in all earnestness the cooperation of all my countrymen in the United States, Hawaii, in the homeland and elsewhere in the world. With their full and unstinted cooperation and support, and God helping me, I shall not fail.

Manuel L. Quezon, 2nd Inaugural Address, 1941

19 Oct

Speech of His Excellency
Manuel L. Quezon
President of the Philippines
2nd Inaugural Address

[December 30, 1941, Corregidor]

On November 15, 1935, I took my oath of office as first President of the Philippines under the most favorable auspices. The Philippines was at peace and the Filipino people were happy and contented. At the inaugural ceremonies held in the city of Manila, there were present high dignitaries of the Government of the United States, and a vast multitude of Filipinos deeply grateful to America and thrilled with the vision of a bright future.

Today I am assuming for the second time the duties of the Presidency under entirely different conditions. We are in the grip of war, and the seat of the government has been temporarily transferred from the city of Manila to a place in close proximity to the headquarters of our armed forces, where I am in constant touch with Gen. Douglas MacArthur. All around us enemy bombs are dropping and anti-aircraft guns are roaring. In defenseless cities and towns air raids are killing women and children and destroying century-old churches, monasteries, and schools.

Six years ago, there was every reason to believe that the Filipino people would be able to prepare themselves for independence in peace and without hindrance. In my first inaugural address, I outlined a program intended to lay the foundations for a government that will, in the language of our Constitution, promote the general welfare and secure to the Filipino people and their posterity “the blessings of independence under a regime of justice, liberty, and democracy”.

Our task of nation-building was in progress when suddenly, on December 8, 1941, the Philippines became the victim of wanton aggression. We are resisting this aggression with everything that we have.

Our soldiers, American and Filipino, under the leadership of General Douglas MacArthur, one of the greatest soldiers of our time, are fighting on all fronts with gallantry and heroism that will go down in history. In the face of frequent air raids which are causing so much death, suffering, and destruction, our civilian population are maintaining their morale. Despite the enemy’s temporary superiority in the air and on land and sea, we have been able to check the rapid advance of the invading armies. America and the Philippines may well be proud of the heroic struggle that our forces are putting up against the invader.

At the present time we have but one task — to fight with America for America and the Philippines. To this task we shall devote all our resources in men and materials. Ours is a great cause. We are fighting for human liberty and justice, for those principles of individual freedom which we all cherish and without which life would not be worth living. Indeed, we are fighting for our own independence. It is to maintain this independence, these liberties and these freedoms, to banish fear and want among all peoples, and to establish a reign of justice for all the world, that we are sacrificing our lives and all that we possess. The war may be longdrawn and hard-fought, but with the determination of freedom-loving peoples everywhere to stamp out the rule of violence and terrorism from the face of the earth, I am absolutely convinced that final and complete victory will be ours.

Soon after the outbreak of the war, I received a message from President Roosevelt expressing admiration for the gallantry of our soldiers and the courageous stand of our civilian population. Yesterday, the President of the United States issued a proclamation which, I am sure, will hearten our fighting men and thrill the soul of every American and Filipino in this land. This is the proclamation:

“News of your gallant struggle against the japanese aggressors has elicited the profound admiration of every American. As President of the United States, I know that I speak for all our people on this solemn occasion. The resources of the United States, of the British Empire, of the Netherlands East Indies, and the Chinese Republic have been dedicated by their people to the utter and complete defeat of the Japanese War Lords. In this struggle of the Pacific the loyal Americans of the Philippine Islands are called upon to play a crucial role. They have played, and they are playing tonight, their part with the greatest gallantry, As President, I wish to express to them my feeling of sincere admiration for the fight they are now making. The people of the United States will never forget what the people of the Philippine Islands are doing these days and will do in the days to come. I give to the people of the Philippines my solemn pledge that their freedom will be redeemed and their independence independence established and protected. The entire resources in men and materials of the United States stand behind that pledge. It is not for me or for the people of this country to tell you where your duty lies. We are engaged in a great and common cause. I count on every Philippine man, woman, and child to do his duty. We will do ours. I give you this message from the Navy:

“The Navy Department tonight announces the Japanese Government is circulating rumors for the obvious purpose of persuading the United States to disclose the location and intentions of the American Pacific Fleets. It is obvious that these rumors are intended for, and directed at, the Philippine Islands. The Philippines may rest assured that while the United States Navy will not be tricked into disclosing vital information, the fleet is not idle. The United States Navy is following an intensive and well planned campaign against Japanese forces which will result in positive assistance to the defense of the Philippine Islands.”

 My heart, and I know the hearts of all Americans and Filipinos in this country, are filled with gratitude for the reassuring words of the President of the United States. My answer, our answer, to him is that every man, woman, and child in the Philippines will do his duty. No matter what sufferings and sacrifices this war may impose upon us we shall stand by America with undaunted spirit, for we know that upon the outcome of this war depend the’ happiness, liberty, and security not only of this generation but of the generations yet unborn.

Mr. High Commissioner, may I ask you to convey to the President of the United States our profound gratitude for the noble sentiments expressed in his proclamation. The Filipino people are particularly grateful for his abiding interest in our welfare and for his pledge to assure and protect our freedom and independence.

General MacArthur, there are no words in my language that can express to you the deep gratitude of the Filipino people and my own for your devotion to our cause, the defense of our country, and the safety of our population. I trust that the time will come when we may express this sentiment to you in a more appropriate manner.

To all Americans in the Philippines, soldiers and civilians alike, I want to say that our common ordeal has fused our hearts in a single purpose and an everlasting affection.

My fellow countrymen, this is the most momentous period of our history. As we face the grim realities of war, let us rededicate ourselves to the great principles of freedom and democracy for which our forefathers fought and died. The present war is being fought for these same principles. It demands from us courage, determination, and unity of action, In taking my oath of office, I make the pledge for myself, my government, and my people, to stand by America and fight with her until victory is won. I am resolved, whatever the consequences to myself, faithfully to fulfill this pledge. I humbly invoke the help of Almighty God that I may have the wisdom and fortitude to carry out this solemn obligation.

Manuel L. Quezon, 6th SONA, 1941

19 Oct

6th State of the Nation Address of His Excellency
Manuel L. Quezon
President of the Philippines
to the 2nd National Assembly
On The State of the Nation

[January 31, 1941, Delivered at the Opening of the 3rd Session in the Assembly Hall, Legislative Building, Manila]


This session of the Second National Assembly is of unusual significance. It is not only held at a time when momentous events are vitally affecting the destiny of nations, but it marks the culmination of a legislative epoch which commenced with the inauguration of the Commonwealth. During these five years constructive measures were passed by the National Assembly which have enabled the new government to function smoothly and to render invaluable service to the country. But more has been done. You have initiated amendments to our Constitution designed to strengthen the foundation of our democratic institutions and to insure their stability and permanence. And because of such a splendid record the members of the National Assembly have merited the lasting gratitude of our people.

As this body is about to pass into history by reason of the recent amendments to the Constitution creating a new bicameral legislature to be known as the Congress of the Philippines, I desire to express my deep gratification at the manner in which the members of this Assembly have dealt with the many important public questions requiring their attention. I take particular pleasure in acknowledging the valuable cooperation which you have accorded me in the administration of the affairs of the Commonwealth. Fortunately, we are still free from the armed conflicts now raging in several parts of the world, and let us hope that we may be spared the destructive effects of such conflicts. But our fate in this respect is linked with that of the United States. We are placed in that position not only by the very nature of our political relationship with that great nation, but by our common faith in democracy and by every noble impulse that animates our people.

In these times of stress, our national security is naturally the greatest concern of our government, and we are doing all we can in this respect. But it must be admitted that with our own resources alone we are not now in a position to defend ourselves.

The Government of the United States has embarked upon a program of national defense which, we earnestly hope, includes the Philippines; for, under the terms of the Tydings-McDuffie Act, the defense of our country remains primarily the responsibility of the United States. This is as it should be, because so long as we are under the American flag it rests exclusively with the United States, and not with us, to determine whether we shall be at peace or at war. The Filipino people, desirous of cooperating with the United States in the execution of this defense program, are ready to bear their full share of that responsibility. To this end, I have assured the Government of the United States, in behalf of the Commonwealth, that the entire Philippines—its man power and material resources— are at the disposal of the United States in the present I emergency.

In my eagerness to expedite the organization of our national defense in cooperation with the United States and in the absence of available funds in the public treasury for that purpose, I have made representations to the Washington authorities requesting that the funds, declared by the Congress of the United States to be payable to the Philippine Commonwealth from the sugar excise tax collections and from profits derived from the devaluation of the American dollar, be appropriated to be spent exclusively for our national defense under the direction of the United States. I have assurances that this matter is being given serious consideration.

As you already know, the people of the United States have reelected President Franklin Delano Roosevelt for another term of four years. This outcome of the presidential election has brought joy to the people of the Philippines because the Filipino people are confident that the United States will pursue a policy which will insure for that country and for ours the continued enjoyment of peace under a regime of liberty and democracy. I wish, on this solemn occasion, to reiterate our loyalty to America and our unswerving faith in the leadership of her great President.

The constitutional amendments initiated by this body and ratified by our people, which have for their object the broadening of the democratic base of our government, have received the unqualified approval of the President of the United States. The sympathetic consideration given to these amendments by President Roosevelt could not but arouse a deep feeling of gratitude on the part of our people. By the same token, our faith in, and loyalty to, the United States have been strengthened even more.

The approval of the amendments constitutes another recognition of the principle that, in matters purely domestic, the will of our people should prevail. This principle, which we have always maintained, had been gradually accepted by the Government of the United States and fully embodied in the Tydings-McDuffie Act. It is now the basic foundation upon which American-Philippine relations rest.

I want to take advantage of this opportunity to congratulate your distinguished Speaker upon the successful outcome of his recent mission to the United States. Speaker Yulo has completely justified the confidence of our people in his patriotism and in his ability to perform this most important and delicate task. The unusually warm reception accorded him upon his return shows that the country fully appreciates the value of the work done by him.

Since the establishment of the Commonwealth Government, we have pursued a definite program designed to prepare our country for independence. This program was well under way at the outbreak of hostilities in Europe.

We completed the organization of the Commonwealth Government as contemplated by the Constitution. The new government has been functioning satisfactorily, and `its varied activities have been extended in order better to serve the needs of the people.

We have adopted a plan of national defense for an independent Philippines. This plan is being carried out. Preparatory military training has been introduced in all elementary and high schools. In colleges and universities, instruction in military science for the training of reserve officers has been made compulsory. We have today a regular force consisting of 466 officers and 3,666 enlisted men excluding the Constabulary. This force has been organized to undertake the training of the annual levies of trainees and to engage in the study and planning of the most effective employment of our trained man-power in an emergency. Our total reserve force numbers 132,000 men organized into approximately 13 tactical divisions. The army and other national defense activities have been placed under the Department of National Defense, which was organized last year.

Steps have been taken for the promotion and encouragement of civil aviation and the safety of air navigation. The Government has either acquired or constructed airports and landing fields. We have also established a network of aeronautical radio and weather observation stations which has greatly facilitated air travel in this country.

The judicial branch of our government has undergone important changes designed to insure an efficient and speedy administration of justice.

The creation and organization of the Court of Appeals in 1936 relieved the Supreme Court of the task of attending to a large number of appealed cases, thus enabling it to devote more time to the consideration of cases involving important questions of law.

As a result of the work of the Court of Appeals, the determination of appealed cases has been greatly expedited. The dockets of both the Supreme Court and the Court of Appeals are up-to-date.

In the exercise of its rule-making power and with a view to simplifying court procedure and reducing the cost of litigation, the Supreme Court has adopted new rules for all the courts in the Philippines.

In order to meet the increasing amount of court litigation brought about by the ever—expanding field of the law, the complexity of modern life, and the natural growth of population, the number of judges of first instance and of justices of the peace has been increased.

Our courts have been placed within the reach of the humblest citizen through the establishment of free legal aid services.

The masses of our population are more and more becoming aware that our courts are administering justice to the rich and the poor alike.

There has been a long-felt need of revising and codifying our substantive laws in order to make them conform to the customs, traditions and idiosyncrasies of our people and to adapt them to present day conditions. A Code Committee has been appointed to carry out that important task.

In order to improve the administration of our criminal laws, the provincial fiscal service has been reorganized and the Office of District Attorneys has been created for each of the nine judicial districts, excepting the city of Manila.

With a view to a better coordination of crime-investigation and prosecution, a Division of Investigation was created under the Department of Justice by Commonwealth Act No. 181. This Division is patterned after the Federal Bureau of Investigation of the United States Department of Justice. Its main duties are to help in the detection and prosecution of crimes and to acquire, collect, classify and preserve criminal identification records.

We have made reforms in our penal administration, the most significant of which have been the introduction of vocational training for our prisoners and the individualization of corrective treatment. A new insular penitentiary has been opened in Muntinglupa, Rizal, and this has afforded the insular prisoners greater opportunity for self-improvement.

The Public Service Commission has been instrumental in maintaining fair and reasonable rates for light, gas, and transportation services in Manila and in the provinces.

In order to regulate the issuance of, and trading in, securities, made necessary by the mining boom of 1935 and 1936, we created the Securities and Exchange Commission. Through its operation, investors are afforded protection in speculative ventures and against fraudulent schemes.

To reduce the evils resulting from the establishment and operation of certain kinds of amusement centers, I have promulgated rules and regulations in accordance with Commonwealth Act No. 601.

Social justice has been a major aim of our government during the last five years. To accomplish this objective, we have, among other things, set a minimum wage scale in public works, created the Court of Industrial Relations to settle labor-capital disputes, organized the National Land Settlement Administration to help the poorer classes transfer from congested districts to unoccupied areas, purchased haciendas to be subdivided and resold to the tenants, embarked on housing schemes for workers and low-salaried employees, intensified the campaign against usury, revised the system of taxation so that the tax burden would be borne by those best able to carry it, passed legislations to protect the rights of tenants, appointed officials to defend the poor, encouraged the organization of associations for marketing and purchasing among producers and consumers, and extended aid and credit to small farmers and businessmen.

Noteworthy progress has been made in the opening of settlement projects under the National Land Settlement Administration. Organized less than two years ago, the National Land Settlement Administration has established the Koronadal Valley Project in Cotabato, where some 14,000 people have settled, and has recently started the Mallig Plains Project in Isabela, covering 66,000 hectares of the Cagayan Valley.

To date, the National Land Settlement Administration has spent about P1,500,000 of the P20,000,000 capital authorized by Commonwealth Act No. 441 from the coconut oil excise tax funds. Of the amount disbursed, about half a million pesos has been given to the settlers as loans. The National Land Settlement Administration expects, within five years, to develop four or five other settlement projects along the broad lines of Koronadal, and to distribute land to about a hundred thousand settlers.

The Rural Progress Administration has been established to assist the landless in acquiring lands and homes of their own. It has already purchased several estates and homesites, among which are: the Bahay Pari Estate in Pampanga, the Marikina Homesite in Rizal, the Tunasan Homesite in Laguna, and the Dinalupihan Homesite in Bataan.

In addition to these haciendas and homesites, the Government has leased the Buenavista Estate in Bulacan. It is a matter of satisfaction to note that whereas before misapprehension and distrust prevailed among the tenants in that Estate, now there is harmony and better understanding. There is evident willingness on the part of these people to pay their rents and to cooperate with the Government in its efforts to ameliorate conditions. As the Estate progresses, it approaches the status of an independent cooperative farm.

To provide suitable homes for our working population, we have organized the People’s Homesite Corporation, with an initial capital of P2,000,000, which has taken over Diliman District bordering Manila in order to convert it into a model workers’ community. Hundreds of model houses for laborers and low-salaried employees have been constructed.

The eagerness with which the people have responded to the opportunity of acquiring their own houses has been very gratifying, and the People’s Homesite Corporation has plans for the construction of more houses.

Besides cash loans, the Government has extended loans in the form of rice to needy tenant farmers. This work of extending credit facilities to tenants and small farmers has been placed under the administration of the Philippine National Bank, and the amount of P1,000,000 has been released for this purpose from the emergency funds.

The organized efforts of the Government to give public assistance to victims of public disasters were exerted as early as 1934 with the creation of the Board of Relief under the provisions of Act No. 4160. To further promote the security of the masses, this Board was reorganized on August 19, 1940, with the creation of the National Social Security Administration. To this new agency have been entrusted wider functions so that, in addition to giving relief to victims of public disasters, it is rendering assistance to the unemployed and studying the whole problem of unemployment in the Philippines.

Since public works projects offer at present the most practicable means of aiding the unemployed, I have issued Executive Order No. 307 requiring that the only criterion for obtaining work in these projects shall be the need of employment and fitness for it and that no regard shall be paid whatsoever to political affiliation or religious creed.

From January 1, 1934, to June 20, 1940, a total of P3,591,008.81 was spent for relief in the forms of food, clothing, medicines, building materials, and seedlings.

The Philippine Rice Share Tenancy Act, enacted in 1933, was not put in operation until 1936, with such amendments as were necessary to hasten the solution of the tenancy conflicts arising out of the division of crops. As a result of the vigilant enforcement of this law, tenancy conflicts have been reduced, and there is growing disposition among landlords and tenants to settle their differences amicably.

Disputes between capital and labor have arisen now and then, but such disputes have been fortunately free from the sharp violence and bitter antagonisms that generally characterize such clashes in other places. We have helped labor fight for its rights and we have protected these rights against unjust encroachment. This has resulted in mutual respect and understanding between capital and labor, and has contributed to the promotion of social welfare.

The Court of Industrial Relations has been a potent factor in maintaining industrial peace. Its accomplishments are to a large extent identified with the substantial gains of labor, including the fixing of the scale of wages at fairer levels, the reduction of working hours, the recognition of the right of collective bargaining, and the payment for overtime work. These gains have been reflected in improved working and housing conditions, in better sanitary facilities, in better terms of employment, and, in general, in the material, physical and moral well-being of the working classes.

The functioning of the industrial court has shown that the interests of labor and capital are compatible with one another and that- conflicts between them can be adjusted without the necessity of resorting to strikes, lockouts, or other coercive measures.

Peace and order has been maintained. No disturbance of a serious nature has arisen to require drastic action by the authorities. Where municipal police forces proved inadequate to cope with a threatened situation, the constabulary has always been ready to maintain peace and order.

For the first time a general election for local officials was held last December under the direction and Supervision of the Commission on Elections. The efficient and orderly manner in which the election was conducted proved the wisdom of creating such an independent commission.

With the abolition of the Bureau of Non-Christian Tribes in 1936, the Office of the Commissioner for Mindanao and Sulu was created to assist the Secretary of the Interior in the development work in Mindanao, and to look after the interests of the special provinces. In the five specially organized provinces, we have, whenever possible, followed the policy of placing natives in responsible executive positions. Townsites have been established, and sites for agricultural colonies properly located. The construction of roads, waterworks, port works, and other public improvements has been extensively undertaken in Mindanao.

The benefits of sanitation have been extended to all parts of the country. Because of rigid sanitary and quarantine measures, the Philippines has been spared from the ravages of dreaded epidemic diseases, such as cholera, plague, and smallpox, which have been afflicting neighboring countries.

Medical aid has been increased, specially for the poor. Hospital, dispensary and other medical facilities have been substantially increased. Twelve new hospitals and 939 public dispensaries have been organized; and 500 charity clinic physicians and 95 charity clinic dentists have been employed to render free medical and dental services.

Greater stress has been given to safeguarding the health of infants and mothers. While in 1935 we had only 196, we now have 319 puericulture centers.

Measures for the protection of the health of industrial workers have also been adopted and enforced. The campaign against common diseases has been intensified. To reduce tuberculosis incidence, we have established the Quezon Institute. Malaria and other major diseases have also received attention. Seven malaria control units are today in operation.

Besides the leprosarium at Culion, funds have been provided for the establishment and operation of other leprosaria in different parts of the country. Of the new regional leprosaria, the largest, the Central Luzon Leprosarium, has already been opened.

A public health laboratory with modern facilities has been organized. An Institute of Hygiene has been established. The system of medical instruction in the University of the Philippines has been improved and funds for the establishment of postgraduate courses have been made available. The Philippine General Hospital has been reorganized and enlarged with the addition of several wards, including a unit for the treatment and study of cancer, for which a building is now being constructed.

A separate Department of Health and Welfare has been organized with a view to effecting a better coordination of public health and sanitation, welfare, and related services.

In the last six years, the Philippine. Charity Sweepstakes has distributed a total of P7,611,230.43 to charitable health and civic institutions and organizations such as the Philippine Tuberculosis Society, the Associated Charities, national and provincial hospitals, puericulture centers, charity clinics, the Philippine Amateur Athletic Federation, the National Federation of Women’s Clubs, the Boy and Girls Scout organizations—and for the maintenance of such activities as malaria control work and the repatriation of Filipinos from the war zones in China and Europe. Besides, it has distributed P939,102.42 to cities and provinces.

In our public schools now numbering 12,000, we have admitted about 800,000 additional pupils, so that today more than 2,000,000 pupils are in attendance. To insure proper support and a more rapid extension of elementary education, the National Government has assumed responsibility for the maintenance and operation of elementary schools. This reform has made possible a more efficient coordination of school finances and the full utilization of the services of teachers, and has offered increased opportunity for elementary education throughout the country.

The curricula have been revised. Character education and citizenship training have been stressed and special efforts made to develop a greater appreciation of Philippine culture. Attention was also focused on vocational education by establishing new vocational schools and by giving vocational courses in academic high schools. Considerable progress in athletics has been made as shown by a general improvement in the physique of our youth.

The needs and problems of the University of the Philippines have been surveyed by a committee of the Board of Regents with the advice of two outstanding educators from the United States. The recommendations of the committee are being considered, and some have been put into effect. The reorganization of the .University of the Philippines has been largely carried out. Commonwealth Act No. 442 was enacted directing the transfer of the University of the Philippines to a site outside of the City of Manila. Three buildings are nearing completion and the work on the plans for all the necessary buildings is proceeding as rapidly as circumstances permit.

With the extension in 1936 of government super- vision over all private educational institutions issuing diplomas or conferring degrees, as provided in Commonwealth Act No. 180, the quality of’ instruction in private schools has shown general improvement. The Government has encouraged private initiative in education, but at the same time, it has adopted the necessary safeguards to protect the public interest, and to carry out the educational aims enunciated in the Constitution. Through closer supervision by the Office of Private Education, the number of competent instructors has grown, school libraries have been expanded and laboratory equipment and facilities improved. The various government boards of examiners act as technical advisory committees to the Office of Private Education and cooperate with the various institutions to coordinate government licensing examinations with teaching.

We organized the Institute of National Language to evolve a common language for our people adopting Tagalog as the basis. The Institute has completed a grammar and is now preparing a dictionary. We are gradually introducing the teaching of the national language in the public and private schools.

We have established a system of adult education. During the past four years 6,069 adult schools have been opened with more than 50,000 volunteer citizens helping in the eradication of illiteracy and the teaching of citizenship and the stimulation of vocational competence. Up to December 31, 1940, these schools had an enrolment of 581,307 adults, men and women. Over 2,500,000 copies of publications on adult education have been distributed.

To supplement instruction in the schools, the facilities of public and school libraries have been expanded. The National Library has established branches in different provinces and its facilities have been made available to an increasing number of people. Its Filipiniana collection has been enriched. Recently we acquired the Blumentritt collection on the life and writings of Rizal. Letters of Rizal have been collected and published.

Roads with a combined length of 6,979 kilometers were built which increased the total length of roads to 22,959 kilometers. Particular attention was directed to the opening of new roads and highways in Mindanao to accelerate the economic development and settlement of that region. The important parts of the island are now linked by a network of roads with a total length of 3,878 kilometers, of which 1,811 kilometers were constructed during the Commonwealth period.

The construction of concrete pavements on national roads has been undertaken. We have today 362 kilometers of cement roads. Supplementing our road-building program, the sum of over P7,500,000 was spent for the construction of bridges. We have now 33 new bridges in process of construction costing more than P4,662,000.

Another important phase of our public works program was the construction of 2,362 buildings costing about P11,000,000.

During the last five years there were constructed in the provinces a total of 134 waterworks systems and 492 artesian wells at a total cost of P5,300,000. These water systems and artesian wells are serving some 876,292 people with potable water.

Projects for flood and river control costing P14,586,413 have been carried out in various provinces.

For the maintenance and improvement of our ports and the construction and expansion of port facilities, we have spent about P19,500,000. These improvements have gone far in promoting foreign and inter-island trade.

Impetus has been given to coastwise navigation which constitutes the principal means of communication between the different parts of the archipelago. Nine new steamers, 19 motor ships, and more than 1,000 sailing vessels and motor launches were put in operation. Most of these steamers and motor ships were built specially for tropical use and are provided with comfortable accommodations for all classes of passengers.

The Government has given special attention to the entry of Philippine shipping firms in the ocean-going trade. It has extended credit and other facilities to several Philippine firms which enabled them to acquire ten steamers and motor vessels with a total gross tonnage of 57,236. One of these companies also chartered twelve foreign vessels which, under Filipino management and control, carry a considerable portion of our overseas trade.

With the completion of the Tayabas-Legaspi section of its main Southern Line, the Manila Railroad Company has been enabled to maintain through train operation between Manila and Albay.

To avoid unnecessary duplication of services, the company has entered into joint passenger traffic arrangements with private bus companies so that today practically all important points of Luzon can be reached by the combined train and bus lines. Wherever necessary, the company maintains its own feeder bus service. In order to foster tourist trade and to accommodate its patrons and other travellers, the company has adopted plans for the establishment of a chain of hotels throughout the country. Two new hotels are now in operation: one in Tagaytay City and another in Legaspi, Albay.

The construction of radio stations at strategic and important points has received considerable attention. Eighteen stations have been erected at Ilagan, Isabela; Larap, Camarines Norte; Port Holland and Punta Flecha, Zamboanga; Brooke Point and Binalauan, Taytay, in the province of Palawan, and other places.

No efforts have been spared to protect and promote agriculture and commerce.

We have eliminated locust infestation and reduced destruction by other pests. The introduction of dangerous plant diseases into the country has been checked through a rigid plant quarantine service.

Control of animal diseases through quarantine and vaccination has, likewise, been effected. Since 1938 no case of rinderpest has been registered.

Fishing laws and regulations are more strictly enforced. Various fishery stations have been opened and adequate facilities have been provided, as well as personnel to study the propagation of needed fish varieties.

The survey and subdivision of public lands has been expedited to have lots ready for settlers and to insure the equitable distribution of public lands by preventing the acquisition of big landholdings.

Through an extensive soil and agronomical survey now being undertaken, we shall soon be in a position to determine the physical, chemical and biological properties of our agricultural areas and thus secure the data essential to scientific agricultural planning and land cultivation.

The production of gold and silver has been more than doubled and that of base metals has risen from almost nothing to about one—tenth of the total mineral production in 1940.

To insure a continuous supply of timber and help solve the problems of soil protection, water conservation and flood control, new forest reserves, communal forests and national parks have been established and barren watersheds reforested with economically valuable trees.

The Bureau of Science has successfully undertaken experiments on the utilization of the by-products of some of our industries. As a result of these researches, factories for the manufacture of paints, varnishes, roofing tiles and other industrial products from local raw materials have been established.

The National Research Council has stimulated comprehensive projects of scientific research. As an advisory body, the Council has drawn the attention of both the Government and private enterprises to important activities requiring technical knowledge. It has catalogued our scientific and technical resources for use in any intensive scientific work.

Our farmers have received assistance in the marketing of their products. Through the help of the National Produce Exchange, many producers in the different provinces, mostly small individual farmers and cooperative associations, have been able to dispose of their products without passing through middle-men, thus giving them better returns for their crops.

Activities for the promotion of foreign and domestic trade have been intensified. A new Foreign Trade Division in the Bureau of Commerce has been organized to develop foreign markets and promote the sale of Philippine products abroad. Since 1939 National Foreign Trade Week has been observed annually in order to arouse wider public interest both here and in the United States in Philippine-American trade. A direct cablegraphic price quotation service from New York has made possible the daily publication and broadcasting of price quotations on all important staple products of the Philippines. The Bureau of Commerce has also helped our businessmen in establishing new business connections locally and with foreign countries and in getting useful information.

Filipino participation in the retail trade of the country has increased from between 15 to 20 per cent at the time of the inauguration of the Commonwealth to approximately 37 per cent in 1939. Filipinos now outnumber the merchants of other nationalities in the local retail trade and control a greater number of retail stores.

In its desire to broaden the base of taxation and shift the tax load to those best able to pay, the Government has approved a series of measures, now embodied in the National Internal Revenue Code, to create new sources of income by increasing taxes on inheritance, income, and articles of luxury, and by imposing taxes on amusement and other activities. The code has established a more equitable tax system and provided a more adequate machinery against tax evasion or avoidance. Its adoption has resulted in a substantial increase in revenues, which, however, has been upset by present depressed business conditions. The loss of revenues occasioned by the abolition in 1937 of the cedula tax was more than offset by the new taxes.

The trend in public revenues during the last five years is shown by the following figures. The internal revenue collections rose from P46,971,774.93 in 1935 to P73,354,896.60 in 1937, the year of the mining boom; collections fell to P66,301,810.61 in 1938, but rose again to P69,331,641.20 in 1939, and, despite the beginning of hostilities in Europe, reached a peak of P74,858,920.31 for the fiscal year 1940, when the Internal Revenue Code went into effect. Customs collections showed a similar trend. Collections rose from P24,477,176.63 in 1935 to P32,125,389.93 in 1937, then declined to P28529,012.11 in 1938 and to P25,582,985.21 in 1939. Unlike internal revenue collections, however, which rose to a new high in 1940, customs collections for that fiscal year—which amounted only to P27,270,275.90, because of the paralyzation of our trade with some of the warring nations—fell below the 1937 level.

Provincial and municipal finances have been in sound condition. At the end of the fiscal year 1940, provincial governments had an unexpended surplus of P3,127,204.09 and the municipal governments, P1,104,524.04. Various laws such as the new municipal autonomy act, the new assessment law, and the Internal Revenue Code have further strengthened the financial position of the provinces and municipalities and enabled them to meet their obligations more adequately. The change in the supervision over the finances of our local governments, placing provincial, municipal and city treasurers and provincial and city assessors under the Department of Finance, has resulted in a unified collection service and greater efficiency.

In addition to the resources of the Philippine National Bank, we have made available to the public with the creation of the Agricultural and Industrial Bank P25,000,000 which constitutes its initial capital.

A direct result of the combined operation of these banks has been the scaling down of the rate of interest on loans, which has enabled the small farmer and industrialist to secure the needed protection and encouragement to carry on their operations under adverse conditions.

During the last five years there has been a steady increase in the resources of our banks due mainly to the growth of bank deposits which rose to about P30,000,000.

On the inauguration of the Commonwealth, the total indebtedness assumed by the new government from the old regime amounted to P154,364,700 against which a sinking fund reserve of P59,287,901.73 had been accumulated, thereby leaving a net indebtedness of P95,076,798.27. Since the establishment of the Commonwealth up to December 31, 1940, new bonds in the total par amount of P5,392,300 had been issued, but on August 1, 1939, Public Works bonds issued on August 1, 1909, amounting to P3,000,000, were retired, thereby leaving a net issue of P2,392,300. The sinking fund reserve increased from P59,287,901.73 in November, 1935, to P75,980,484.01 at the end of the calendar year 1940. The status of the public debt as of December 31, 1940, was as follows:

Bonds of the National Government (proper) ……………………………. P128,450,000.00

Collateral Bends of the National Government, secured

by bends of the Provincial, Municipal end City Gov-

ernments …………………………………….,…………………………………….. P17,387,000.00

Provincial, Municipal and city Government bends er

direct issue …………………………………………………………………………… P 2,920,000.00

Total bonded indebtedness of all classes ………………………… P148,757,000.000

Total sinking fund reserve ……,………………………………………………. P75,980,484.01

Net bonded indebtedness of all classes …………………………………… P 72,776,515.99

The above figures show that during the Commonwealth régime through December, 1940, the gross and net indebtedness of the Government were reduced by P5,607,700 and P22,300,282.28, respectively.

Besides these bonds of the Government proper, there were also sold P6,000,000 worth of bonds of the National Power Corporation created by Commonwealth Act No. 120, the principal and interest of which are guaranteed by the Government.

The Manila Railroad Company has also outstanding bonds amounting to P28,718,000.00. We have taken steps to enable this company to redeem its outstanding bonds upon maturity. For this purpose the National Assembly last year appropriated P7,000,000 from the Coconut Oil Excise Tax Fund. The present program of the Government contemplates further yearly appropriations from this same Fund until the total bonded debt of the Manila Railroad Company is fully covered.

The currency circulation of the Philippines during this period showed an upward tendency from 1935 to 1938, but began to decline thereafter as may be seen from the following figures:

1935 (Average from November 14 to December 31, 1935) P114,648,486.98

1936 (Average) 164,524,168.76

1937 (Average) 181,203,519.52

1938 (Average) 207,465,286.45

1939 (Average) 199,044,925.28

1940 (Average) 181,251,052.08

The decline in circulation began in 1939, when the present war in Europe started. Owing to the marked increase in freight and insurance rates, and to the prevailing low prices of our export commodities, there resulted a scarcity of export bills which are the main source of supply of the dollar balances abroad of local banks. To replenish depletion of said balances and to cover payments for Philippine imports, local banks had to resort to heavy purchases of exchange in Manila and New York. These sales of exchange affected the monetary circulation of the Philippines for the reason that, under the law, currency tendered for the purchase of said exchange had to be retired from circulation.

The legal minimum reserve requirement has been maintained since the establishment of the Commonwealth as shown in the following statement:

Year (December 31) Total Government Circulation 15 Per cent Minimum of Government Circulation 25 Per cent Maximum of Government Circulation Cash Balance of Fund Excess Over Minimum Limit Excess Over Maximum Limit
1935 125,521,489.49 18,828,223.42 31,380,372.37 47,807,462.00 28,979,238.58 16,427,089.63
1936 152,383,173.68 22,857,476.05 38,095,798.42 43,763,192.36 20,905,716.31 5,667,398.94
1937 167,791,600.05 25,168,740.01 41,947,900.01 45,614,302.17 20,445,562.16 3,666,402.16
1938 197,429,811.57 29,614,471.74 49,357,452.89 47,396,156.76 17,781,685.02 (1,961,296.13)
1939 196,371,784.86 29,455,767.73 49,092,496.22 49,708,288.80 20,252,521.07 615,342.58
1940 186,018,426.65 27,902,764.00 46,504,606.66 52,055,874.51 24,153,110.51 5,551,267.85

The Treasury Certificate Fund constitutes the reserve for the redemption at par of all outstanding treasury certificates. This fund is always maintained to the amount of 100 per cent of all treasury certificates issued and outstanding. The fund is constituted exclusively of Philippine silver pesos, half-silver pesos, and of dollar deposits in the United States. The status of this fund for the period covered by the Commonwealth régime to December 31, 1940, was as follows:

Year (Dec. 31) Total Treasury

Certificates Cash Balance

Outstanding of the Fund

1935 —————————————————— P106,369,706.00 P106,369,706.00

1936 —————————————————— 132,155,000.00 132,155,000.00

1937 —————————————————— 145,333,275.00 145,333,275.00

1938 —————————————————— 174,763,462.00 174,763,462.00

1939 —————————————————— 173,611,590.00 173,611,590.00

1940 —————————————————— 163,143,955.00 163,143,955.00

As early as 1937 efforts were made to readjust our trade relations with the United States through

a revision of the economic provisions of the Tydings-McDuffie Act. The Joint Preparatory Committee on Philippine Affairs was organized and after two years of continuous work, it submitted a comprehensive report which served as the basis for the Philippine Economic Adjustment Act.

To carry out the main recommendations of the Joint Preparatory Committee on Philippine Affairs, steps have been taken to reorganize the national economy by encouraging modern methods of production; by increasing the yield of land through scientific farming; by extending credit facilities to merchants and producers; by lessening the cost of distribution so as to increase the share of the producer; and by providing gainful occupations for farmers who would otherwise remain unproductive during the greater part of the year.

In the development of our agriculture, we have stressed crop diversification and the adjustment of farm production so as to bring about as much as possible self-sufficiency in articles of prime necessity, and the production of raw materials to develop domestic industries and of products that can be marketed abroad under competitive conditions.

The National Assembly passed Commonwealth Act No. 565 providing for the organization of cooperative associations. Pursuant to the provisions of this Act, all government activities of that nature were placed under the National Trading Corporation. Progress has been made in organizing cooperatives among producers, consumers, and small merchants throughout the country, with a view to improving the economic condition of the masses.

Realizing the need of drawing up a program for the readjustment and rehabilitation of the sugar industry, the Government has provided under Commonwealth Act No. 567 a new method of taxing centrifugal Sugar mills and owners of leased sugar lands. The Purpose of this law is to place the industry in a position to maintain itself despite the gradual loss of its preferential position in the American market; to read­just the benefits derived from it by redistributing them more equitably among the elements concerned; and to give laborers employed in the industry a living wage and improved living conditions. Research is being undertaken to increase the yield, reduce the cost of production, and propagate better varieties of sugar cane, and to utilize its by-products.

Since the retroactive imposition of the tax on leased lands would have caused hardships and dif­ficulties to the taxpayers, the operation of this pro­vision of the law was suspended for the 1939-40 agricultural year. Similarly, I decided to waive the imposition of the additional progressive tax on sugar mills for the same agricultural year, as upon inves­tigation it was shown that the exaction of such tax during that period, would be confiscatory and oppressive.

The National Development Company and its sub­sidiaries have continued developing new industries. The policy laid down for these companies is not to enter into those fields which could well be left to private capital and initiative.

The National Rice and Corn Corporation has been able to keep the price of rice within the reach of consumers, while at the same time stimulating continued production. In carrying out its activities, the National Rice and Corn Corporation has given preferential attention to regions where its services are most needed.

The National Rice and Corn Corporation has carried on research work on longer storage of rice and the utilization of by-products.

The National Warehousing Corporation has been organized. Warehouses have been built for rice, abaca, copra and hemp in different sections of the Philippines, and it is expected that these warehouses will give farmers an opportunity to store their crops while waiting for favorable prices.

The National Footwear Corporation was established to help the footwear industry. This corporation has entered into a financial agreement with the National Footwear Cooperative Association composed of shoemakers of Marikina and other towns of Rizal, as a result of which, shoemakers and laborers now receive higher wages and are supplied with materials at reasonable prices.

The Cebu Portland Cement Company has been operating profitably. This company had completed plans to establish a factory for the manufacture of cement-asbestos roofing to replace galvanized iron. This project, however, has been suspended in view of the offer made by a private company to establish and operate such a factory.

The National Development Company has also helped in the financing of a cellulose factory for the produc­tion of cellulose from sugar-cane bagasse. It is be­lieved that the successful operation of this factory will help in the readjustment of the sugar industry besides producing an article which now finds a ready market in many parts of the world.

The Cotton Textile Factory was established in 1939. At the beginning it operated 10,000 spindles and 104 looms. Recently, the factory has been expanded and is now operating 20,000 spindles and 500 looms, to­gether with a finishing plant for bleaching, dyeing, printing and finishing work.

The National Food Products Corporation has now under way the establishment of a cannery in Capiz, in addition to the cannery previously set up in Guagua. The Corporation is financing the construction of 5,000 hectares of fishponds under contract with private landowners.

In order to improve interisland shipping and to aid in the establishment of a Philippine ocean—going merchant marine, the National Development Company has financed the construction of a modern coastwise vessel and three ocean-going ships. These vessels are now in the service and the commitments of the operators concerning interest and amortizations of the money invested by the Government have been fully met.

One of the many activities of the National Development Company during the last two years has been to effect the exploration of mineral deposits in the Philippines in cooperation with the Bureau of Mines. With the aid of experienced geologists from the United States some known petroleum-bearing areas have been explored as well as areas containing strategic minerals and other minerals needed for our industrial requirements.

I have authorized the expenditure of P500,000 for the drilling for oil in several places.

The exploration of the Surigao iron deposit has been completed. In relation to this deposit, the National Development Company has had experiments made in the United States and Europe to determine the best process that should be adopted for the most economical utilization of the ore. Exploration of coal deposits has shown that several sections can be commercially operated. The Cebu Portland Cement Company is now exploiting the Uling coal mine in Cebu to its ad­vantage.

The National Development Company is working a coal mine in Malangas in the Province of Zamboanga. With the output of this mine and of the Uling mine, it is believed that all the requirements of the Cebu Portland Cement Company and the Manila Railroad Company would be met eventually.

To increase the local consumption of sugar and to stabilize the market for refined sugar in the Phil­ippines, the Government has acquired the refineries of the Insular Sugar Refining Corporation and the Ma­labon Sugar Company.

Pursuant to laws passed by the National Assembly, the National Abaca and Other Fibers Corporation, the National Coconut Corporation, and the National To­bacco Corporation have been duly organized and are now in operation.

With the increased appropriations authorized by you last year, the office of the Resident Commissioner in Washington has been reorganized and now counts with a competent staff to handle all matters affecting our interests in the United States. The work of Resident Commissioner Elizalde in reorganizing that office and in developing it to its present efficiency is worthy of commendation.

The consolidation of the auditing and accounting services of the National Government was effected under the General Auditing Office. Whether or not this arrangement is conducive to greater efficiency or economy and should be made permanent, is as yet difficult to determine. Supervision by the General Auditing Office has been extended to public service companies and charitable institutions, and this has redounded to the public good, since through its findings, the Public Service Commission was enabled to scale down public utility rates to fairer levels.

Since the inauguration of the Commonwealth, the constitutional precept requiring a civil service based on merit and fitness has been adhered to. This policy has been extended to embrace almost all positions in the public service.

To better insure uniformity of action, the determina­tion of administrative cases has been placed in the Bureau of Civil Service and the Civil Service Board of Appeals.

Although the work has not yet been completed, considerable headway has been made in the classifica­tion and standardization of positions in the civil service in accordance with Commonwealth Act No. 402.

To provide some measure of economic security for government employees, the Government Service In­surance System has been established.

The growth of the System may be seen from the increase in the total amount of insurance from P45,919,713 in 1937 to P69,150,418 in 1940. The in­come for the first year was P2,419,544.06 as against P3,891,574.15 in 1940. The reserves of the System have likewise grown from P2,108,136 in 1937 to P9,851,604 in 1940.

The System was able to declare and distribute among its members dividends in the total amount of P1,152,402, notwithstanding the fact that the reserves have been computed on the most conservative valua­tion standard known in actuarial science.

The creation of the Budget Commission as authorized by Commonwealth Act No. 5 has been justified by the results attained. The National Government has been able to maintain the principle underlying sound budgetary system that the ordinary operating expenses of the Government must be kept within its current income, except when a grave national emergency or a serious financial difficulty arises.

The Commission has been instrumental in effecting economy in the expenditure of authorized appropriations and special funds, in the coordination of various administrative services, and in avoiding the employment of unnecessary personnel.

The work of the Census Commission, for which the Assembly set aside a total of P3,600,000, is now almost completed. Some 35,000 persons cooperated in the task of compiling the data on the population of the Philippines. According to the result of the census, the population of the country on January 1, 1939, was 16,000,303. All reports on geography, agriculture, lands, forests, fisheries, mines, manufactures, construction, commerce, transportation, communication, and services are now in process of printing.

Control over immigration has been strengthened by the creation of an independent Bureau of Immigration, and the enactment of appropriate measures regulating the entry of aliens into the country. The port of Ma­nila is now the only unlimited port of entry in the Philippines.

To increase the water supply, the Metropolitan Water District added the Ipo Dam to the Angat System at cost of P800,000, and also the Bicti-Novaliches Siphon Aqueduct costing P467,550. The water service was extended to Las Pinas which necessitated the construction of a 200,000-gallon elevated tank at Paranaque, Rizal, costing P31,000.

The District has completed the construction of a high pressure reservoir which safeguards filtered water from pollution. With the new Santa Ana Steel bridge, the dangers of a subaqueous pipe under the Pasig River have been eliminated.

To improve fire protection in Tondo, Caloocan, and Malabon, a 30-inch feeder main from Pureza street, to Antipolo street, Manila, was laid at a cost of P178,518.

The sewage system has been improved with the initial execution of a ten-year program for the extension of pipes all over the city as far as Pasay, Rizal. The laying of a network of storm drains and the improvement of esteros have been undertaken with an appropriation of P2,000,000.

With the general reduction of the water and sewer rates and the elimination of the service maintenance charge, our rates are now among the lowest in the world.

The rapidly increasing population of the City of Manila-and the highly unsatisfactory conditions in the districts where the laborers live have constituted a problem which for a long time needed attention. To solve this problem, as well as to give an impetus to scientific community planning, Quezon City has been created, adjoining the City of Manila, and is now being developed as a model community.

The Government owns about one third of the 7335 hectares that comprise the City and can carry out this plan without the necessity of acquiring lands on a large scale for public purposes. Sites for parks, schools, markets, and other public buildings have been reserved and streets have been plotted wide enough to meet the needs of traffic. The new Capitol is now under construction at the end of a formal avenue 60 meters wide.

Government lands have been subdivided and are being sold to government employees and to the public for homesites on reasonable terms.

A zoning plan is in preparation under which busi­ness districts will be established in places planned for them, with adequate space for traffic and parking.

A new campus for the University of the Philippines has been laid out. It contains 490 hectares, large enough to meet the needs of the institution.

Buildings are now under construction in Quezon City for a proposed exposition. These buildings will serve to house agricultural and industrial exhibitions in the future.

A comprehensive study of the park and recreational problems of the Philippines is being made under the direction of the adviser on national parks assigned from the United States National Park Service. This study will include an inventory of the national scenic, historic and scientific resources of the country. From this inventory a selection will be made of those areas which offer the greatest recreational and inspirational values.

The national park office is cooperating with the Bureau of Forestry and the Bureau of Public Works in the preparation of master and layout plans to control the development of the park areas.

The national park office is encouraging provinces and municipalities to develop their own park and playground systems in order to take care of local recreational needs. All possible planning assistance will be offered to local authorities. Cooperative studies are now being made of a park and playground system for a greater Manila.

The economic repercussions of the present World War are being felt more and more acutely in the Philippines. Our trade with many nations has been reduced, prices for our export commodities have gone down, and freight and insurance rates have increased more than two hundred per cent. The result has been a decline in national income and purchasing power.

We are experiencing a marked decrease in our revenues, particularly in customs collections. But a drastic reduction of government expenditures at this time might not be advisable because it would tend to aggravate business conditions. It will be necessary, however, to readjust our expenditures and make use of our surplus reserves in order to prevent a deficit at the end of this fiscal year. I shall furnish you more de­tails on the subject when I submit the budget for your consideration.

The depressing effects of the war on our economic and social conditions have been aggravated by the failure of the rice crop due to the drought in many sections of the country. The Department of Agricul­ture and Commerce and the National Rice and Corn Corporation have estimated a fall of about 20 per cent in our normal rice harvest.

We are thus confronted with the necessity of insuring a sufficient supply of rice and of helping people in our agrarian areas to find work which will tide them over until the next harvest. While before we could import the rice needed from Indo-China, Burma, and Thailand, we now encounter difficulties in ob­taining rice from those countries. Fortunately, the National Rice and Corn Corporation has a carry-over stock of approximately 550,000 cavanes of rice which will be sufficient to cover the shortage in our stock for several months. I believe that any subsequent deficiency could well be filled by inducing our farmers to make a second planting of rice, particularly in those areas that can be irrigated.

Upon the recommendation of the Department of Agriculture and Commerce, I have authorized the expenditure from relief funds of the amount of P100,000 for the purchase of seeds to be loaned to farmers who want to plant rice, corn, mongo, and other food products. This plan, if it receives the cooperation of the people, will insure an adequate supply of rice and corn, and will provide tenants with work and means to carry on until next year. I have also authorized the granting of crop loans to these tenants from the emergency fund to defray the cost of planting and for the maintenance of their families until harvest time.

To give employment to those who have suffered from crop failures and to others who may need work, I have ordered the acceleration of public works projects already authorized. I feel that in times of stress, like the present, when private business and initiative are forced to limit the employment of laborers, the Government should take up the lag by expediting public works construction.

In order to reduce the harmful effects of droughts, I have directed the Department of Public Works and Communications to speed up irrigation projects.

Except for the adverse circumstances I have noted, the general conditions prevailing in the Philippines are satisfactory. We have been free from epidemics and other contagious diseases; peace and order has been maintained; litigations are being decided by the courts with greater speed; the school problem has been effec­tively met; and the relations between capital and labor are gradually being established on a more equitable basis. The people are showing confidence and faith in their Government and are making greater efforts to pay their taxes. We have, therefore, every reason to be gratified at the progress we have so far attained, in spite of the disturbing effects of the international situation.

In view of the present state of our revenues, I found it necessary to order the suspension of some projects not considered urgent. I have also approved the policy of restricting the filling of vacancies in the service and prohibiting increases in salary in the same position in the upper grades. I believe the time is not opportune for expanding the existing services or estab­lishing new ones. There are, however, some pressing needs which it is my duty to bring to your attention.

The frequent failure of crops resulting from droughts demands that we construct more irrigation systems. Such constructions will provide employment for laborers during this period of widespread economic stress. In order to improve our fishing industry, I again recommend that the present Division of Fisheries of the Department of Agriculture and Commerce be converted into a Bureau of Fisheries and that a school of fisheries be established under the bureau.

We are feeling more than ever the need of bringing science to the aid of industry. I desire to reiterate my recommendation made at your last session to consolidate all the scientific research activities of the Government into one research institute.

To effect a more equitable distribution of land, the Public Land Law should be amended so as to prohibit any owner of one or more parcels of land from acquiring lands by homestead and free patents the total area of which, added to that of his own land, shall exceed 144 hectares.

I believe that it would be conducive to greater efficiency and economy to place all credit institutions was a one supervisory agency in the Government. I, therefore, recommend that the duties now assigned to the Bureau of the Treasury relating to insurance companies, mutual aid associations, and trusts, be taken over by the Bureau of Banking and that you authorize the transfer to this Bureau of all the personnel of the Bureau of the Treasury assigned to those duties.

For some time we have been having difficulty in obtaining certain government supplies and materials from abroad at reasonable prices. In view of this, the Division of Purchase and Supply should be au­thorized, subject to the approval of the President, to purchase in advance of requisitions, supplies and materials that are regularly needed.

The Constitution provides that all educational in­stitutions shall be under the supervision of, and subject to regulation by, the State. Commonwealth Act No. 180 places under the supervision of the Office of Private Education only private schools granting di­plomas and certificates. I recommend that this Act be amended to conform fully to the provision of the Constitution by requiring that all private schools, ir­respective of whether or not they grant diplomas or certificates, be supervised by the Office of Private Education.

I am informed that the Commission on Elections will submit for your consideration a proposal for the amendment of our election laws. I ask you to give careful consideration to this proposal, particularly in relation to the appointment of election inspectors. The present system, whereby election inspectors are appointed upon the nomination of political parties, does not insure an impartial attitude on the part of the inspectors in the performance of their duties.

The constitutional amendments shortening the Presidential term from six to four years and prescribing the tenure of the members of the Congress—four years for Representatives and six years for Senators, with one-third of the members of the Senate to be elected every two years—require the setting of a definite schedule for the holding of elections so that, including the election for provincial and municipal officials, they may not occur more than once every two years. To this end, I recommend that the term of office for elective local officials be changed from three to four years, effective after the next election.

The constitutional amendments recently approved require executory legislation, which, I trust, you will pass in due course. In this connection, I desire to invite your attention to the provisions of Article VI, Section 17, and of Article VII, Section 11 (2), of the Constitution, which contains inhibitions affecting mem­bers of the Congress and certain officers of the Exec­utive Department. I recommend that proper legisla­tion be passed at this session to implement these constitutional provisions and provide sanction against their violation.

Conditions all over the world have changed since the outbreak of the present war. This change is bound to retard our progress towards some of the economic and social objectives that we have set. But we cannot abandon these objectives. We must pur­sue them with greater determination even if their achievement should entail added sacrifice.

We cannot now foretell the situation that will arise in the world after the war and it inadvisable to adopt economic plans based on future conditions that might never materialize. In the mean­time, we should continue to minister to the health and welfare of our masses, intensify our efforts to solve the unemployment problem, speed up the execution of our program of national defense, stimulate the in­crease of our national income, insure a sufficient supply of food and clothing for any eventuality, promote social justice, push forward the extension of our educational facilities and the advancement of our cultural life, and safeguard for all our people the proper exercise of individual rights.

Gentlemen of the National Assembly, these are fateful days in which we live. Vital forces are reshaping political and social institutions the world over. Fear and want are afflicting the human race. Men and women everywhere are scanning the future for security and a more promising life. In the midst of this great crisis, our duty is clear. By a solemn covenant with America, the advent of our national independence is assured. We must prepare for it; we must not procrastinate; we must not falter. Trusting in Divine Providence, we must move forward firmly and courageously to achieve our long-cherished ideal—the establishment of the Philippine Republic—and to secure for our people prosperity, happiness and freedom under the shelter of peace and democracy.

Manuel L. Quezon, 5th SONA, 1940

19 Oct

5th State of the Nation Address of His Excellency
Manuel L. Quezon
President of the Philippines
to the 2nd National Assembly
On The State of the Nation

[January 22, 1940, Delivered at the Opening of the Second Session in the Assembly Hall, Legislative Building, Manila]

Gentlemen of the National Assembly:

You are convened at a time when many countries of the world are in the throes of war. The agonies which the nations involved in the conflict are suffering can­not but touch our hearts deeply. We sympathize with their sad fate and we pray to God that the tragic ordeal may soon come to an end. No nation, however far removed from the struggle, can escape its disturbing effects. Even we are experiencing the inevitable consequences of this war in the way of reduced trade with the warring nations and their neighbors, in­creased transportation and insurance rates, depressed prices for export commodities, and other intangible effects which result from a stoppage or a drastic limi­tation of world trade. Withal, we are fortunate that we are at peace and that it is the policy of the United States to stay out of the war. With that policy we are in full accord.

The United States Congress, in its last session, passed a neutrality law defining the obligations of the United a States towards the belligerent nations and prescribing, limitations upon commercial intercourse between them and the peoples living under the American flag. The Philippines is bound by that Neutrality Act, and our Government and people are fully cooperating with the United States Government in its strict enforcement. It is our good fortune to have in these very critical times, His Excellency, Francis B. Sayre, as United States High Commissioner to the Philippines. He is a scholar, a diplomat and a statesman. During the last three years he has been engaged in the study and consideration of our problems as Chairman of the United States Inter-Departmental Committee and of the Joint Preparatory Committee on Philippine Affairs. No one has labored more than he did in securing the approval by the Congress of the United States of the Economic Adjustment Act. He merits our gratitude for that signal service.

All the requirements prescribed by Congress for the effectiveness of the Economic Adjustment Act have been fulfilled. The Act, therefore, is now in full effect and all the agencies necessary for its en­forcement have been set up. The quotas for different products provided in the Act have been allocated. It is my purpose to submit to you at an early date a definite proposal to permit the Government to lay the groundwork for the economic conference that is to be held at least, two years before the establishment of the Philippine Republic.

In your last special session, you approved laws to protect the people against profiteering during these war times, and to insure for the country a steady and sufficient supply of prime necessities and the continued operation of farms and factories. To accomplish the first aim, maximum prices for the most important commodities have been fixed and are being enforced. To attain the second purpose, the National Trading Corporation with a capital stock of P5,000,000 has been organized. A detailed report on these matters will be submitted to the National Assembly as required by law.

Pursuant to the provisions of Commonwealth Act No. 453, I have effected a reorganization of the De­partments of the Interior, Agriculture and Commerce, and Labor. The National Information Board was abolished as a separate entity and converted into a division of the Department of the Interior. The activities of the various bureaus and offices under the Department of Agriculture and Commerce were properly coordinated, thus avoiding the overlapping of functions. The Bureau of Labor was abolished, and its work distributed among the various divisions of the Department, performing identical functions. The Division of Immigration was reorganized and its personnel increased with funds appropriated under Commonwealth Act No. 501.

We are making progress, however slowly, in our determination to raise the masses of our people to a position of relative ease. But our task is an ex­tremely difficult one. Capital in the Philippines does not as yet seem to fully realize its obligations to labor and to society, and it will be necessary for you to enact after due investigation further labor legislations that will secure for the underpaid laborers higher wages and better living conditions, especially in the mining and sugar industries.

I regret that there are some labor leaders who insist upon resorting to strikes as the proper and best means of obtaining recognition of labor rights. Where, as in the Philippines today, the Government is earnestly endeavoring to help labor in its just claims, strikes are unnecessary and unjustified. Although the right to strike is recognized by law, strikes are, by their nature, a form of coercion, and once coercion is used by one party in, a conflict, it pro­vokes retaliation by the other party. Hence, strikes often result in physical violence, sabotage, and public disorder. When such a situation arises, the Gov­ernment is compelled to intervene, and when the Government intervenes to suppress violence and restore public order, it has to act swiftly under circumstances that often inflict loss or injury upon in­nocent parties.

Moreover, experience shows that the cost of strikes both to capital and labor in terms of financial losses, physical and moral suffering, and otherwise is enor­mous. Such loss, directly or indirectly, is shared by the whole community. Strikes should not, therefore, be used except as a last resort, for the settlement of industrial and agrarian disputes or for securing recognition of the rights of labor. Arbitration or adjudication by the Court of Industrial Relations has been found to be less wasteful and more expedient procedure for securing substantial justice. In any event, when a strike is declared, the use of violence or sabotage, by either side, will not be countenanced by the Government.

Our policy to acquire large haciendas with a view to their sale in small parcels to the peasants who work them and to purchase urban land to provide homes for the poor on easy terms is being effectuated. But here again we are met with serious difficulties in some instances, coming either from selfish and greedy land­owners or from irresponsible and dishonest agitators. In the Hacienda de Buenavista in Bulacan, for a long time a focus of unrest and disturbances, some of the tenants who have been made to believe that they could become the owners of the land without paying for it, are as yet not fully convinced that they have been deceived, and instead of welcoming the help of the Government, are either refusing to agree to the plan devised for the ultimate transfer to them of their landholdings, or in some other way trying to frustrate the plan. The management of the Hacienda, although carrying out the plan with firm determination, is showing extreme patience, because it is believed that these misguided people will sooner or later realize that we are seeking only their best interests and will then lend their full cooperation to the plan.

The Government has already purchased large parcels of land for homesites in Marikina, Rizal; San Pedro Tunasan, Laguna; and Dinalupihan, Bataan. Steps are being taken to expropriate the homesites in Malabon, Rizal. These purchases comprise lands owned by some corporations where people in large numbers have built their houses. We are trying to free these communities from the grip of absentee landlordism and to help them become owners of their homes, under terms and conditions that they can bear.

It is in the City of Manila where we are confronted with the most serious situation. Here the largest number of industrial workers live. Here, too, unem­ployment is at its worst. Individuals with no stable occupation but who can find work only occasionally, abound. The result is that in several sections of the city—Intramuros, Tondo, Sampaloc—there are many slums where the poor live under conditions totally unfit for human beings, crowded together in small quarters without sufficient ventilation or sanitary facilities.

In an effort to relieve Manila of a part of its congested population that can conveniently go to live in Quezon City, we have purchased a large parcel of land, known as the Hacienda de Diliman, with an area of about 1,600 hectares. The plan is to offer to government officials, especially the small salaried employees and laborers, for sale or rent, lots where they can build, or have the Government build, their homes. In the subdivision of this land there will be portions which may be acquired by private individuals, both the rich and those of moderate means. There will also be sections set aside for industrial establishments. This project which we have placed under a most capable management, at no cost to the Government, is in process of execu­tion. Roads are being constructed and lots subdi­vided; model houses are being built and in due time the lots and the houses will be ready for sale. But this project cannot by any means solve the problem of the slums, nor provide decent homes for all line poor living in the City of Manila and its vicinity. In the first place, Diliman is too far for those laborers who work in or around Intramuros and Tondo. In the second place, if all the people residing in the overcrowded districts were to go to Diliman, there would not be sufficient room for them. From the reclaimed area in the North Fort, fifty hectares or 500,000 square meters will be reserved for the fishermen of Tondo, Pasay, and Baclaran, as well as for laborers in the water-front. But even with this plan, which will be in the course of execution next year, we shall not be able completely to do away with the slums or to have all the residents of this city live under proper sanitary conditions.

We must expropriate more land. Fortunately, there is more than enough unoccupied land within the radius of the city itself and its immediate sur­roundings that can be used for this purpose. But the prices of these lands have been unjustly boosted by their owners. The increase of population and the public improvements made by the Government are being taken advantage of by these land profiteers to exploit the public. These lands have been held unimproved all these many years. Their owners have valued them for purposes of taxation at incomprehensively low prices, and now for lands that are assessed at four centavos per square meter, the owners are exacting from the Government or private indi­viduals a price of three, four and even more pesos per square meter. This should not be tolerated.

While it is our purpose to maintain inviolate the right, of private property, we must not pay more than what is just compensation therefore, taking into con­sideration the value at which the property has been assessed upon the owner’s own declaration or with his consent. I recommend, therefore, that the Assessment Law be amended by providing that whenever an as­sessment is made for the purpose of imposing the real properly tax and the same is not protested by the owner thereof, within a specified period after receiving notice of the assessment, said owner will be deemed to have agreed and accepted the valuation as the just and fair value of his property, and that, in case of expropriation proceedings by the Government or its instrumentalities, the assessment shall be taken as prima facie evidence of the value of the property. I likewise desire to submit to your consideration the need of imposing special assessment tax upon real property that have greatly appreciated in value as a result of the construction by the National Government of roads or other public improvements. The owners of such properties have no right to enjoy the extra­ordinary rise in value or the increase in the income, without contributing proportionately to the cost of said improvements.

There are many cases involving the ejectment of poor people who have built small houses on unim­proved lands with the consent of the owners thereof. Because of the construction of public improvements, the value of these lands has risen suddenly and the owners are demanding prices which are far beyond the ability of their tenants to pay. It is cruel to permit the ejection of these poor people and to have their houses destroyed, thus leaving them without shelter. The National Assembly should consider the advisability of amending the existing law regulating ejectment proceedings so as to protect such tenants by pro­hibiting their ejectment until the Government has had opportunity to take care of them.

Unemployment continues to be one of the main problems of the Government, and that problem, in all likelihood, will confront us for some time to come. For the purpose of assisting the Secretary of Labor in the study of this matter, I have created an Advisory Board on Unemployment; and, as an aid to the solu­tion of the problem, or at least to prevent its aggra­vation, I recommend the enactment of immigration laws that will place limitations upon foreign immigration thus protecting Filipino labor from alien competition. We should, however, do away with the existing discrimination against Orientals, it being unjust and unfair to close our door to races which are akin to ours.

The fiscal operations of the Government during the past year have been satisfactory. Revenues have exceeded ordinary expenditures during the last fiscal period by P6,928,977.45, although this excess and a part of the accumulated surplus were used to cover extraordinary or nonrecurring expenses amounting to P23,927,909.43. Actual collections exceeded budgetary estimates in the amount of P5,323,573.66. The condition of the excise tax fund will be reported to you in a separate message. The public debt has been reduced as required by law and is now only P79,582,982.84, as compared to P95,076,798.27 in 1935. This public debt will be more than amply covered from the proceeds of export taxes provided in the Independence Act, accruing before 1946. In addition to this public debt, however, the Manila Railroad Company has an outstanding obligation in the amount of P26,472,000 for which no sinking funds are being provided. In order to protect the credit of one of our most im­portant enterprises, the Government will have to as­sume the payment of this debt maturing in 1956. I recommend that the National Assembly consider a plan establishing a sinking fund for these obliga­tions from the proceeds of the excise tax in the event the Manila Railroad Company is unable to provide therefore.

The business corporations of the Government have been operated efficiently and in the public interest. While the National Food Products Corporation is still operating at a loss, the Cebu Portland Cement Company, the Insular Refining Company, the Manila Port Terminal, and the National Bank have ail made substantial profits during the past year. The National Development Company has also made a profit from its own operations as well as from its operations as a holding company.

The Agricultural and Industrial Bank has been organized and is now in operation. The main purpose of this bank is to help agriculture and industry, chiefly in the establishment of new industries, the production of new crops and the extension of cultivation and diversification of products in farm areas.

The National Power Corporation has decided to undertake the development of the Caliraya water project. The construction of this project is under way. The bonds issued by the corporation to finance this enterprise were oversubscribed.

The exploration of our oil resources is being pushed forward as rapidly as possible and within a few months the geological survey will be completed. As soon as the result of the survey is available, it will be time to decide whether drilling operations should be under­taken by the Government or by responsible private companies.

The Government has been giving impetus to the organization of cooperatives for consumers, producers, and small merchants to eliminate middlemen and need­less entrepreneurs. This form of economic organiza­tion has been successful in other countries, and I can see no reason why it will not meet with the same success in the Philippines. It will probably take time to educate our people on the value of cooperative effort, with the discipline and intelligent collaboration required by that method of economic endeavor. We have to contend with the apathy prevailing in cer­tain groups as well as with old practices and tradi­tions which are both uneconomic and otherwise unde­sirable. But I have faith that these difficulties will be overcome. The successful operation of these co­operatives will aid in a great measure in the solution of our economic problems and in the ultimate stab­ilization of our national economy.

Retailers’ cooperatives are being organized in Ma­nila and in the provinces. The Buenavista Coopera­tive is in operation. The shoemakers of Marikina and neighboring municipalities have likewise been organized into a cooperative association to permit them to own and operate the industry themselves. It is my opinion that the same thing might be done with regard to hat-makers. The Hemp Corporation is undertaking the organization of cooperatives among hemp producers. The same thing will be done with respect to coconut producers.

The coconut industry has long been suffering from depressed prices. This is partly due to inefficient methods of curing copra, lack of credit facilities, and faulty system of marketing. It is also attributable to the failure to utilize the by-products of the coconut. In view of the authorization granted in the Economic Adjustment Act, permitting the use of this excise tax on coconut oil for the purpose of improving the curing of copra and the granting of crop loans to coconut producers, I recommend that the National Assembly pass a law allowing the organization of a corporation for these purposes.

The tobacco industry is going through a most critical period; booth in the factories and in the fields. Prices for leaf tobacco are even now not sufficient to insure reasonable returns to farmers, and with the gradual loss of foreign markets, the situation will aggravate. Cigar makers are suffering from low wages, partly because we have not been able to find enough markets for our high-priced cigars.

The Government is undertaking a serious study looking to a solution of the problems confronting this industry, and I recommend that you consider the advisability of authorizing the creation of a tobacco corporation that will provide credit to farmers, aid in the proper curing of leaf tobacco, improve the quality of tobacco and cigars, and stimulate the production of cigarette tobacco. This corporation, when organized, could take over the duties assigned to the To­bacco Board in the investment and disposition of the funds collected from inspection fees. The Warehousing Corporation has under construc­tion eleven warehouses for rice, copra, hemp, and tobacco, and others are being planned. The purpose of these warehouses is to provide storing facilities for producers, meantime permitting them to obtain credit on the security of their crops.

The Koronadal land settlement project in Mindanao has been started. There are now approximately 2,000 men in that territory. More are going at the rate of 250 every month. An irrigation system has been built and experiments have been conducted covering dif­ferent crops. The results thus far have been most encouraging, and the program for this year is to place, under cultivation in that area, no less than 3,009 hec­tares. Everything is being done to safeguard the health and well-being of the settlers.

I wish to invite attention to the economic adjustment projects recommended in the report of the Joint Preparatory Committee on Philippine Affairs. Some of these projects are in process of execution; others are still in an experimental stage or under study. In order to properly carry out the plan to promote new crops and greater diversification of products, it is necessary, as recommended by the Joint Preparatory Committee, that we establish, as soon as possible, adequate agricultural, experimental and demonstration stations. The existing stations, maintained entirely with funds contributed by provinces and municipalities, are inade­quate. It is not possible to conduct experiments in so many stations which are insufficiently financed. Moreover, the necessary trained men for the opera­tions of these stations are not available. I recommend that the National Government assume full respon­sibility of establishing and operating experimental and demonstration stations in carefully selected places in order that the experiments and demonstrations may be conducted on a more scientific and systematic basis.

Closely allied with the problem of economic ad­justment is the question of scientific research. I de­sire to reiterate my recommendation in a previous message to the National Assembly to consolidate all the agencies of the Government engaged in scientific research into one scientific research institute, using the Bureau of Science as a nucleus for the purpose. The expenses for its operation may be covered with the funds appropriated for the Bureau of Science and the other agencies of the Government dealing in re­search. This project has been strongly recommended both by the Department of Agriculture and Commerce and by the National Economic Council in view of the report submitted by Dr. Raymond Bacon who was employed by the Government to study this matter.

It is necessary to expand the activities of the Bureau of Commerce to enable it to cope with the increasing demands of our growing trade. Division for the promotion of exports and for the stimulation of local trade should be organized in that bureau. To protect the rights of inventors and manufacturers, a patent office should be established.

One of the most important but neglected industries is our fishing industry. To enable the Government effectively to promote this industry and to exercise the necessary supervision and control over the same, I propose the conversion of the present Fish and Game Administration Division into a bureau under the Department of Agriculture and Commerce.

It is hardly necessary to emphasize the importance of organizing an office to collect and compile statis­tical data for the use of the Government and the public. The Census Commission, after it has completed its work, should be converted into a per­manent bureau to render that service.

Many public improvements authorized by the Na­tional Assembly were accomplished during the year that has just ended. First-class roads were increased by 208 kilometers, second-class roads by 878 kilometers, and third-class roads by 854 kilo­meters, thus making a total of 21,166.1 kilometers for all classes of roads, of which 10,310.4 are national roads and 10,805,7 provincial roads. Many public buildings were erected, including 386 school houses.

Our system of transportation has been greatly improved and extended. The railroad to the Bicol prov­inces has been completed and opened to traffic. Many bridges and port facilities have been built, and new boats have been added to the coastwise and interisland shipping. The number of ships under Philippine reg­istry engaged in overseas trade has increased, and three new ocean-going steamers are now in the service. This fact should be a source of satisfaction and benefit for our country, not only because it will permit the carrying of the Filipino flag to distant lands, but also because it will help in insuring sufficient bottoms to carry our exports to foreign markets, particularly during the present emergency. The Government, however, is not contemplating the acquisition or operation at least during the next few years, of ocean-going steamers.

The Department of National Defense, created by Commonwealth Act No. 432, was organized, effective November 1, 1939. This new department has execu­tive supervision over the Philippine Army, the Bureau of Aeronautics, the Bureau of Coast and Geodetic Survey, the Philippine Nautical School and over the establishment and operation of all radio stations other than those maintained by the Bureau of Posts. As the appropriation used by this new Department for the current fiscal year was taken from the forced savings in salaries and wages and sundry expenses of bureaus and offices under the Office of the President, it is recommended that adequate appropriation be provided for this Department for the coming fiscal year.

There are at present 363 officers and 3,735 men in the regular army and 4,829 officers and 104,412 men in the reserve. This shows that the youth of the land have responded patriotically to the call of duty and indicates how much has been accomplished in the execution of the National Defense Program.

Substantial progress is being made in public sanitation and in providing the poor with medical service. But there are still a number of provinces that do not count with proper hospital facilities. With the aid of the National Government, a more generalized pro­gram of hospital construction is being gradually carried out.

More funds should be appropriated for the care and protection of the under-privileged—the aged and infirm, the dependent and the destitute, as well as the neglected and the delinquent, the physically and the mentally handicapped children.

The extension of opportunities for public educa­tion to all children of school age continues to be one of the major problems of the Government. De­spite the opening of 3,600 extension classes and the construction of new buildings, there are still many children of school age out of school. The difficulty of the problem lies not so much in the shortage of funds as in the insufficiency of professionally-trained teachers. I have appointed a Joint Educational Sur­vey Committee for the purpose of studying and rec­ommending a solution for the recurring school crisis.

Greater importance is being given to character and civic education and the fostering of patriotism among the children and the youth. For this purpose, a code of citizenship and ethics has been promulgated and courses of study on character and civic education are being revised.

There is a growing popular response to the work of the Office of Adult Education as shown by the fact that there are How over 4,000 schools for adult citizens.

The survey conducted by the Board of Regents with the advice of two outstanding educators from the United States on the needs and problems of the University of the Philippines has been completed, and many of the recommendations are being put into effect. The transfer of the institution to the new site in Quezon City will proceed as rapidly as cir­cumstances will permit.

In order to meet the need of our industries for technological service, it is advisable that we increase the number of government scholarships abroad. From the appropriation at our disposal, we are able to grant only twenty scholarships every year. The better to carry out our program of economic development, this number should be increased.

For the first time in our judicial history the Su­preme Court has brought its docket up to date, while the Court of Appeals is fast moving to clear its own calendar of cases. The Supreme Court has not only decided many important questions but also enun­ciated constitutional doctrines that have far-reaching effect. In addition to this noteworthy accomplishment, the Court has recently promulgated the Rules of Court, which constitutes a revision of our procedural laws designed to expedite litigation and to render less expensive but more efficient the administration of justice.

As a consequence of the enactment of Common­wealth Act No. 177, carrying out the Constitutional mandate to extend the merit system to all branches and subdivisions of the Government, the selection of employees, not only in the national but also in the local governments, has been based on the merit sys­tem and practically all government employees are new in the classified civil service. All positions in the Government have been classified and salaries standardized as required by the Salary Law.

The volume of work in the Office of our Resident Commissioner at Washington is continually increasing as a result of the supervision of that Office of the various interests and activities of the Commonwealth Government in the United States. Whereas in the past the work of the Resident Commissioner was lim­ited to his congressional duties, it has become nec­essary since the establishment of the Commonwealth to entrust him with other duties as the representative of our Government in America. He has to supervise the work of the insular purchasing agent and the tobacco agent, take charge of matters relative to government pensionados, disseminate accurate information about the Philippines, promote Philippine trade, and look after the interests of Filipinos residing in the United States and territories. It is recommended that the appropriation for the Office of the Resident Commissioner be increased sufficiently to enable it to discharge efficiently these new duties and responsibil­ities.

The provinces, cities, and municipalities have maintained a sound financial position. The revenue laws recently passed by the National Assembly will increase their income by approximately P10,000,000 which will be twice as much as they used to receive from the cedula tax. The municipalities, however, are meeting Serious difficulties m balancing their school budget. The total estimated deficit of municipalities for current expenditures in the school fund is around P500,000. This deficit could be met by the repeal of the pro­vision of the new Real Property Assessment Law reducing to 50 per cent the valuation of coconut, hemp and other similar improvements. There is no justification for such a provision, considering that there is now being undertaken a revision of prop­erty values which is the best means for a proper assessment. This conclusion becomes more evident when it is considered that some provinces have only recently reduced the assessment of such improve­ments adjusting it to present conditions, as in the case of the Provinces of Tayabas and Laguna. I urgently recommend that the National Assembly take early action repealing that provision.

On September 15, 1939, the National Assembly adopted a resolution proposing important amendments to the Constitution. I refer to the amendments es­tablishing a bicameral legislature, changing the tenure of office of the President and the Vice-President, creating an independent Commission on Elections, and fixing a compensation for Senators and Representatives higher than that now received by the members of the National Assembly. By Commonwealth Act No. 492, it is provided that these amendments shall he submitted to the people for their ratification at the next general election for local officials. After hearing the views of provincial and municipal officials and the members of the Council of State, as well as other persons who have no partisan interest, I deem it my duty to recommend that the law be amended so as to authorize the holding of a plebiscite on these amendments on a date different from that fixed for the election of provincial and municipal officials. While this may entail more expenses for the Government, I believe that the change is imperative from the stand­point of public interest.

The proposed constitutional amendments are in effect a revision of the present Constitution, and the resolution proposing the same clearly contemplates that they should be submitted to the people in an integrated form. The amendments so affect the entire document and in this sense are so interrelated as to preclude any manner of having them voted upon separately or severally.

The importance of these amendments requires that they be submitted to the people for ratification or re­jection squarely and without the introduction of extraneous and irrelevant issues, and this would be impossible if the plebiscite were held on the same date as that set for the next regular election of local officers. The proposed amendments affect only the national Government and should be acted upon by the voters independently of local political interests or considerations.

The conquest and subjugation of formerly independent nations, the invasion by strong powers of insufficiently defended territories, the not infrequent disregard of international covenants and laws have of late caused great anxiety in the minds of many people both in the United States and in the Philippines, and not a few of them are raising the question whether it is the part of wisdom to carry out the plan already agreed upon of establishing the Philippine Republic in 1946.

No one can feel more keenly than I do the responsibility for the future of our people. The sacred duty of leading our Government through these first years of preparation for an independent national existence has fallen to my lot, and I have tried to discover by every means at my disposal if there be any compelling reason why the plan as decreed by the Congress of the United States and accepted by us should not be put through. I am of the opinion that the international situation has not developed to a point where anyone can predict what the fate of small nations will be in the years to come.

In the discussion of a possible change in the program of independence embodied in the Independence Act, it is important to bear in mind the following considerations:

First. That the Government of the United States will not consider favorably any proposal merely to post­pone the granting of independence beyond 1946, meanwhile continuing the present political and economic set-up in the relations between America and the Philippines.

Second. That if the Filipino people are unwilling or afraid to assume the responsibilities of independent nationhood by 1946, their only alternative is to petition Congress to declare the Philippines permanently as American territory.

Third. That America will not assume the obligation to protect the independence and territorial in­tegrity of the Philippines against foreign aggression.

In the face of these considerations, the question for us to decide is whether because of the uncertainty of the future of small nations, we should abandon the idea of becoming independent.

I am unalterably opposed to the prolongation of the present political set-up beyond 1946, because I believe that it is not conducive to our best interests. On the other hand, we cannot consider permanent political relationship with America except on the basis that the Philippines would at least have full and complete power over immigration, imports, exports, currency and related financial subjects, as well as the right to conclude commercial treaties with other nations, without being subjected to the super­vision and control of the United Slates. This, I am quite certain, is not feasible, considering the present state of public opinion in America.

It would be utopian to believe confidently that the Philippines would not be exposed to foreign aggres­sion, once we cease to be under the protection of the American flag. But, if we want to have the untram­meled right to govern ourselves as we think best for our own welfare, we must assume the responsibilities that go hand in hand with that right. That means that we shall have to depend upon our­selves and take our chance exactly as every inde­pendent nation had to do.

We hope for the best. We shall promote friendly relations with other nations and be mindful of their rights. We shall endeavor to protect and defend our national integrity and independence to the limit of our means. We know not what the future has in store for us, but we have faith in a just God who presides over the destinies of nations, and who alone holds our fate. We cannot falter in the at­tainment of our long-cherished Ideal. We must secure a place, however modest, in the concert of free nations.

Manuel L. Quezon, 4th SONA 1939

19 Oct

4th State of the Nation Address of His Excellency
Manuel L. Quezon
President of the Philippines
to the 2nd National Assembly
On The State of the Nation and Important Economic Problems

[January 24, 1939, Delivered at the Opening of the First Session in the Assembly Hall, Legislative Building, Manila]

Gentlemen of the National Assembly:

I take pleasure in congratulating you upon your election to this Second National Assembly, and to you, Mr. Speaker, I wish publicly to express my deep feeling of satisfaction that your distinguished colleagues have elevated you to this position of great responsibility and honor.

As we enter upon the second and last period of my administration, we should once more make public avowal of our objectives and of our firm determination to achieve them.

The Philippines is our country, and we shall make it the home of a free people—not alone politically, but economically as well. And this economic freedom must not be limited to the concept of national self-sufficiency, but must extend to every hamlet and hearth in this land. For of what practical value can the “right to life, liberty and the pursuit of happiness” be to a person, if he does not actually enjoy it and his only freedom consists in the freedom to starve or die?

This then is our ultimate goal: That the political rights vouchsafed to all our people by the Constitution be made real and effective by affording to every person willing to work the opportunity to earn a decent livelihood.

The First National Assembly laid the foundations for the attainment of this goal. It made an enviable record worthy of emulation. Only a visionary could claim that this task can reach fruition during the life of one administration or of even a generation. We have to rebuild our national structure on the solid and permanent foundation of social justice. Laws alone will not do it. We have to fight against prejudices, wrong notions, and outworn customs and traditions. We have to preach the fundamental principles of Christianity, and make them the underlying philosophy of our political and social institutions.

The great work initiated by the First National Assembly with such signal success we have to continue and carry forward. This is the mandate we have received from our people and which we dare not disobey.

No party has ever received such a vote of confidence as the Nationalist Party did at the last general election. Not a single candidate from the minority parties has been elected to this body. The faith and trust which our people have placed in our party in this extraordinary manner demands, in turn, from each of us extreme fidelity and devotion to duty. Not only must we steadfastly forge ahead with our determination to elevate to the topmost the moral, cultural, political, economic, and social conditions of our people, that they may be free from every sort of bondage, but our official acts and deeds should be such as to convince our people of the earnestness and honesty of our aims.

As the head of the State and the leader of our party, I venture to express the hope that the National Assembly will resist every temptation to divide itself into groups or blocs that may tend to weaken our unity of purpose and action. One of the dangers of such division lies in the possibility that the general interests of the nation may be overlooked, at least temporarily, and sacrificed for the benefit of the particular interests represented in the group or bloc. Obviously, one of the reasons why our people did not elect to the Assembly members representing the opposition is because they realize the importance of avoiding waste of time in political bickering in the proceedings of this body in these anxious days when every single energy we can command should be devoted to the difficult task of preparing our nation for an independent existence in an international situation so fraught with danger. Moreover, organized groups or blocs within a party are inconsistent with party responsibility and majority rule.

Gentlemen of the National Assembly, with your permission, I shall now proceed to give you a report on the state of the nation and to submit my recommendations regarding measures of first importance which I consider deserving of your prompt attention. From time to time, I shall take the liberty of sending to this body other messages concerning matters which, in my opinion, should be acted upon at this session.

During the past year the country enjoyed peace and order. There have been conflicts between capital and labor, but without serious consequences. Both the Department of Labor and the Court of Industrial Relations are entitled to commendation for the happy solution of such conflicts. However, we would be closing our eyes to the realities of the situation were we to believe that labor in our country is satisfied with its lot. There is growing unrest and discontent, specially among the farm laborers, not due entirely to the activities of professional agitators and irresponsible so-called labor leaders. Our laborers cannot be easily led astray by agitators when they have no real grievances. The Government is deeply concerned with the well-being of our masses, and it will not cease in its efforts to better their condition until ample justice is secured to them.

New public schools and classes have been opened and the enrollment in the public schools last year was increased by over 243,000. Approximately 18,500 kilometers of roads were in existence at the end of the year, and new wharves and other port facilities have been constructed. Public hospitals have been increased or enlarged, and clinics and dispensaries have been established in many localities. We are making progress in providing the remotest sections of the country with the services of doctors, dentists and nurses, and it is my earnest hope that during the next three years every town will be provided with these services. Sanitary conditions have been improved. We have not had any serious outbreak of epidemics and every threat or danger was effectively checked. An important housing project has been started in the vicinity of Manila to permit wage-earners and low-salaried employees to acquire or build their own homes. Should this project be successful, as I hope it will be, similar projects will be initiated in other communities.

Generally speaking, our national defense program has been carried out as planned, both as to cost and the number of men trained. Two full classes of trainees have now been processed through the instructional cadres and their organization into effective military unit’s proceeds apace. Acquisition of arms, equipment and supplies is in approximate step with the production of tactical units. The Air Corps is steadily evolving into an effective fighting unit, both as to personnel and to equipment.

Deserving of special mention is the Philippine Military Academy in Baguio and its progress toward the establishment of a training course calculated to produce a highly trained, loyal and efficient professional leadership for our Army.

One accomplishment of the year toward which effort had been long directed was the separation of the Constabulary from the Army. From the beginning it was realized that law enforcement is not properly a military responsibility. Yet the necessity for using the Constabulary, as it existed in 1935, as the nucleus out of which to establish the Army’s foundation, and the paucity of trained men for key positions had been the causes of the temporary consolidation heretofore existing. In the hope of avoiding wholesale transfers from the Army for police work, the establishment of a State Police from civilian sources was attempted in 1936. When the lack of trained personnel demonstrated that this method could succeed only if large numbers of officers and enlisted men were made available, it was decided, to avoid administrative complications, to separate from the Army the necessary individuals and organize them into a Constabulary. This has been done, and there is every reason to believe that the reconstituted organization will quickly earn a popular respect and prestige equal, and even superior, to the reputation in this regard enjoyed by the organization that existed prior to the establishment of the Commonwealth.

As a final word respecting the Army, I want to urge you, once again, to give to all matters concerning our future security the earnest consideration their fundamental importance deserves. If eternal vigilance is the price of freedom, let us then be ceaselessly vigilant. Our defensive system requires no unusual sacrifice by any individual, but its success depends primarily and almost exclusively upon a unification of the efforts of all toward this common and vital purpose. To attain such unification in a democracy, the military plan must be supported by popular intelligence, confidence, and enthusiasm. It is a special function of Government to see that this confidence is fairly earned and assiduously sustained. To this end let us see to it that every law we pass and every military measure we adopt shall reflect an unselfish and national purpose, that it shall impose injustice on none, and that it shall promote the security and defend the peace, the possessions and the liberty of all.

The business enterprises of the Government, especially the Philippine National Bank and the Cebu Portland Cement Company, were operated at a profit during the past year. The Manila Railroad Company has at long last completed its southern line. The gap which existed for many years between Tayabas and Camarines Sur was connected at a cost of about P2,000,000. This was one of my dreams that have come true. The significance of this achievement will be readily seen when we consider the fact that a daily, comfortable, fast and inexpensive communication service has been established between Manila and the Bicol provinces. At the same time the completion of this southern line means increased earnings for the railroad. The National Rice and Corn Corporation stabilized palay and rice prices at levels which, under the circumstances, properly safeguarded the interests of consumers and producers alike. The National Development Company is completing the construction of certain factories and studying the organization of others, in line with our policy to promote industrial development and provide more opportunities for the employment of labor. It is our policy with regard to many of these new industries merely to do pioneering work and ultimately to transfer them to private ownership and management.

Our foreign trade during 1938 suffered a slight reduction, mainly on account of low prices for our export products. It is to be noted, moreover, that our imports increased materially, while our exports decreased in value resulting in larger imports than exports decreased in value, resulting in larger imports than exports. This is an unhealthy condition for a country like the Philippines and every step should be taken to guard against the persistence of this adverse balance of trade. This situation may be due in part to increased purchasing power as a result of the expenditure by the Philippine Government of proceeds of the excise taxes on Philippine products collected in the United States. At the beginning, these remittances were made through the Dollar Exchange Standard Fund which resulted in an increase of circulation. In order to avoid this undesirable effect, the necessary measures have been adopted to effect the transfer of these funds through normal bank exchange transactions, without the necessity of releasing new currency by the National Treasury.

Tax receipts exceeded budget estimates during the last year. The income from taxation, however, for the year 1938 was P8,076,362.49 below the collections for the year 1937, exclusive of the proceeds of the excise taxes from the United States. This reduction in revenue may be attributed to three causes: (1) the low prices for our agricultural products both for domestic consumption and for export, (2) the stock market slump during the year 1938, and (3) the fact that in 1937 large amounts were collected for taxes due in preceding years. Despite the reduction in the public revenues the fiscal position of the Government remains sound and strong. As the budget which I shall present to the National Assembly will reveal, the expenditures of the Government during the year 1938 were well within the income for that year, with an excess in collections accruing to the general fund over the ordinary expenditures amounting to P12,410,420.21 at the close of the year.

The low prices for our export crops during the past year were a serious blow to a large portion of our population. This emphasizes the necessity that we should endeavor to establish our economy in an ever-growing proportion on the basis of our home market, because export crops must face conditions which are beyond the control of our Government.

As I have already reported to the last National Assembly, the President of the United States, in consultation with me, appointed the Joint Preparatory Committee on Philippine Affairs to study and make recommendations concerning future trade relations between the United States and the Philippines. The Committee has submitted its report and recommendations to the President of the United States and to the President of the Philippines. Copies of this report were furnished to the members of this body. The report will be officially transmitted to the Assembly tomorrow. I commend it to your careful and earnest consideration. President Roosevelt and I have both approved the report and recommendations of the said Committee and it is my understanding that the President will urge the Congress to enact appropriate legislation to carry into effect those recommendations. One of these recommendations is to do away with the restrictions on the expenditure of the proceeds of the excise tax on coconut oil, and another is to bind copra and abaca free of United States duty during the Commonwealth period. While it is not necessary for the National Assembly to pass any legislation effectuating such recommendations until the Congress of the United States has acted thereon, I earnestly recommend that you approve a resolution endorsing the recommendations of the report, so that the Congress of the United States may be informed that, if it should take favorable action on said recommendations, the National Assembly would do likewise. It is my hope that the Congress of the United States will approve legislation putting into effect the recommendations of the report at an early date, in order to place American-Philippine trade relations on a more fair and equitable basis, and to permit the Philippines properly and intelligently to plan its economic adjustment in preparation for independence.

In connection with this matter, I have sent as my special representative to Washington the Honorable Sergio Osmeña. Vice-President of the Philippines, to conduct, with the cooperation of the Resident Commissioner, the necessary negotiations with the Government of the United States. With the authority, they have enlisted the assistance of the Honorable Antonio de las Alas, formerly Secretary of Finance. I am in constant touch with the Vice-President who is keeping me advised of the progress of their work. So difficult and delicate a task could not have been entrusted to better hands.

Yielding to the wishes of the members of the last National Assembly and of the business community, I agreed to defer action upon my proposals for a tax revision and appointed a Tax Commission to study the matter. The Tax Commission has effected a revision of our internal taxation, taking into consideration the fiscal adequacy of our system of public revenue, a more fair and just allocation of the tax burden, and the need of insuring a more equitable and sound redistribution of wealth. I also instructed the Commission to revise the tax system of our local governments with a view to supplying them with definite sources of revenue and a sufficient income to meet their growing needs. The report of the Tax Commission will be transmitted to you at an early date and I trust that it will receive your favorable attention.

I also desire to submit to your consideration the enactment of necessary legislation for the settlement of sparsely populated regions of the Philippines, specially in Mindanao. This is important not only for obvious political reasons and as a means to promote economic development, but also to relieve the acute congestion of population existing in certain agrarian areas. The National Economic Council has recommended a carefully prepared plan to carry out this objective. The plan contemplates a ten-year program aiming at the settlement in these vacant areas of about 500,000 people on selected lands adapted to subsistence farming and the production of certain money crops. This project will require an estimated total outlay of P20,000,000 which may be appropriated from the proceeds of the excise taxes. The report and recommendations of the National Economic Council on this matter will be transmitted to the National Assembly within a few days.

Another problem which demands immediate attention concerns banking and credit, the cost of credit, and credit facilities for commerce, agriculture, and industry. The only institution in the Philippines that grants agricultural credit is the Philippine National Bank, but the limit fixed by law on the amount of the capital and resources of the Bank which may be invested in such credits has already been reached and the Bank is unable to give any more agricultural loans. Credit for capital investment is not available. There is practically no market for industrial bonds. Prevailing rates of interest charged by banks and private money lenders are still high, which fact is a drag upon economic enterprise and business prosperity. The National Economic Council is recommending a reform of our banking structure in order to remedy these evils. The Council proposes the creation of an investment bank for agriculture and industry, to which shall be transferred all the activities of the Philippine National Bank except those exclusively pertaining to commercial banking. The Council also recommends the establishment of a reserve and rediscount institution which will operate precisely in the same manner as the Federal Reserve System in the United States. This will provide a reasonable degree of elasticity and control over the money market and should immediately result in releasing for investment many millions of idle cash now prudently held by the banks as reserves in excess of legal requirements. These proposals will not only insure sufficient credit facilities at reasonable cost, but will, in my opinion, afford credit to small farmers, either directly or through cooperatives, and likewise to large industrial enterprises. Upon the approval of these measures, the Assembly may also consider the wisdom of amending the Usury Law by reducing the maximum rates of interest that can be charged. Considering the importance of credit as an aid to economic enterprise, I request that these proposals, which will be transmitted to you shortly, be given early consideration.

One of the most pressing needs of the Philippines is develop men with the necessary technological training to supply the needs of modern industry and agriculture. There is likewise great need for men who may assume positions of responsibility in the management of business and industry. I believe that the institution which should be principally expected to supply these men is the University of the Philippines. Hence, I have urged the authorities of the University to propose plans for a reorganization of that institution with a view to raising its standards and placing it on the same level with the best institutions of its kind in the world. Pursuant to my request, the Board of Regents has been studying a plan of reforms in that institution and has employed two of the most competent educators of the United States to act as its advisers in that important task. One of the recommendations of the Board of Regents has been studying a plan of reforms in that institution and has employed two of the most competent educators of the United States to act as its advisers in that important task. One of the recommendations of the Board of Regents is the transfer of the University of the Philippines to a new site. This is considered essential in order that University students may be brought under a more strict and wholesome supervision and control, and the proper spirit and atmosphere may be created on the University campus. Moreover, the physical plant of the University must be enlarged and improved, and suitable laboratories provided, if it is to be enabled to grant adequate professional training, specially in science, demanded by present-day progress. Besides being inconveniently located, the actual site of the University is too small to permit of these improvements. The transfer of the College of Medicine will require the construction of a modern hospital on the new site. At any rate, the Philippine General Hospital is no longer adequate to supply the needs of the growing population of Manila, particularly for free patients, and a new hospital is instantly necessary. This transfer of the University will require a considerable outlay, but I believe that the expenditure will be more than justified if we succeed in our efforts to capacitate that institution to supply the Commonwealth with properly trained professional men, business executives, economists, and scientists. Once reorganized and its standards raised, the University of the Philippines would set a mark for private universities to emulate. Fortunately, the present physical plant of the University will not be wasted. The Government is in dire need of buildings to house several offices and the present buildings of the University can be made adequate for that purpose. It would be highly desirable for the National Assembly to act upon the proposed transfer of the University of the Philippines at this session, so that the Government may consider the availability of the buildings of the University in framing its program of construction for government offices.

Heretofore, the municipal and city governments have had, by law, the responsibility of maintaining all elementary instruction. But in order that the purpose of the Constitution may be accomplished, it has been necessary for the National Government to assume the burden of supporting the primary schools, leaving to the local governments only the maintenance of intermediate instruction. As regards secondary instruction, I recommend that provincial governments be authorized to spend their funds only for vocational high schools and not for academic high schools, which, beginning with the school year 1940-1941, should be maintained on a self-supporting basis. Vocational high schools, however, should continue to receive adequate national aid.

To properly cope with the problem of public health and sanitation, I desire to recommend the establishment of a Department of Public Health. This is necessary for a more effective coordination of public health administration, the better to insure the protection and care of the health of our people, particularly those in early age. Furthermore, it is desirable that the Department of Public Instruction be placed in a position to devote itself exclusively to the far-reaching problems of education and to give greater impetus to the up building of the character and physique of our youth. The new Department of Public Health should be given administrative supervision over public sanitation, hospitals, asylums, clinics, dispensaries, and other institutions that minister to the health of the people.

In order to effect an orderly and scientific development of our agriculture and to permit the intelligent planning of agricultural production, it is essential that as soon as possible we undertake an agronomical survey of the Philippines. The Department of Agriculture and Commerce has completed the soil survey of several provinces. This work should be supplemented and accelerated. This agronomical survey has been recommended by the National Economic Council and the Joint Preparatory Committee on Philippine Affairs. I request that sufficient funds be appropriated to carry out this survey, which should indicate to the Government and to the people the crops adapted to different sections of the country.

Another recommendation of the Joint Preparatory Committee on Philippine Affairs is the establishment of agricultural experiment and extension stations. This is a project which should merit our immediate consideration, if we wish to stimulate agricultural enterprises and modernize agricultural methods. I recommend the repeal of the present law requiring a 5 per cent contribution by provinces and municipalities to the local agricultural fund. Better results could be obtained by a consolidation of these experiment and extension stations in typical areas than by dispersing them, as at present, and often duplicating the experiments, in each province. I recommend an appropriation from the proceeds of the excise taxes of a sufficient amount to cover the expenses for the establishment and operation of these situations in such localities as may be determined by the Department of Agriculture and Commerce. Another reason which induces me to make this recommendation is the fact that the finances of local governments are inadequate to support this service and that they cannot continue setting aside such a large portion of their revenues for these stations without jeopardizing other activities imperatively needed by local communities.

Modern industry and agriculture can not be efficiently operated without the aid of scientific research. This is particularly true in the Philippines where technological science of common knowledge is so far behind other countries. We have secured the advice of a renowned scientist to assist the Government in the establishment of an institution for scientific research. It should serve not only the Government but also private industry and agriculture. I shall submit to the National Assembly appropriate recommendations on this subject as soon as the studies of the National Economic Council and the Department of Agriculture and Commerce are completed.

The National Economic Council has recommended the establishment of an Institute of Nutrition. In order to protect the health and build up the physique of our masses such an institution is necessary. The people need to be educated on the nutritive value of different food products. There are many wholesome and nutritious articles that are consumed in some sections of the country which are unknown in others. It is also necessary t formulate dietary programs scientifically balanced which shall be within the reach of the people of the most modest means. Once the Institute completes its study of the different food products that could be produced abundantly and cheaply in the Philippines, the Department of Agriculture and Commerce could conduct a campaign for the production of national interests, has agreed with our Government that political refugees who desire to come to the Philippines shall not be given visas by American consuls without the previous approval of our Government. We owe it largely to His Excellency, the United States High Commissioner, that the State Department was fully appraised of the situation and that this administrative policy was adopted.

At the last session of the First National Assembly I had occasion to express publicly our indebtedness to High Commissioner McNutt for his unstinted cooperation with our Government. I reiterate those sentiments now. It is, therefore, with a sense of great loss for our people and for me that I have heard of his contemplated return to the United States. If he should find it necessary to resign his present post, we would be deprived of a true friend and a most able collaborator, one whom we need at this most critical period and who would be very hard to replace. But if he must leave us, we wish him to know that he takes with him our affection and gratitude, and our prayer that he may succeed in his future undertakings.

To protect the interests of our people and to repair an injustice done to certain races by existing legislation, we should enact a new immigration law. Under our present immigration law passed by the Congress of the United States, Chinese, Indians, and some other Orientals may not be admitted into the Philippines. Ours is an oriental country, and we are an oriental people. We belong to the same racial stock as some of those excluded by our laws. So long as other foreigners are allowed to immigrate to the Philippines, we should admit, under the same terms and conditions, those coming from oriental countries. To avoid, however, a large influx of immigrants from any one country, we should establish a quota that will be the same for all countries.

Gentlemen of the National Assembly, the world in which we live today is an entirely different world from that which we knew only a few years ago. Whereas before the World War, democracy was gaining ground everywhere, mankind is now divided into two great camps—those who believe in democracy and those who feel contempt for it as a completely discredited system of government. By our political education, by our convictions and by our inclinations, we are a democracy. We have established a democratic system of government and the perpetuation of this system will depend upon our ability to convince our people that democracy can be freed from those vices which have destroyed it in some countries, and that it can be made as efficient as any other system of government known to man. It behooves us; therefore, to prove that through a wise use of democratic processes, the welfare and the safety of the people can be promoted, thus contributing our share to the preservation of democracy in the world.

Manuel L. Quezon, 2nd SONA 1937

18 Oct

2nd State of the Nation Address of His Excellency
Manuel L. Quezon
President of the Philippines
to the First National Assembly
on Improvement of Philippine Conditions, Philippine Independence, amd Relations with American High Commissioner

[October 18, 1937, Delivered at the Opening of 2nd Session of the National Assembly, in the Assembly Hall, Legislative Building, Manila]

Mr. Speaker, Gentlemen of the National Assembly:

At no time in ancient or contemporary history has Almighty God showered His blessings upon our beloved country as generously as He has done during this year that is about to close. In a spirit of humility and thankfulness to Him, I come to report to you that the finances of the Government are sounder than they have ever been, that our foreign and internal trade has increased, that more school houses and roads have been built and opened to the people, that public health is in good condition, and that peace and order prevail in every province, city, municipality, and barrio of the Archipelago.

In this year too, as the highest representative of our people, I have taken a step that is of the greatest moment to the Fatherland. In my recent trip abroad I proposed to the President of the United States that he recommend to the Congress the granting of complete independence to the Philippines either on the 30th of December 1938, or the 4th of July, 1939.

I feel certain that in making this petition I have expressed the views of the immense majority of our people and that it is better for us to be independent now, that is to say, as soon as the necessary steps could be taken for the orderly process of erecting an independent Republic, rather than in 1946.

I can see no valid reason why, if the Philippines can be given independence in 1946, she may not have it in 1938 or 1939. In the short span of seven years the Filipino people can hardly do anything that would substantially change their present situation. Any obstacle which would vitally affect the chances of a successful and lasting independent nationhood in 1939 cannot be overcome by 1946.

So, if we want independence at any cost and are ready to take all the consequences –the dangers as well as the advantages of independent national existence- let us have it no later than 1939. If, however, we are fearful of the possible threats that complete independence may offer to our national security, and we would rather remain under the protecting wing of the United States, then let us leave the final determination of our future to come coming generations and not deceive ourselves with the groundless hope that by 1946 we shall have become politically and economically beyond any serious difficulty.

We cannot be hesitating indefinitely. The best interest, indeed the very life, of the nation is at stake. If it is our resolve to be an independent nation, this is the time, for every year lost is to our evident disadvantage.

Our duty –the duty of the Executive and Legislative branches of the government- is plain. Under the Independence Act and the Constitution, the Government of the Commonwealth has been established to prepare the country for complete independence. Our people alone, by their own choice and direction, can command us to take a different course.

Since the news of my proposal to have the transition period shortened was published, voices in opposition to it have been heard both in public and in private. Let me say in all earnestness to those Filipinos who believe in good faith that the security, liberty, prosperity, and peace of our common country lie in some kind of political partnership with the United States rather than in complete independence, that they should say so frankly and come out courageously in the open with an alternative plan, instead of merely adopting dilatory tactics in the belief that when the fourth of July, 1946, shall have arrived, some unforeseen event will prevent the establishment of the Philippine Republic. They have nothing to fear: there is here freedom of thought and of speech, and one may be as much a patriot advocating some other political status for the Philippines as favoring complete independence so long as in advocating he is inspired not by selfish motives but by what he honestly believes is for the commonweal. As long as the essentials of freedom are not sacrificed –and they must not be sacrified under any consideration- the formula for securing and enjoying it may well be debated upon.

It is true that from the point of view of a foreigner who does not intend to remain in the Philippines after independence shall have been granted and who is contemplating to liquidate his interests in this country, the remaining seven years may, perhaps, give him the opportunity to withdraw his investments. But, is this a sufficient reason to postpone the grant of independence if, on the other hand, it would be to the best permanent interests of the Filipino people to accelerate its grant? Is the future well-being of a whole nation to be sacrificed for the benefit of a few foreigners? Do these foreigners have any right to a special consideration?

From the very first day of America’s occupation of the Philippines, she disclaimed any intention to permanently hold these Islands. Neither did she, in thus announcing to the whole world her intentions, ever give any promise either directly or by implication that she would not withdraw her sovereignty from her newly-occupied territory at a moment’s notice. Therefore, foreigners who had investments in the Philippines when the United States took possession of the Islands, as well as those who came thereafter, knew full well that they were not placing themselves under the protection of the American flag except for as long a time only, and no longer, as the Government of the United States decided to retain the Philippines.

With more reason should these foreigners have known that the days of American sovereignty were numbered when, in 1916, the Jones Law was enacted, for it was solemnly and clearly declared in that law that the Philippines would be granted her independence as soon as a stable government could be established in this country. Since the question of the stability of a government is a matter of opinion, and in the case of the Government of the Philippines, the Congress alone has the right to determine the question, that pronouncement in the Jones Law was tantamount to a formal notice to all concerned that the United States might, at any time, leave the Islands to their own fate.

It is true that when the Independence Act was approved by the Congress in 1934, it was specifically provided therein that complete independence would be granted ten years following the inauguration of the Government of the Commonwealth; but the reports of the respective Committees and the speeches delivered upon the floor of both Houses of the Congress clearly show this was not a commitment addressed to foreigners having investments in the Philippines, but only to the Filipino people who, in the opinion of the Congress, might be seriously injured economically if their trade relations with the United States were abruptly terminated. If the Filipino people themselves are willing to have the date for the granting of independence advanced, there is nothing, expressed or implied, in the Independence Law that denies them the right to ask the Congress to shorten the transition period.

My main reason for asking that the independence of the Philippines be granted not later than the 4th of July, 1939, is that I am sincerely of the opinion that it will be to our best interests to secure independence during and under the administration of President Roosevelt. I know the President, his progressive and liberal ideas, his very deep sense of justice, and his friendship for and good will towards the Filipino people. I have no doubt that under his leadership we will receive from the Government of the United States the fairest treatment that we may ever expect to receive under the leadership of his successors. And if the Philippines were to become independent not later than the fourth of July, 1939, President Roosevelt would still have more than one full year to extend his helping hand to the new Philippine Republic in the early stages of its dealings as an independent nation both with the United States and the rest of the world. We could, indeed, find no better sponsor than President Roosevelt to usher the Philippines into the family of free nations.

Moreover, the experience of the last two years has shown that, although the avowed purpose of the ten-year transition period is to stabilize the trade relations between the United States and the Philippines, as provided in the Independence Act, so as to give the Filipino people a basis for making readjustments in their national economy preparatory to the change that complete independence would bring with it, there were tendencies in Congress to disregard the terms and conditions governing said trade relations even against the will of the Filipino people.

In proposing to President Roosevelt that he recommend to the Congress the shortening of the period for the grant of independence, I also asked that the present trade relations between the United States and the Philippines be continued for at least ten years after independence. If this were done and made a part of a treaty between the Government of the United States and the Philippine Republic the trade relations between the two countries would have been placed on a stable basis during the life of the treaty.

I know that there are people who believe that these trade relations only benefit the Philippines at the expense of the American people. As far as I am concerned, I would never ask from the United States anything that we could not reciprocate in kind. If U advocate the temporary continuance of the present trade relations between America and the Philippines it is because I am convinced that these trade relations are mutually beneficial to both countries.

There is another vital reason why the date for the granting of independence should be advanced. The present political set-up is untenable in that while America retains her sovereign authority over the Philippines, she, at the same time, has placed in the hands of the Filipino people the responsibility for laying down the foundations and erecting the structure of the Philippine Republic. The continuation of her sovereignty over the Philippines imposes upon America obligations she cannot shirk, and, correspondingly, it gives her rights that are incompatible with the free exercise of our judgment as to the best means that we should adopt to prepare ourselves for an independent national existence. Conflicts of views, and perhaps of interests, may arise during the coming next eight years that may create misunderstanding and ill-feelings between the American and Filipino peoples and mar the unprecedented record of perfect cooperation and goodwill between two dissimilar races which Fate has thrown together temporarily. As long as America was the sovereign authority and reserved for herself and exercised full power over, and assumed exclusive responsibility for, the Government of the Philippines, there was no occasion for conflict. Her word was then final in all matters of public policy, and our duty was merely to cooperate with her, as we did cooperate under her authority and direction.

Upon the establishment of the Government of the Commonwealth, however, the situation has changed materially. By an Act of Congress, we were given power to create our own government, controlled and managed by us, under a Constitution of our own making. It was the plain purpose of the Congressional enactment that the Filipino people, who were to become automatically independent in 1946, would, during the Commonwealth period, take such steps, as in their opinion would best ensure the stability and success of the Philippine Republic. Yet, the powers granted to the Government of the Commonwealth in the most important and essential functions of government, such as those affecting trarrif, currency, finance, immigration, or those which in any way might involve the international obligations of the United States, etc., were subject to the ultimate approval of, or revocation by, the President of the United States.

It must be recognized, on the one hand, that America cannot, in fairness to herself, concede more governmental powers to the Commonwealth than she has granted without endangering her own interest and peace, nor on the other hand, can the Filipino people assume responsibility for their due preparation for independence with only such limited powers as have been vested in the Commonwealth Government. In this predicament, it were better for America and the Philippines to be independent of each other so that each may be free to act in the furtherance of her own national objectives and interests.

We have been fortunate indeed that so far the representatives of the President of the United States in the Philippines have been men of the highest character and integrity, of broad statesmanship, and of a clear vision of the task entrusted to them. You all know former High Commissioner Frank Murphy. His relations with us, not only as High Commissioner but also as Governor-General, have been very close and most cordial. In both capacities he has rendered permanent service to our people. In my last trip to America he has proven to me that his interest in our liberty and well-being is abiding.

The present United States High Commissioner has been but a few months in our midst. Some of his early acts were misrepresented or misunderstood. For a time there were some misgivings on the part of our people as to his attitude towards them and this Government. But nothing can dispel misunderstandings quicker than personal contact.

It is my pleasure and my duty to report to you –and what I am going to say is no mere gesture of official courtesy, but an honest and straight talk- that I could wish for no better United States High Commissioner in the Philippines than His Excellency, Paul V. McNutt. He measures up to his exalted position, both as an official and as a man. Indeed, it is a very difficult choice to make between Mr. McNutt, the man, and His Excellency, the High Commissioner.

Since my return, we have had some difficult problems to settle and I had occasion to appraise the true measure of him who now represents the President of the United States in the Philippines. He deserves our respect and affection. The best spirit of mutual cooperation characterizes our official association, and we have also become good friends. I feel confident that in serving his government and his country, High Commissioner McNutt will be of invaluable help to the Filipino people.

Happy and fruitful as our association with the American High Commissioner has been, I must state in all candor that these two short years of the life of the Commonwealth have already revealed some signs of the possibility of a serious conflict between the High Commissioner and the President of the Philippines in the performance of their respective duties even if each were desirous of avoiding such conflict. Perhaps there will always be found a way to arrive at some reasonable compromise as long as President Roosevelt is at the head of the American Government, and if his representative in our country were of the caliber of the two High Commissioners we have had until now; especially if the President of the Philippines understood American psychology and realized America’s difficult situation during this twilight period of our nationhood. But who can foretell what will happen if another President should be in the White House, or a less sympathetic man should represent the President of the United States in the Philippines, or a Filipino President should be one entirely foreign to American ways or one-sided in his views of American-Filipino relations? The only sure remedy to this dangerous situation is to terminate it with the least possible delay.

No better evidence could have been given by President Roosevelt of his deep concern for the future welfare of our people than by the appointment of the Joint Preparatory Committee which is now sitting in conference in our country.

The following statement given out jointly by Mr. Sayre, Assistant Secretary of State, as Chairman of the Inter-Departmental Committee on Philippine Affairs, and myself on March 18, 1937, gives a complete idea of the reason for, and the object of, the creation of this Committee:

“Arrangements are being made for the appointment shortly of a joint preparatory committee of American and Philippine experts. The committee is to study trade relations between the United States and the Philippines and to recommend a program for the adjustment of Philippine national economy. This announcement followed conferences between President Quezon of the Philippine Commonwealth and the Inter-Departmental Committee on Philippine Affairs, which is acting on behalf of President Roosevelt in the preliminary discussions. Assistant Secretary of State Francis B. Sayre is Chairman of this Committee.

“Inasmuch as the Independence Act provides that complete political independence of the Philippines shall become effective on July 4, 1946, and inasmuch as President Quezon has suggested that the date of independence might be advanced to 1938 or 1939, it was agreed that the joint committee of experts would be expected in making its recommendations to consider the bearing which an advancement in the date of independence would have on facilitating or retarding the execution of a program of economic adjustment in the Philippines. It was further agreed that the preferential trade relations between the United States and the Philippines are to be terminated at the earliest practicable date consistent with affording the Philippines a reasonable opportunity to adjust their national economy. Thereafter, it is contemplated that trade relations between the two countries will be regulated in accordance with a reciprocal trade agreement on a non-preferential basis.”

The members of the Joint Committee appointed by the Inter-Departmental Committee with the approval of President Roosevelt and by me are the following:

His Excellency, the United States Ambassador to Turkey, Hon. John Van A. MacMurray, Chairman of the Committee.

American Group Philippine Group
Joseph E. Jacobs Vice Chairman of the Committee and Chairman of the American Group.

Mr. Jacobs is Chief of the Office of Philippine Affairs, Department of State.

Jose Yulo Vice Chairman of the Committee and Chairman of the Philippine Group.

Mr. Yulo is Secretary of Justice of the Philippine Commonwealth.

Louis Domeratzky Chief, Division of Regional Information, Bureau of Foreign and Domestic Commerce, Department of Commerce. Conrado Benitez Dean, College of Business Administration, University of the Philippines.
Lynn R. Edminster Chief Economic Analyst, Division of Trade Agreements, Department of State. Joaquin M. Elizalde Member of the National Economic Council.
Col. Donald C. McDonald Assistant to the Chief, Bureau of Insular Affairs, War Department. Quintin Paredes Resident Commissioner for the Philippines.
Carl Robbins Chief, Sugar Section, Agricultural Adjustment Administration, Department of Agriculture. Jose E. Romero Floor Leader, Majority Party in the National Assembly.
Frank A. Waring Senior Economist, United States Tariff Commission. Manuel Roxas Floor Leader, Minority Party in the National Assembly.

Ben Dorfman of the United States Tariff Commission and Benito Razon, Economic Adviser to the President, were later on appointed to the Committee as alternates.

This Committee held hearings in Washington, San Francisco, and Manila; and it also visited most of the provinces of the Philippines to secure first-hand information that would be valuable to the members of the Committee in making their report and final recommendation on the task entrusted to them.

After this Committee shall have submitted its report, it is my purpose to reiterate my petition that the granting of complete independence to the Philippines be advanced either to the 30th of December, 1938, or to the 4th of July, 1939, unless the National Assembly, during its present session, should express a contrary opinion.

Social Justice

Let me now turn your attention to our most immediate economic and social problems. The Philippines has undoubtedly made great strides both in the field of politics and of economics during the last three decades. Politically, we have reached the point where we are –having an almost entirely autonomous government and the assurance of complete independence. Economically, we have become an important factor in American commerce; our foreign and domestic trade has multiplied –in a word, the national wealth has greatly increased. We have accomplished, too, considerable progress in sanitation, in education, in the construction of roads and all kinds of communications, and we have acquired the modern conveniences of life. But the main beneficiaries of this most remarkable progress are the rich and the middle class. The rich can live in extravagant luxury. Some of their offspring grow up in an atmosphere of ease, with an outlook on life which gives paramount important to society affairs, vanities, trivialities and material possessions, devoid of discipline, love for work or human sympathy. The middle class have attained a higher standard of living as compared with that prevailing during the Spanish regime. The comforts of present-day civilization are within their reach and they are enjoying them. Their sons and daughters are better-fed, better clothed, better educated –thousands upon thousands of them are now receiving the benefits of higher instruction.

Sad to tell, but it is none the less true, the same cannot be said of our laboring population. The men and women who till the soil or work in the factories are hardly better off now than they were during the Spanish regime. Of course, wages are higher than in any other Oriental country, with the possible exception of Japan. But it should be remembered that money could buy more in those Spanish days than it can now; and furthermore in the relationship between employer and employee in the days of old there was a consideration of higher value to the employee than the monetary compensation itself. Of yore employers and employees lived in personal contact and association resembling that which exists amongst members of the same family so that ties of affection bound them together much more than material considerations. Now this no longer obtains for their relationship is almost as impersonal and detached as that existing between employers and employees in highly industrialized countries. Again, our ancestors, because of their greater ignorance, knew no better and were resigned to their hard life, believing that it was a part of the world order as decreed by Divine Will, so that the unfortunate sufferer may meet with a greater reward in Heaven.

Now the Filipino workingman, however illiterate, refuses to believe that the Creator of the Universe could have ordained that some of His creatures should live in luxury and plenty, while others, in destitution and misery. The Filipino laborer now knows that the Father of mankind loves him as much as every other human being, and, therefore, that the world has not been made for the benefit of a few, but for the happiness of all.

Still more: The Filipino workingman has heard, if he is not able to read, of the equality before the law of the poor and the rich. He has heard of democracy, liberty, and justice, since every candidate for an elective office discourses on these topics, painting to him in glowing terms the meaning of these words.

And yet, what does he actually see? How do these doctrines that he has heard propounded from the platforms affect his everyday life? His hopes have been raised, his vision has been broadened, and his outlook has been painted in bright colors. But thirty-five years of American regime has brought him only disappointments and, sometimes, despair.

Has the progress then made by the Philippines benefited our poorer population? Rhe poor still has to drink the same polluted water that his ancestors drank for ages. Malaria, dysentery, and tuberculosis still threaten him and his family at every turn. His children cannot all go to school, or if they do, they cannot even finish the whole primary instruction for one reason or another.

Roads from his barrio or his little farm to the town there are none. Only trails are within his reach –trails that have been formed by the daily pressure of his bare feet and not because they have been constructed. As he works from sunrise to sundown, his employer gets richer while he remains poor. He is the easy prey of the heartless usurer because usury is still rampant everywhere despite legislative enactments intended to suppress it.

That is, concisely speaking, the lot of the common man in our midst, after America’s long endeavor to give to all fair opportunity in the pursuit of happiness and the enjoyment of life.

It was, of course, impossible for American administrators to see and reach the lowest strata of our population. But now that the reins of government are in our hands in so far as our own domestic affairs are concerned, what excuse, what reasonable justification can there be in allowing such a social and economic order to continue?

It is high time that all the branches of this Government cooperate with one another, and with them the whole community and every good-hearted man and woman, so that at last in this dear land of ours social justice –real justice- in the relations of man to man, may reign supreme.

Our people are patient and law-abiding. They love peace. They have not lost their faith either in the executive, the legislative, or the judicial branch of the Government. As the Government is now in the hands of their own countrymen, they have become hopeful and are placing the realization of their dream for a better day in our clearer understanding of their lot, our better knowledge of conditions prevailing in the country, and in what should be the natural craving of our hearts to serve them with all the power at our command –they who are flesh of our flesh and blood of our blood.

The promotion of social justice by the State is a clear and categorical mandate of our Constitution. Our platform, the platform upon which you and I have been elected, imposes upon us the high duty of enacting measures that will improve the living conditions of the laborer and of carrying these measures into effect. We must see that laws are enacted which will not permit the exploitation of the employee by his employer and which will leave no loopholes that may be used to defeat the ends of justice. We must rely for the security of this new nation, not so much upon the might of brute force, but upon the undivided loyalty of every citizen to the Government –a loyalty founded upon individual consciousness that this Government is his, and that it exists only for his protection, for his liberty, and for his happiness.

Both the Department of Justice and the Department of Labor are ready to help you in the preparation of the measures that are required to fill the gap that may be found in our existing legislation, for the purpose of correcting prevailing social evils and of carrying into effect the provisions of the Constitution as well as the commitments in our platform.

The Proceeds of the Excise Tax on Oil

Fortunately for us a new source of income has come to our hands that will facilitate the carrying out of our program of social justice and economic readjustment. From the proceeds of the excise tax on oil there has been accumulated up to the end of June, 1937, the sum of P96,507,227.30 in the Federal Treasury, the transfer of which amount to the Treasury of the Philippines I had secured before I left America on my last trip. This sum is now available for appropriation, the understanding with the Treasury Department of the United States being that out of that fund, P10,000,000 will be available upon thirty days’ notice and the balance upon ninety days’ notice.

The final decision as to how this fund shall be spent is, of course, yours. But in the exercise of my constitutional prerogative I shall take the liberty of making some suggestions regarding the purposes for which this money should be spent.

The first thing that we must bear in mind is that this fund does not constitute an ordinary income of the Government upon which we may depend for recurring obligations. When independence shall have been granted, this source of our income will cease. Were we to defray from this fund services that we cannot maintain once this income is terminated, we would have thrown away the money thus spent. We must, therefore, limit the use of this fund for national objectives, for purposes where the greater good may be derived by the Filipino people.

Concretely, I recommend that this fund be devoted to the following purposes:

1.   To improve sanitary conditions of centers of population by constructing water systems or artesian wells.

2.   For combating malaria where there is assurance that it can be done at a reasonable expense.

3.   For the prevention of tuberculosis and the establishment of more sanitoriums, as it is well known that the white plague is the worst scourge afflicting our race.

4.   For the building of new leprosariums which will permit lepers in the early stage of the disease to be treated where they may be easily reached by their families, thus making their isolation less tragic.

5.   For extending free dispensary service to the poor not only in centers of population but also in outlying barrios and communities.

6.   For building public schools in every barrio where there is a sufficient number of children justifying the opening of the school.

In this connection, I desire to state that it was with great reluctance that I vetoed the bill passed in your last sessions appropriating funds for school buildings. A subcommittee of the Committee on Public Instruction came to see me to secure my approval to a measure that would appropriate P5,000,000 for school buildings even before approving the regular budget of the Government. The Department of Public Instruction is now ready to furnish you with all the necessary information.

The Constitution imposes upon the Government of the Philippines the duty to give every boy and girl of school age the opportunity to receive primary instruction. As soon as there are sufficient school buildings to accommodate all the school-age population of the Philippines and permanent means for supporting the schools have been created, there should be implanted here, in my opinion, compulsory universal primary instruction. In the meantime we should make it compulsory for every boy and girl who is now in our public schools, and those who may be admitted next year and thereafter to remain in school during the period required for the entire primary instruction. Means should be immediately provided to carry this policy into effect.

One of the discoveries which we have made since the establishment of the Government of the Commonwealth is that, despite the large number of children that have gone through our public schools, as shown in the reports of the Bureau of Education, the literacy of the Islands has not increased proportionally, and the knowledge of those rudimentary subjects which the citizen of a democracy should have, has not been acquired by a population corresponding to the number of children that appear to have entered the public schools. The reason for this is simple. A large proprtion of the boys and girls who have been admitted to the schools have not remained long enough to acquire any kind of useful knowledge.

7.   For opening national highways and helping in the construction of provincial and even barrio roads whenever the respective provinces and municipalities pledge themselves to maintain the roads thus constructed, and in the case of barrio roads, where the volume of traffic on said roads also justifies their construction.

8.   For the construction of office buildings for the National Government so as to reduce, if not eliminate, the continuous expense in rents.

9.   For the purchase of large landed estates and their resale in small lots to the actual occupants thereof.

We are committed to the policy of acquiring the haciendas which, in the opinion of the Government, should be subdivided in small lots and resold to the tenants actually working on said lots. In a message to the National Assembly in its first regular session, I stated that we were not in a position to redeem this pledge, not only because we had no funds with which to purchase these estates, but also because I feared that we would only be transferring the trouble faced by the owners of these estates to the Government itself. Since then we have come into this fund accruing to the Commonwealth from the processing tax on oil, and I deem it proper and wise to use a part of it for the acquisition of these haciendas. In order that the Government may accomplish its objective more completely this time than when it brought the Friar lands, I have appointed a committee to study the whole question in its varied aspects with instructions to submit it recommendations not later than November 15, 1937. As soon as the committee submits its report, I shall refer the same to the National Assembly for such action as you may deem proper and expedient in the light of the recommendations therein contained.

10.                For the development of water power, the reforestation of denuded areas, the colonization and development of Mindanao; and

11.                For the financing of a long range program of economic adjustments necessary to prepare the country for the new situation attending the grant of our independence, including the establishment of new industries which at the same time will give work to the unemployed.

It is expected that the Joint Preparatory Committee on Philippine Affairs will include in its report a well considered program of economic adjustments to supplement its recommendation on future American-Philippine trade relations. As soon as this report has been received by me it will be immediately submitted to you for your consideration.

Gentlemen of the National Assembly, before closing, allow me to emphasize the need to of giving the common man in the Philippines the benefits that the citizenry of every progressive democracy is entitled to receive. I am sure that every one of you will give to this noble task the best that is in him. An opportunity has been offered us that no past or coming generation has had or will ever have –that of creating a nation where there will be no privileged class, where poverty will be unknown, where every citizen will be duly equipped with the knowledge that will enable him to perform his duties and to exercise his rights properly and conscientiously, and where every man, woman, and child his fireside will be thankful to God for living in this beautiful and blessed land.

Manuel L. Quezon, 1st SONA 1936

18 Oct

State of the Nation Address of His Excellency
Manuel L. Quezon
President of the Philippines
to the First National Assembly
on the Country’s Condition and Problems

[June 16, 1936, Delivered at the Opening of First Session in the Assembly Hall, Legislative Building, Manila]

Mr. Speaker, Gentlemen of the National Assembly:

Seven months ago this Commonwealth was inaugurated amidst the general rejoicing of our people, and with misgivings on the part of some timorous individuals. Today the Government of the Commonwealth counts with the confidence and respect of all. True, there are still a few prophets of disaster, but these need not seriously disturb us, for it is evident that it is only their wish that is father to their forebodings.

Our Relations with America

Under the provisions of the Independence Act incorporated into our Constitution, the Government of the United States retains direct control and supervision over our foreign affairs, as well as certain specific powers in a few cases of domestic character. These powers are vested in the President of the United States whose representative in the Islands is the United States High Commissioner. My personal and official relations with High Commissioner Frank Murphy have been most cordial, and the highest spirit of cooperation has characterized the transactions of our Government with the Washington Administration.

It was with a deep sense of loss that our people saw High Commissioner Murphy depart for the United States and it is their hope that he will soon return to the Philippines.

The Gold Reserve Funds and the Excise Tax on Oil

It is with regret that I have to inform you that the Senate of the United States has passed a bill repealing the Act recognizing the equity of the Philippine Government on the sum of P47,000,000 arising from the devaluation of the dollar as a reimbursement for the depreciation of our reserves deposited in the United States. Were this bill to pass Congress, our Government would be made to incur a loss or that American officials have done contrary to the recommendation of Filipino representatives. I have not, however, given up the hope that the House of Representatives will not follow the action of the Senate, for I cannot conceive that America, which in this case acted as the guardian of Filipino interests, should want to profit from the losses of her ward. I know that High Commissioner Murphy has done and is doing everything he can to secure this fund for the Philippines.

Again there are attempts to enact legislation reverting to the Treasury of the United States the proceeds of the excise tax on coconut oil imported from the Philippines. The amount of collections is now around P56,000,000 and is deposited in the United States Treasury. Payment to the Government of the Philippines in accordance with the law has been suspended in view of cases pending in the courts contesting the validity of the law. It is my earnest belief that Congress will not approve the proposed legislation above referred to. Heretofore, whenever the Congress of the United States has taxed goods or products imported into the United States from the Philippines, invariably it has provided the payment of all collections to our Government. It is, therefore, beyond my comprehension that at this stage of our relations with America that record of fair dealing and justice should be reversed. We are also counting upon the help of Commissioner Murphy and other friends in Congress to prevent the enactment of the said law.

Our Foreign Population

I am happy to be able to inform the Assembly that the foreign population of the Islands has, since the inauguration of the Commonwealth, shown a genuine desire to cooperate with our people to make this government a signal success.

Much has been printed in the local and foreign papers regarding the ownership of large tracts of land by Japanese subjects in Davao. There is an impression that Davao is actually owned by the Japanese. Such is not the case.

The total area owned, leased and/or cultivated by the Japanese in Davao is about 60,000 hectares out of almost two million hectares that constitute the total area of the public domain in that province. It is true that Japanese investments in Davao are considerable, and that there are doubts expressed as to the legality of some of the transactions entered into between Filipinos and Japanese regarding the public domain leased to Filipinos by the Government. In these cases the Government will act in accordance with law and equity. Before any course of action is finally decided upon by the Administration, I shall advise with the Assembly and take no step without your previous knowledge. There is nothing in the so-called Davao problem that should cause serious concern.

Peace and Order

The country has never been entirely free from armed bandits or outlaws as it has been during the last four months. At the beginning of the present administration there were two armed bands which had been marauding in the Provinces of Laguna and Tayabas for some time, and there was at large one notorious bandit in the Province of Lanao who for many years had been terrorizing that district with murders and robberies. Two hours after my inauguration as Chief Executive I had a conference with the governors of Laguna and Tayabas and the Chief of Constabulary, and I instructed them to spare no effort in the capture or extermination of these outlaws. Soon thereafter the Lanao bandit having resisted arrest was killed by the Constabulary and within two months every members of the armed bands in Laguna and Tayabas had been either captured or killed. However, there is still the danger of possible sporadic public disturbances like the uprising of the Sakdalistas which took place a year ago last May. Professional demagogues who make their living by exploiting the patriotism of the uninformed or the real or fancied grievances of the discontented, are exciting the masses with incendiary speeches and literature. Communism has also been active during the last few years and while its propaganda has not been particularly effective the forces of law and order have to be constantly on guard. There is not, of course, the slightest danger of any general uprising, but we cannot allow any serious disturbance of the public order to take place. One of the few cases which may give occasion for American intervention is the failure of the Government to preserve order and to protect life, property, and individual liberty. The world is watching this experiment in Filipino self-government, and the confidence and respect which in the future the nations may have in the Philippine Republic will depend in large measure upon our ability to maintain peace and order and to extend effective protection to all the residents of the Islands during the transition period. Knowing as I do the great superiority of the forces of the Government over any misguided group that may be induced to armed revolt, it causes me anguish to think that under my administration the armed forces of the government may be compelled to take such drastic measure as would exact a greater toll of life than during the Sakdalista uprising. From every point of view, therefore, it is better that preventive measures be taken, and it is my earnest hope that the National Assembly will not delay the enactment of appropriate legislation to this end.

Social Justice

While the Government cannot compromise with public disorder, it is equally its duty to right social injustices. That our laborers in the farm as well as in the factories still suffer from long-standing unfair practices, no one can successfully deny. These injustices, however, cannot be remedied by merely applying here legislation in force in other countries. For such legislation would not take into account local conditions, nor the incipient stage of our industrial life and the almost primitive state of our agriculture. Government administration is a practical question and statesmanship consists in the wise application of sound doctrines bearing in mind the actual conditions that have to be met with in each case. Even the most up-to-date progressive labor legislation, if not in keeping with the prevailing conditions here, may easily upset our existing industries, preventing the establishment of new ones, and retard the advance of our agriculture. I, therefore, advocate a policy of progressive conservatism based upon the recognition of the essential and fundamental rights of labor.

The Philippine Legislature has in the past enacted several measures for the protection of labor, but while they have improved somewhat the lot of the workingman to the extent that the Filipino laborer enjoys more rights and privileges than his brother in other Oriental countries, it is necessary that we should go further and give better and more effective protection to the rights and interests of our wage-earners. I would, therefore, urge the enactment of a law authorizing the creation of boards of arbitration to settle questions of labor, minimum wages, working conditions, and other matters affecting their relations.

With the passage of the Tenancy Law, it was believed that the relationship between the landowner and tenant could be maintained on a fair and satisfactory basis. Although the legislation has been in the statute book for several years, I do not know of a single locality which has put it into effect, as its enforcement in any province was made dependent on an affirmative resolution of the majority of the municipal councils of that province. There is now more discontent and social unrest among the farm laborers than among the industrial workers. I believe this situation will be materially improved by the enactment of the Arbitration Board Law to which I have referred.

The large landed estates or “haciendas” offer a different problem. This administration, by the Coalition platform, is committed to the policy favoring the acquisition of these estates at a fair and just price, so they may be sold in small lots to the tenants. I regret to state that after a careful study of this question, I have reached the conclusion that such a step would not remedy the situation nor could it be carried out without exposing the country to great financial losses.

Immediately after assuming office, I instructed the Department of Labor and the Department of Agriculture and Commerce to give me the necessary information so that I might recommend to the National Assembly at this regular session the purchase of these landed estates or “haciendas” and their subsequent sale to the tenants. Both Secretaries of said Departments have personally investigated some of the outstanding controversies between some of the “haciendas” and their tenants, and I have also taken part in one of those investigations. I have likewise studied the effects of the purchase of the so-called friar lands.

It is now my earnest conviction that the purchase of these “haciendas” by the Government will not solve the agrarian and social problems existing therein, but will only transfer to the Government the difficulties which the tenants now have with the present landowners.

The friar lands were acquired by the Government for the purpose of reselling them in small parcels to the men who were working on these lands; but, for several causes, the result has been that a large area of these “haciendas” is now in the hands of other people. The lot of the former tillers of these lands has not in the least improved. The investment, therefore, of several millions of pesos by the Government in the purchase of the friar lands has only been, with few exceptions, for the benefit of people not contemplated by the Government. The latest report I have is that in this transaction the Government lost heavily. If the Philippine Government lost then when the price paid for the friar lands was relatively low, it is evident that now, that the price asked for these “haciendas” is very much higher, the Government is bound to suffer a greater loss. There might be some justification in exposing the country to this financial loss if, through such purchase, the majority of the people working on them were to become the owners of the land which they are now cultivating. I am positive, however, that such will not be the case, any more than it was in the case of the friar lands, and I, for one, despite the commitment in the Coalition platform, do not wish to impose upon our people the burden of a national debt which our children will have to bear merely to give a few individuals the opportunity to acquire these particular areas at the expense of the people when there is so much available fertile and untouched public land in many regions of our country, particularly in Mindanao.

I realize the difficulty of convincing the men and their families who are now living in these “haciendas” to move out from their places of birth in order to settle in other provinces or islands, knowing as I do the attachment of the Filipino to his hometown. We must encourage our people to have a national outlook so that they may feel at home in whatever corner of the Philippines they may find themselves. We thus have an opportunity to induce the settlement of our sparsely populated areas by the tenants of these “haciendas,” and the money that the Government would surely lose with their purchase could be invested to better advantage in the construction of roads and improvement of health conditions in said uninhabited but rich sections of the Philippines.

In the meantime, I recommend the adoption of measures similar to those which were adopted in Ireland to solve agrarian problems there which have been existing from time immemorial. I also recommend the immediate passage of a law authorizing the expropriation of those portions of the large “haciendas” which are urban in character and are occupied by the houses of the tenants. With the opportunity to own their own homes thus assured, the settlement of the present difficulties of the tenants relative to their farm lands might no longer be of urgent necessity.

Previous Legislative Enactments

In your inaugural session, which lasted barely thirty days, you enacted the most important legislation pledged in the Coalition platform and urgently required by the nature of the new responsibilities of the present government. The record you have made has earned for you just commendation and constitutes the main reason for the prevailing confidence in our future. I now beg leave to report what has been done by Executive in compliance with your legislative enactments.

National Defense –Conscious of the fact that the prime duty of every government is to provide for national defense, the first measure you have enacted is the “National Defense Act” (Commonwealth Act No. 1).

This Act provides for the reorganization of a defensive system composed of the Regular Force and a trained citizen army, and contemplates a yearly appropriation of P16,000,000 for ten years, at the end of which the nation will be placed in a position of serene dignity amongst the powers of the world.

A comprehensive report of the steps taken in pursuance of the provisions of the National Defense Act has been submitted to be by the Military Adviser and it will be my pleasure to transmit it to you in a separate message. Suffice it for me to say now that the response of the country to the call of the Assembly has exceeded our fondest expectations. The number of Filipinos who enrolled on the date fixed for registration in accordance with the provisions of the National Defense Act was greatly in excess of what had been anticipated; in fact it was almost double our estimates. The school teachers who were given instructions in training camps to equip them with the knowledge necessary to carry out the work assigned to them in the schools under the provisions of the National Defense Act, conducted themselves so well and their training was so successful that they deserve from me a well-merited public recognition. It has been plainly demonstrated that our people are ready for the supreme sacrifice in defense of their motherland and their liberty.

I order to expedite the organization of the new Army, I made ad interim appointments to the positions of Chief and Deputy Chief of Staff, the Provost Marshal, and other high ranking officers. These appointments were made after a careful and impartial study of the record of every man and were made upon the recommendation of the Military Adviser of this Government.

No one better than I knows how essential it is to entirely disassociate the Army from politics and, as scrupulously in the rank and file as in the high command, to make merit as the one and only basis of promotion. The Army is a double-edged sword. It is the arm of the Government which is the last resort for the enforcement of the laws and so compel obedience to constituted authority, for the maintenance of peace and order, and for the defense of the national integrity and liberty. But as contemporary history proves to us, the army can also be a disturber of peace and the enemy of law and established government, and in many instances it has been the instrument for the overthrow of constitutional regime. In building up our national defense, and in organizing the regular armed forces of the Islands, these tragic lessons of history must be constantly borne in mind, and it behooves us, who are for the time being entrusted with the responsibility of leadership over our nation, to be forever watchful and vigilant lest we sow the seeds of a possible future misuse of our armed forces. A just and fair treatment for the Army and its rank and file, the upholding of civil authority over the military, insistence upon strict discipline within the organization, non-interference by outsiders, political or otherwise, and a rigid prohibition against the use of the organization or its members for political purposes –these are the basic principles that must be faithfully adhered to in order to make the Philippine Army the safeguard of our liberties and constitutional government, as well as the bulwark of our national integrity and independence.

During the brief period that I have been at the head of the Government, I have inspected most of the garrisons of the Philippine Army and Constabulary. I know and have known for years many of the officers of the organization and have had intimate relations with the high command. The discipline, the gentlemanly conduct, the devotion to duty, the patriotism and courage of the officers and men make me feel proud as a Filipino and as the Commander-in-Chief of these armed forces of the Commonwealth.

The National Economic Council –Another important legislation which you passed in your inaugural session is that which creates the National Economic Council to advise the Government on economic and financial questions, including the improvement and promotion of industries, diversification of crops and production, tariffs, taxation, and such other matters as may from time to time be submitted so its consideration by the President, and to formulate an economic program based on national independence.

In accordance with the provisions of said Act, I have appointed the Secretary of Finance, the Secretary of Agriculture and Commerce, the Chairman of the Board of Directors of the Philippine National Bank, the President of the National Development Company, the President of the Manila Railroad Company, Mr. Joaquin M. Elizalde, Hon. R.J. Fernandez, Mr. Wenceslao Trinidad, Mr. Vicente Madrigal, Hon. Francisco Varona, Mr. Ramon Soriano, Hon. Vicente Singson Encarnacion, Hon. Rafael R. Alunan and Dr. Manuel L. Roxas, as members of the National Economic Council and designated as Chairman thereof the Secretary of Finance. The Council was organized on February 14, 1936, and it commenced to function immediately thereafter.

As may be expected, considering the complex and highly technical character of the task entrusted to it, the National Economic Council has not so far submitted to the Government any economic program, nor has the Government sought the advice of the Council except on one question: namely, the advisability of creating the National Rice and Corn Corporation for the purpose of bringing about the stabilization of the price of rice, the most important staple food of our people, by protecting equally the producer and the consumer, and also to serve as an agency of the Government to meet local or national emergencies in cases of shortage of rice. It should be stated in all candor that it was only after a long debate inspired by honest differences of opinion that the National Economic Council gave its approval to this venture. Despite certain doubts expressed by some members of the Council, however, I am confident that the National Rice and Corn Corporation will ultimately solve the rice problem, one of the most serious national problems which for years has been confronting our country and which demanded immediate attention on account of its very serious implications.

The situation may be summarized as follows: The main food supply of the Filipinos, like that of most Orientals, is rice. For many years the country did not produce a sufficient quantity of rice for its consumption and the Government deemed it necessary even to borrow money for the purpose of establishing irrigation systems in order that the country may be self-sufficient in rice supply. Our yearly importation of this article amounted to many millions of pesos, reaching over P25,000,000 in one year. During the last two years we were able to produce practically all the rice needed for our consumption. But no sooner did we reach this stage than the price of rice went down, in fact so low that the rice farmer not only made no profit, but actually suffered considerable losses. As a consequence, there has been a growing discontent on the part of the rice growers, especially the tenants or kasamas , who are earning less than is required for the bare necessities of life. On the other hand, whenever, due to typhoons, drought, or floods there was a shortage of rice and prices reached high levels, either through the manipulations of a few conscienceless rice merchants or merely because of scarcity of supply, the consumer, especially the poor, became a victim of speculatory activities. To save them the Government had to intervene and take drastic measures at times in order to alleviate the crisis.

In spite of such a situation nothing has been attempted so far to remedy it, and this Administration felt that it was its duty, especially in view of the shortage of the last crop due to repeated typhoons and floods, to face the issue immediately and strive to solve the problem once and for all.

It is only natural that there should be some doubt or fear, and even resentment from some quarters, over the action of the Government; hence criticisms are being made in public and in private, and those who expected to make unreasonable profits from the rice crisis and were foiled in their anticipations, went so far as to see dishonest purposes in the creation of the Rice and Corn Corporation. All such doubts and criticisms, whether honest or malicious, did not deter the Administration from carrying out the plan that has been adopted, especially because no alternative had been suggested.

To meet the national emergency caused by the shortage of rice, I have designated the National Rice and Corn Corpation to act as the relief agency for the Government in place of the Bureau of Commerce which was in charge of this activity in the past. When the corporation started importing rice, the Collector of Customs, believing that the rice so imported must pay duties in view of the fact that it was being sold at some profit, informed the Secretary of Finance of his intention to collect such duties, and in fact did demand payment thereof by the Rice and Corn Corporation. After securing the legal opinion of the Secretary of Justice, I advised the Collector of Customs to desist from collecting any duties from the Rice and Corn Corporation on the rice imported so long as it was acting as the agent of the Government in meeting the emergency resulting from the rice shortage.

Heretofore, Government agencies disagreeing on the interpretation of the laws affecting their powers and rights, have been allowed to bring the case before the courts for adjudication. Such a policy, I think, is wrong, and in fact in one instance it has merited the criticism of our own Supreme Court. It makes both government agencies incur in unjustified expense and unnecessarily take up the time of the courts. Considered in its practical aspect, it only means taking money from one agency of the Government and giving it to another. If it had been a question of the Government on the one hand as against a purely private enterprise on the other, then it would have been not only proper but also necessary for the courts to have intervened.

The Court of Appeals –Commonwealth Act No. 3, enacted also during the inaugural session of the Assembly, created the Court of Appeals in order to expedite and improve the administration of justice.

In accordance with the provisions of said Act, I appointed the members of the Court who forthwith proceeded with its organization. These appointments were made after full information and careful consideration, with an eye single to the best interests of the administration of justice.

As soon as funds are available for the purpose, I shall recommend to the Assembly that the necessary appropriation be made for the creation of another division of the Court of Appeals to sit in one of the southern provinces and to authorize the various divisions of the Court of Appeals to sit in any of the provinces within their jurisdiction, to hear cases pending before the Court for decision. Such procedure would not only expedite but would also greatly reduce the cost of appeals to litigants, thus making this appellate Court more accessible to the poor.

Manila Railroad Company –A very important measure approved by the National Assembly is Commonwealth Act No. 4 providing funds to be loaned to the Manila Railroad Company for the purchase, before maturity, of certain outstanding bonds of the said Company. In accordance with the provisions of this Act, I directed the Insular Treasurer to loan to the Manila Railroad Company P9,900,000, and authorized the Philippine National Bank to use P3,360,000 of its funds in the purchase of said bonds.

On January 29, 1936, upon payment to the Manila Railway Company (1906) Ltd., through the Chase National Bank, New York City, of the sum of $6,698,631.41 covering the principal, interest and exchange premium, all of the Souther Lines 4 per cent gold bonds maturing May 1, 1939, held by the English Company, with par value of P16,340,000, were delivered to the order of the Bureau of Insular Affairs, Washington, D.C., acting as representative of the Commonwealth Government and the Manila Railroad Company.

The successful culmination of this exceedingly important transaction resulted in great financial advantages to the direct benefit of the Manila Railroad Company and indirectly of the Commonwealth Government, which is the sole owner of the property. The following estimates indicate in round figures the savings that will be effected between now and the maturity of the bonds:

Total face value of the bonds held by the Manila Railway Company (1906), Ltd. …………….. P16,340,000.00
Cost at 80 per cent of face value …………….. 13,072,000.00
Savings in principal …………….. 3,268,000.00
Less –premium …………….. 165,500.00
Net saving in principal …………….. 3,102,500.00
Normal 4 per cent annual interest on English Company holdings P653,600.00  
Normal interest for 1936, 1937, 1938 and half of 1939 2,287,600.00  
Premium for 3-1/2 years at P441,180 each year 1,544,130.00—————— 3,831,730.00—————————–
Total …………….. P6,934,230.00
2% on P13,350,000 for 3-1/2 years   934,500.00—————————–
Total savings in principal and interest …………….. P5,999,730.00================

The above savings on the English Company holdings are based on the principal of the bonds being redeemed at maturity at their face value. However, both the principal and interest are subject, at the holders’ option, to payment in certain European currencies at the former gold equivalent, and if this option should be exercised covering the principal at the time of maturity, the amount necessary to redeem the bonds being held by the English Company would, on the present basis of exchange, represent a total sum of approximately P27,287,800. The purchase of these new bonds at this time for the sum of P13,072,000, therefore, means a saving in interest and principal of about P14,200,000 besides a savings in interest and premium amounting to about P2,900,000 after allowing for the two per cent interest on the loan from the Government, or a total saving of about P17,100,000.

The investment of the Government in the Manila Railroad Company including bonded indebtedness of the Company all told amounts to approximately P28,000,000. This is a respectable sum for any Government and doubly so for a Government whose yearly revenue at present is around P78,000,000 and at its highest peak only reached the total of P92,783,173.70.

Bus and truck transportation due to improved roads in the northern and central provinces of Luzon have caused a large decline in the income of the Manila Railroad Company. We cannot afford to allow this situation to continue and permit the Government to suffer tremendous losses in railroad operation, for the time might come when the Government would either be compelled to suspend the operation of the Railway or carry a yearly financial burden that sooner or later would bankrupt the National Treasury.

The Manila Railroad was acquired by the Insular Government in 1917 in order partly to withdraw from foreign hands the control of our most important means of transportation at that time. Soon after the Government assumed the administration of this property, the railroad began paying interest on the bonds from its revenue, and even extended some of its lines with its own resources. Only during the last two or three years has the income of the railroad begun to decline due, as already stated, to bus and truck competition. If it should be found advisable, I am prepared to authorize the Manila Railroad Company to purchase some of these competing bus transportation companies or else to have the Government establish and operate its own bus and truck services. The Constitution expressly authorizes the Government to establish and operate means of transportation and communication, and, upon payment of just compensation, transfer to public ownership utilities held by private individuals to be operated by the Government.

Another step that must be taken at once is the completion of the railroad line to the Bicol provinces. This, I am informed, will make the southern lines a paying enterprise. In pursuance of the authority vested in me by law, I have directed the Secretary of Finance to purchase P3,000,000 worth of stocks of the Manila Railroad to finance the completion of the Aloneros-Ragay line. It is my understanding that to complete the road the Government will have to invest only P700,000 more in addition to the P3,000,000 referred to above.

But this amount will have to be greatly increased if the Manila Railroad Company is not given permission to abandon the Legaspi-Tabaco, Las Pinas-Naic, Rosario-Montalban and Batangas-Bauan lines which are absolutely unnecessary from the point of view of public convenience and which, consequently, are causing an annual loss of about P100,000 to the Railroad Company. Once these lines are abandoned their materials and equipment will be used in the construction of the Aloneros-Ragay line.

I, therefore, earnestly recommend that a law be enacted authorizing the Manila Railroad Company to abandon the lines above mentioned.

Government Survey Board –In accordance with the provisions of Commonwealth Act No. 5, I appointed Hon. Miguel Unson, as Chairman, and Mr. Wenceslao Trinidad and Mr. Jose Paez, as members of the Government Survey Board on February 14, 1936. The Board has been devoting considerable time to the investigation of the Government bureaus and their activities and to the formulation of a plan whereby the Government may be simplified and made more economical as well as more efficient. The most important recommendation of this Board is the creation of the Budget Office, which I have approved, and in accordance therewith I have appointed the Auditor General and the Director of Civil Service, as members of the Commission and the Honorable Serafin Marabut, former Chairman of the Appropriations Committee of the National Assembly, as Undersecretary of Finance and Director of the Budget. The budget which I will soon submit to the Assembly has already been prepared by the Commission and approved by the Cabinet. The only other case in which I have exercised the authority granted me by Commonwealth Act No. 5, also upon the recommendation of the Survey Board, is the transfer of the coastguard and lighthouse service from the Department of Agriculture and Commerce to the Bureau of Customs.

At this time the Board is conducting a careful investigation and study of the activities of the Bureau of Lands, General Land Registration Office, Bureaus of Public Works, Science, Animal Industry, Plant Industry and Health, and of the University of the Philippines, with the end in view of avoiding duplication and simplifying procedure. Special attention is being given by the Board to the matter of cadastral surveys, homesteads, a general registration office, a central statistics office, and proper allocation on centralization of laboratories with the purpose of recommending the intensification of industrial researches, so essential to the economic development of our country. Preliminary survey of the provincial and municipal services is likewise under way.

Philippine National Bank –In accordance with the provisions of Commonwealth Act No. 6, the Philippine National Bank has written up certain assets, heretofore considered as losses, at their actual value. On January 17, 1936, the sum of P3,940,000 was thus written up and paid to the Government, and on May 18, 1936, the sum of P2,944,997 was also written up to be paid to the Government in due course.

National Loan and Investment Board –The National Loan and Investment Board created by Commonwealth Act No. 7 has been constituted by the appointment of Mr. Salvador Lagdameo, as chairman, and of Dr. Luther B. Bewley, Mr. Jose Bernardo, and Mr. Pedro M. Moncayo, as members.

The Board began functioning on February 29, 1936, by adopting measures to organize its office and at the same time granting loans from the different funds placed under its control and administration. Due to the natural delay encountered in making the delimitation of the powers of the National Loan and Investment Board and those of the different boards and offices originally controlling the several investible funds transferred to the former, as well as in transferring the personnel and appointing the necessary new employees, the Board has not as yet been able to completely organize its office and to function as properly as it should. The amount of investible funds, the investment of which has been placed under the administration of the National Loan and Investment Board, aggregates P45,000,000 as of December 31, 1935. The actual transfer of these funds to the National Loan and Investment Board has not yet been completed. It is, however, hoped that such transfer will soon be effected.

It has been found that certain amendments to Commonwealth Act No. 7 are immediately needed in order to clarify some of its provisions.

Construction of Roads in Mindanao –In the exercise of the powers vested in me by Commonwealth Act No. 18, I authorized the expenditure of P820,000 for the completion of the road connecting the Provinces of Lanao, Cotabato and Davao on the Island of Mindanao. As an initial step in the program of giving new impetus to the development of Mindanao, this work will be of incalculable value to the country, since it will not only provide an overland outlet for Davao but will also open to settlement immense unoccupied areas of that island.

The time has come when we should systematically proceed with and bring about the colonization and economic development of Mindanao. A vast and rich territory with its untapped natural resources is a temptation to enterprising nations that are looking for an outlet for their excess population. While no nation has the right to violate the territorial integrity of another nation, people that lack the energy, ability, or desire to make use of the resources which Divine Providence has placed in their hands, afford an excuse for a more energetic and willful people to deprive them of their lawful heritage. If, therefore, we are resolved to conserve Mindanao for ourselves and our posterity, we must bend all our efforts to occupy and develop it and guard against avarice and greed. Its colonization and development will require no little capital. But every cent spent for this purpose will mean increased national wealth and greater national security. The present income of the government is quite insufficient to even attempt to do more than carry on its present activities. Were there no other reasons for the creation of new sources of revenue, the need of developing Mindanao alone would make it an unavoidable duty for this Assembly, especially those who visited Mindanao recently with me, are conscious, I feel sure, of our grave responsibility to encourage settlement and develop Mindanao. There are provinces in Luzon and the Visayas that are already overpopulated. There are localities in some of those provinces where the people live on large estates without opportunity to earn a livelihood sufficient to meet the necessities of civilized life, much less to own the land wherein they live and which they cultivate. It is inconceivable that such a situation should exist in a country with extensive areas of fertile uncultivated lands. I invite you, therefore, to give this matter preferential consideration.

The so-called Moro problem is a thing of the past. We are giving our Mohammedan brethren the best government they have ever had and we are showing them our devoted interest in their welfare and advancement. In turn they are giving us their full cooperation. Let us reserve for them in their respective localities such land of the public domain as they may need for their well-being. Let us, at the same time, place in the unoccupied lands of that region industrious Filipinos from other provinces of the Archipelago, so that they may live together in perfect harmony and brotherhood.

Public Instruction

In order to comply with the provisions of the Constitution concerning public education I feel it my duty to see to it that a careful study be made of the fundamental problems brought about by the conditions now obtaining so that our educational policies and objectives may be re-defined. Our system of public education must be inspired in Filipino patriotism and consecrated to the formation of citizens of high moral character and civic virtues. It must equip our citizens with social and vocational efficiency not only for their own benefit but also so that they may the better serve the State. We must provide every child of school age the opportunity to receive primary instruction.

So that the Government may be advised as to the best method and the necessary means to carry out the reorganization and proper orientation of our public school system, I have created, by executive order, the Council of Education, composed of professional educators drawn from our own Bureau of Education and the Government University as well as from some of the best accredited private institutions of learning. Dr. Rafael Palma, former President of the University of the Philippines, is at the head of the Council. The members are: Hon. Gabriel Manalac, Dr. Francisco Benitez, Dr. Jorge Bocobo, Dr. Luther Bewley, Hon. Norberto Romualdez, Mrs. Sofia R. de Veyra, Dr. Mariano V. de los Santos, Dr. Nicanor Reyes, Dr. Manuel L. Carreon, and Mr. Segundo Infantado. I hope that during the present sessions some recommendations of the Council may be submitted to you for appropriate action.

Civil Service

During the last especial session I recommended the enactment of legislation that will make our Civil Service Law conform to the provisions of the Constitution. Lack of time prevented you from taking affirmative action on this subject, and I hereby renew my former recommendation.

The National Language

While it is my hope and conviction that the English language will remain one of the most generally spoken languages in the Philippines even after independence, nevertheless, we cannot ignore the injunction of the Constitution that we take steps for the formation of a national language based on one of the existing native languages. It is difficult to determine what practical measures may be adopted at this time to bring this about, but I wish to lay the problem before you so that you may give it your early and deliberate consideration. Perhaps a committee may be created to study the question and make recommendations.

New Taxes

In view of the new and greater responsibilities of the Commonwealth and the necessity of having at our disposal funds with which to carry out a comprehensive program for the economic development of the country, it will be necessary to create new taxes. The following are some of the tax measures which I recommend for your approval:

1.   The amendment of the Income Tax Law by reducing the personal tax exemption and increasing the rate of the tax on excess personal income and of the tax on corporate profits.

2.   The amendment of the Inheritance Tax Law by increasing the rate of the tax, particularly in the case of estates of decedents not leaving any forced heirs.

3.   The increase of the tax on mines.

4.   Taxes on luxuries and amusements.

5.   The creation of a school tax in an amount equal to the present cedula tax, which should be abolished.

6.   A tax on transportation and travel in an amount sufficient to take care of the maintenance and improvement of roads.

7.   A modification of the Land Tax Law, so as to provide for a progressively increasing rate of taxation based upon the area of the landholdings.

8.   Modifications of present tax laws to enable the Government to collect taxes more effectively.

The taxes I am recommending place the burden upon shoulders that can well afford to bear them and, if levied, the Commonwealth Government will be able to render our people new services so urgently needed for their welfare and progress. I feel confident that those who are called upon to pay these taxes will not grudge their added contribution to the public weal.

Until the National Assembly enacts the measure above referred to, it will be futile for me to present for your consideration a program of government activities or industrial development which the Government may initiate or help in part, for there will be no means with which to carry it out.


From time to time, during your present session, I shall have occasion to present for your study and consideration matters that, in my opinion, deserve your attention. Meanwhile, may I express the hope that the cordial cooperation which as existed in the last session between the Executive and the Legislative Departments will continue to be keynote of our relations? The success of the Commonwealth will depend upon the ability of the executive and legislative departments to cooperate with each other.

In our day and generation democracy, as an effective system of government, is being challenged. Let this new democracy of ours show to the world that democracy can be as efficient as a dictatorship, without trespassing upon individual liberty and the sacred rights of the people.