RIGHTS AND INTERESTS OF THE UNITED STATES AND ITS CITIZENS IN THE PHILIPPINES AND OF THE PHILIPPINES AND ITS CITIZENS IN THE UNITED STATES 10 1. RIGHTS AND INTERESTS OF CITIZENS OF THE TWO COUNTRIES In accordance with the declared policy of ultimately granting independence to the Philippines, the United States has given the Philippines increasing degrees of autonomy, culminating in the Independence Act of March 24, 1934, under the terms of which the United States will relinquish its sovereignty on July 4, 1946. Under this grant of autonomy, the Philippine authorities exercise control in matters affecting the rights and interests of citizens of the United States in the Philippines. In connection with the administration of this control by the Commonwealth authorities, some complaints have been made that protection of the type contemplated under the terms of the act has not been fully accorded. With regard to the rights and interests which, during the Commonwealth period, citizens of the Philippines are to enjoy in the United States, the Independence Act contains no provision. Because of this and possibly for other reasons, there has developed in the United States a feeling and, in some instances, a legislative tendency, to consider citizens of the Philippines as if they were aliens. In view of the situations which have thus developed in the United States and in the Philippines, the Committee recommends that, during the Commonwealth period, the authorities of the two countries, in both legislative and administrative action, should adhere to the policy of not curtailing the rights and privileges which citizens of the United States enjoyed in the Philippines and which citizens of the Philippines enjoyed in the United States, prior to the inauguration of the Commonwealth Government. 2. UNITED STATES GOVERNMENT PROPERTY IN THE PHILIPPINES The Independence Act contains several provisions in regard to the property and rights, including military and other reservations, of the "The term "citizens" is here used to include corporations. United States in the Philippines. Section 5 of the act provides that all the property and rights in the Philippines acquired by the United States under its treaties with Spain shall be granted to the Commonwealth Government except (a) such land or other property as had, prior to the passage of the act, been designated by the President as military or other reservations, and (b) such land or other property or rights or interests therein as may have been sold or otherwise disposed of in accordance with law. Section 10 (a) of the act provides that on July 4, 1946, the United States shall surrender to the independent government of the Philippines "all right of possession, supervision, jurisdiction, control, or sovereignty", then existing and exercised in and over the territory and people of the Philippines, including all military and other reservations, except naval reservations and fueling stations. In section 2 (b) (1) it is provided that the property rights of the United States and the Philippines shall be promptly adjusted and settled-a provision which is not to become effective until the date of independence. The Committee recommends that, in as much as under section 2 (b) (1) the question of adjustment and settlement in regard to equipment and improvements on the properties handed over to the independent government will probably involve certain financial arrangements, the said adjustment and settlement be determined prior to July 4, 1946, so that adequate preparations may be made. After the independent government is established on July 4, 1946, the Government of the United States will require, for its official establishments in the Philippines, properties such as a government normally maintains in the territory of a foreign country. For instance, the Government of the United States now contemplates the erection of certain buildings on a portion of the Camp John Hay Military Reservation, near the city of Baguio, for the use of its official representatives in the Philippines during and following the Commonwealth period. Unless some arrangement is made before the independent government comes into existence, this property, as a part of a military reservation, must be surrendered to the independent government. In view of the extensive properties which will be turned over to the independent government under existing law, the Committee also recommends, as a matter of equity, that, prior to the establishment of that government, some arrangement be made under which title to such properties as the United States may require for the aforementioned purpose would either be retroceded to the United States without compensation, or be acquired by the United States through an exchange of properties. BEARING OF THE DATE OF INDEPENDENCE ON THE PROGRAM OF ECONOMIC ADJUSTMENT The date on which the Philippines will attain independence under the terms of the Independence Act is July 4, 1946. By its terms of reference, the Committee was precluded from recommending any change in the date of independence. The Committee was directed, however, to consider the bearing which an advancement in the date of independence to 1938 or 1939 would have on facilitating or retarding the execution of a program of economic adjustment in the Philippines. The two essential factors for the effectuation of a program of economic adjustment are time and funds. With regard to the first factor, the Committee assumes, for the purpose of this discussion, that the period contemplated in its recommendations (extending through December 31, 1960) would remain the same regardless of the date of independence. With regard to the second factor, however, the date of independence has an important bearing. Since it may be expected that the extraordinary revenues which now accrue from the remittances of United States excise taxes on sugar and coconut products will cease upon attainment of independence, any advancement of the date of independence would result in a reduction of the funds available for economic adjustment. An advancement in the date of independence would also reduce the revenue to be derived from export taxes required by the Independence Act, and thus deprive the Philippine Government of an important source of revenue for debt-retirement sufficient, it is estimated, to liquidate the greater part of the existing Philippine bonded indebtedness.11 In addition, the Commonwealth Government would have to complete within a shorter period its national-defense program and other preparations for its future independent status. The resulting increase in expenditures for those purposes would coincide with a decline in revenue, and thus reduce the funds available for carrying out the economic-adjustment program. The Committee believes, therefore, that an advancement of the date of independence would materially increase the difficulties of the Philippine adjustment problem and result in a delay in the attainment of the objectives contemplated in the Committee's terms of reference. "United States duties would no doubt be imposed on Philippine products in lieu of Philippine export taxes. |