On official allowances (updated)

A quick political update as we go into the long weekend. The Inquirer editorial looks at the implications of the baranggay election. In his blog, Jove Francisco covers the (unexpected) return of Sec. Ermita:

Ermita denied he’s battling it out with Puno or that may samaan sila ng luob…but he gave a very meaningful line during his presscon today about the payola issue.

PDI’s Mike Ubac asked Ermita’s reaction about the admission of a local government group that they were the ones who distributed the cash gifts inside the palace and then followed it up by asking if he will allow such a thing to happen, kung siya ang tatanungin.

Ermita said “By golly, definitely not!” and then added “Alam ninyo naman na ako ay nasa loob lamang ng opisina ko nuong pumutok iyan!”

And during the ambush interview portion of the presser, Ermita even said “Basta hindi lang ako maging intrigero…(laughed again)”… some observers say, malinaw na parinig ito sa kung sino mang “kaaway niya”.

Another factor that bolstered suspicions that there is friction between these two cabinet officials is the fact that Ermita and Puno released opposing statements today about the possible presidential appointees in the vacant posts at the COMELEC.

Puno supposedly confirmed that the shortlist of names came from the Executive Secretary’s office and that it was released 2 weeks ago.

Ermita denied this saying that based on the process they follow “it is impossible!”.

Amidst the difference of pronouncements, both of them also declared that they are not fighting and are actually long time pals.

But the reported rift, though already denied by all parties concerned, is revealing a much bigger picture.

The bigger picture that the “on going” tension between the two largest member parties of the coalition (LAKAS and KAMPI) is still very much “happening”…a power play that has been happening since the start of the 2007 elections (Remember this? Just go back to past blog posts).

Puno, who is from KAMPI, is said to be the main man behind efforts to solidify the alliance of Erap and PGMA.

Ermita, on the other hand is a known LAKAS stalwart who traces his ascent to power from his links with FVR and JDV.

Thing is, both FVR and JDV have been at odds with the President after the following political developments, including the ZTE broadband deal, the Payola issue and the Erap pardon.

(So hindi lang ang opposition ang nagkakagulo as a result of the pardon, even the administration is problematic… coalition wise, for many other reasons. This aside from “the CHAVIT SINGSON problem” that palace sources say is also making the heads of many administration officials ache, kakaisip paano ito malulunasan o “mapipigilan”.)

BUT, despite all these, Ermita was quick to herald that everything’s a-okay within the coalition.

He even made a prediction that FVR will not forge an alliance with the opposition, because FVR “hates destab”.

And another interesting thing that happened today was…Ermita’s move to defend PGMA’s decision to pardon Erap.

A move that may well be different from that of his former boss–FVR… but, as some observers say, is quite logical for officials who have “been in politics for a long time.

Ermita’s parting words today:
“Huwag kayo niniwala masyado sa rumor, hindi tutoo yan, I am still around, hahahaha…”

You have to see the report and hear the way he laughed after declaring he’s still around, masasabi ninyong “napaka lutong” ng kaniyang halakhak.

Manuel Buencamino looks at the ability of the president’s supporters to rationalize their continued support.

On to the long weekend’s readings.

One of my favorite political autobiographies is Jose E. Romero’s Not So Long Ago: A Chronicle Of My Life, Times, & Contemporaries published in 1977 by Alemar-Phoenix. To my mind, it’s about as honest as any politician’s account of his life can be expected to be. Romero, who was a congressman, assemblyman, majority floor leader, Constitutional Convention delegate, and then Secretary of Education and sugar lobbyist, covered political events in which he played a part from 1925-1946 (it seems he died before he could complete his memoirs).

His memoirs helps explain how government officials went from living within their means to trying to supplement salaries that failed to keep up with inflation or the requirements of their jobs:

I entered Congress just when the great economic depression of the thirties began to be felt, and the first thing we did was to reduce salaries and expenditures by 10%. Congressmen’s salaries then were fixed at P600 a month, P7,200 per annum, and in our time there were no extras or allowances whatsoever. The reduction in our salaries of 10% amounted to P60 per month, and this was applied to all government employees, so that teachers who were getting P50 a month got a cut of P5 a month. It pleases me now to recall in what good spirit this sacrifice was made by all. Because we did not resort to deficit spending, the prices of everything, especially rice and other foodstuffs, remained low, so that no hardships were felt, especially by the poor. There was no complaint or discontent because everybody sacrificed equally. At that time the national budget was only about 100 million pesos. It is a mere pittance compared to the budget these days, but of course our population has increased tremendously and then the peso today is worth far less than it was then. The national debt was also around 100 million dollars, again a mere pittance compared to our present national debt. Our reserves in gold bullion and dollar deposits were more than 100% of the currency in circulation, and the peso was sound. In fact, when about that time the dollar was devalued, the American government had to pay us the difference between the value of our deposits and the devalued dollar.

This account by Romero brings up one (harmful) change over the years, which is that government salaries for officials that hold a great deal of responsibility, have shrunk while the salaries of the rank-and-file, on the other hand, remain all right. The gap between a congressman’s salary and that of a government director is almost negligible, while the gap in responsibilities remains vast. To compensate, all sorts of allowances have to be created which supplements the take home pay, but does not address the need to offer salaries commensurate with what’s expected of an official.

In this blog, a reader kindly calculated, more precisely, modern-day approximations of the value of various prewar official salaries (based on official figures I provided) to an extent that exceeded my own attempt at a computation of the value of the President’s salary over time.

Of course if you were to add up the various allowances members of Congress are entitled to, their salaries are fairly generous but the problem is that it involves quite a bit of accounting sleight-of-hand, which corrodes accountability. Romero’s memoirs points out the precise point when congressmen decided they have to find ways to boost their salaries. In his book, he wrote of the situation the last Congress of the Commonwealth faced, in 1945:

The members of Congress, like most other citizens, had lost most of what they had. When President Osmena came from the U.S., the best gifts that he could give to members of Congress was a khaki shirt, a pair of khaki trousers, and a pair of shoes. Most of the members of Congress attended sessions in this attire, and it almost looked as if this was the uniform of the lawmakers. To compound the problems of the members of Congress and everybody else, inflation was rampant. Even sugar was lacking and was selling at five times the usual price.

We had to commute between the House of Representatives and the houses where we were living in cargo trucks hastily converted for the use of passengers and we had to pay a very high fare. In order to alleviate the situation of the members of Congress who were getting no more than the six hundred pesos per month provided for in the Constitution, President Osmena, in the use of his emergency powers, authorized the Auditor-General’s Office to make advances to the members of Congress to enable them to meet the cost of living in Manila during the sessions. This was the principal reason afterward for the approval of the much criticized Back Pay Law.

At the end of the sessions, the Auditor-General was pressing for payment of the advances made under the authority given by President Osmena. Their term of office was expiring. The solution was found in the payment of Back Pay to the members of Congress for salaries due them during the war. This move was bitterly criticized by the public, and the question became an issue in the succeeding elections and caused the defeat of many members of Congress in their bid for reelection.

Taking an objective view of the situation, however, this form of relief for the lawmakers was almost a necessity. The amount involved was only a little, over P20,000 for every member of Congress, and the payment made was only once. Of this amount each legislator had already received some P8,000 in advances. It was simply impossible for the lawmakers to live in Manila at six hundred pesos a month with the inflation then rampant. Had the lawmakers at that time less respect for the Constitution, and had they then discovered the magic formula of the allowances, they could have solved their problem by making payments to themselves, not in the relatively small amount of P20,000 but ten times as much, as succeeding legislators were to get -and not only once, but every year.

Many of the members of Congress were defeated in the election that followed on this issue of back pay, but later members of Congress were to be reelected again and again after paying themselves much more in the form of allowances than the legislators of 1945 paid themselves in the form of back pay. This may mean either that our electorate have already become cynical and callous or that the greater fund available for election expenses is more effective to win votes than as an issue against the beneficiaries of these objectionable payments. Had the lawmakers in 1945 voted themselves two hundred thousand pesos yearly instead of twenty thousand pesos once, perhaps not so many of them would have been defeated. But then the temper of the people at the time was not propitious for such disregard of the proprieties, and there might have been violent demonstrations. Cynicism crept in slowly but steadily and, later, the voters ceased to mind anymore what in 1945 not only would have been fatal issues but might also have triggered violent reactions.

So the moral of the tale is things haven’t always been the way they are, but that things can change pretty swiftly and then gain their own momentum.

Incidentally, I had a meaty exchange with a reader about the prewar gold reserves of the Philippines. The reader emailed me this query, which I reproduce in full:

Dear Manolo,

I’ll go direct to the point. Please help me unravel a mystery that has not only aroused my curiosity but baffled me as well. With your considerable reputation as a historical sleuth, I’m confident you can solve or otherwise clear this up. Whatever will be the outcome will make for a good thriller. Of that I’m sure.

The mystery concerns what I call our national treasure consisting of some 20 tons of gold bars. This represents our country’s entire gold reserve at the time and quite possibly the total output of all the gold mines operating in the Philippines. The fabled Yamashita treasure, which in all likelihood is just a figment of the imagination, seems like loose change compared to the enormous value of this real-life treasure which may exceed 20 billion U.S. dollars using the current price of gold per kilo.

When Bataan, Corrigedor, Manila and the rest of the Philippines were about to fall to the Japanese in 1942, all the gold bars were removed from the Central bank located then at the port area in Manila and ferried by a navy vessel to Corrigedor. The precious cargo was loaded onboard the U.S. submarine U.S.S. Trout. On February 22, 1942, it left Corrigedor for Guam. Also aboard were President Manuel L. Quezon, his family and a few, select members of his wartime cabinet. President Quezon and his party, however, landed at Cagayan de Oro and then motored to the highlands of Bukidnon where they were flown to Australia. From there, they went to America where President Quezon lived in exile until his death at Lake Saranac in New York in 1944. So much has been written about the harrowing and exciting escapes of Pres. Quezon and General Douglas MacArthur from the “Rock” fortress, the latter by PT boat. Both were highly-secret naval operations to save the two from eventual capture by the enemy. But little, if none at all, is known about the enormous cargo of gold which President Quezon obviously brought with him. It seems this was the bigger secret, and it is not far-fetched to think that the Japanese were also after it.

The gold bars reached Guam and were transferred to the heavy Cruiser USS Michigan which sailed on to San Francisco where they were finally off-loaded at the wharf there. This is where my story ends, and the mystery begins.

Where did the shipment go from San Francisco? Were the 20 tons of gold all brought to Fort Knox where gold bullions such as these are generally known to be stored for safe-keeping or somewhere else in the United States? Assuming that they were indeed kept at Fort Knox, what happened to them after the war? Were they ever returned to the Philippines? If so, when and by what means?

There should be a paper trail in this secret odyssey of our national treasure. The Central Bank should or ought to know the whole story. The time has come to tell this in its entirety. Whether by design or plain oversight, we’ve been kept in the dark for close to 63 years.

History abhors a mystery. So do I and, of course, you. I will be vastly relieved if this story has a happy ending; that our national treasure is intact afterall and has not been lost or stolen.

Kindly take over where I left off at the wharf in San Francisco and finish the whole drama to its conclusive ending whatever that may be: either good or one more national disgrace.

Very truly yours,

FERNANDO A. ALMEDA, JR.
President
Surigaonon Heritage Center
Parola Boulevard, Surigao City

My response was as follows:

Thank you for your letter.

The disposition of the Philippine Treasury (its transfer from Manila to Corregidor, and the transfer of a large portion of it to the United States) was accomplished by a committee presided over by Chief Justice Jose Abad Santos (in his capacity as Secretary of Justice and Finance in the War Cabinet) and included Manuel Roxas. Treasury certificates and paper currency were burned after being itemized and notarized in a list. Coinage was dumped in the sea (where some of it was salvaged by the japanese, the majority of the coinage, however, being salvaged by the US Navy after the war).

President Quezon did not leave on the same submarine on which the Philippine bullion reserves was transported. The submarine you mentioned, the USS Trout, was not the submarine he traveled on, the USS Swordfish. Neither did Philippine officials leave on the same date as the shipment of Philippine gold reserves to the USA.

You will find desciptions of this process in the published biography of Chief Justice Jose Abad Santos by Justice Ramon Aquino:

Part of Abad Santos’s work on Corregidor as secretary of finance was the custody and disbursement of government funds. With [Vice President] Sergio Osmena, [Philippine Army Chief of Staff] Basilio Valdes, Jr., [Colonel] Manuel Nieto, and members of the American High Commissioner’s staff, he checked the gold bullions and silver coins deposited in Corregidor. He supervised the shipment of these by submarine to the United States. He superintended the burning of about forty million pesos in paper bills.

Justice Aquino’s sources are the Philippines Free Press February 17, 1951 and Carlos P. Romulo’s I saw the Philippines fall.

Indeed in most histories of this period the transfer of government funds from Manila to Corregidor and then to the USA is mentioned, and the care with which this was done, noted. As early as 1942, in the book Serpent of the Seas, by Commander Harley Cope, USN, you will find this (pp.222-225):

Another of our asiatic submarines had a unique assignment. Lieutenant Commander Frank W. “Mike” Fenno was given the job of evacuating the precious metal belonging to the Treasury of the Philippines and the banks from the Islands before the Japanese got their hands on it. This tall, sloping shouldered ex-captain of a champion Naval Academy baseball team -and who pitched our Asiatic Submarine baseball team to a Fleet victory when I was out there in the s-40- had been currently bringing in ammunition for the anti-aircraft guns on Corregidor. The shells were als worth their weight in gold.

The Japanese knew of course that there was a large amount of gold stored on Corregidor and in the bank vaults of Manila. Needless to say they were most desirous to obtain it. Efforts to prevent the Japanese from getting the gold were under way immediately after the war begun. American and Filipino stevedores worked day and night collecting metals, currency and securities belonging to the Philippine Commonwealth, to banks and mines and individuals.

On the night of February 4th, Captain Ferino brought his submarine into the harbor on the south hook of Corregidor, unloaded his precious cargo of much-needed anti-aircraft ammunition and took on gold and silver. Before the morning’s early light could expose the submarineto the eyes of Japanese patrolling planes it had slid out of the harbor and remained submerged during the day. After nightfall it was again alongside the dock and ton after ton of gold and silver was loaded aboard. This task was completed about 4 a.m. -too late to carry out the next assignment. The next night the submarine kept a rendesvous with an auxiliary vessel carrying the securities that were to be evacuated.

Mr. Woodbury Willoughby, former financial adviser to Mr. Francis B. Sayre, Philippine [High] Commissioner, to whom the Navy gave much credit for collecting the wealth of the Philippines, was on the auxiliary vessel and described the submarine’s appearance in the dark.

‘When nightfall came,’ related Mr. Willoughby, ‘the auxiliary vessel sailed from Corregidor to the rendezvous with her load of securities. The submarine did not make her appearance immediately. But, after a while, the dark hulk of the submarine pushed through the surface.

‘It took about 20 minutes to transfer the securities. Then Commander Fenno made a remark I’ll never forget. His crew had gone below and he was standing by the conning tower preparatory to giving the order to submerge. ‘Any passengers?’ hr asked cheerfully. Any of us would have been glad to get aboard that submarine but it was not for us to leave. We had to tell him no.’

During the long trip from Manila to Pearl Harbor several Japanese ships came within range of the American submarine and Captain Fenno lost no time in sending them to the bottom. The mere presence of tons of gold aboard could not keep my good friend ‘Mike’ out of a fight.

On March 20 Commander Fenno was awared the Distinguished [Navy] Cross for his entire crew of six officers and sixty-four men received Silver Stars for the feat of spiriting out a vast treasure of gold and silver from Corregidor right under the nose of the Japanese forces, and then sinking three of their ships.

Incidentally you will note that the Swordfish was commanded by Capt. Chester Smith, and that it left Corregidor Feb. 19, nearly two weeks after the departure of the bullion.

The circumstances surrounding the transfer of the Treasury are documented in The Sixth Annual Report of the United States High Commission to the Philippine Island to the President and Congress of the United States, Covering the Fiscal Year July 1, 1941 to June 30, 1942 Washington D.C., October 20, 1942 (pp. 48 to 58 chronicles this in extreme detail; the relevant portion as per your inquiry follows):

(pp.57-58)

“BULLION AND CURRENCY HELD BY COMMONWEALTH GOVERNMENT ON CORREGIDOR

“In addition to the valuables taken to Corregidor by the Office of the High Commissioner, a large amount of gold, silver, and paper currency was held there by the Commonwealth Government and was never turned over to the Office of the High Commissioner for safekeeping. Ther gold and sliver, which served as currency reserves, were on Corregidor, in the Philippine Treasury Reservations on that Island, before the war started. The gold comrpised 269 bars with an indicated weight of 1,343,493.95 grams and was derived from the melting of $805,410 face value of United States gold coins held by the Commonwealth Government at the time of the devaluation of the dollar in 1933. The silver was in the form of 1-peso coins an aggregate face value of P16,422.000. There were several small pieces of gold and silver in addition to the above. All of the gold and a large amount of 1-peso coins were loaded under the supervision of Commonwealth officials, headed by Vice President Osmena, and ere sent to the United States as ballast on the same submarine which carried the gold held by the High Commissioner.

“It Is believed that the Philippine paper money in the Treasury reservation was brought to Corregidor by the Commonwealth officials who accompanied President Quezon when he was evacuated from Manila. It appears from the records supplied by the Commowealth government that there was, early in Jaunary 1942, P78,261,825 in Philippine paper currency of various denominations held by the Commonwealth in its vaults on the Treasury reservation. This was subsequently increased by P19,900,000 clearing house funds, as noted above, making a total of P98,161,825.

“Twenty million pesos, all in Philippine Treasury certificates of P500 denomination, are reported to have been burned on January 19 and 20, 1942, on Corregidor by a committee designated by the President of the Philippines [footnote 17: The committee consisted of Messrs. Sergio Osmena, Vice President of the Philippines, Jose Abad Santos, Acting Secretary of Finance; E.D. Hester, Economic Adviser of the High Commissioner; and Col. H.F. Smith, United States Army). On January 21, 1942, it is reported that P500,000 were withdrawn from the Treasury Reservation and placed at the disposal of Mr. S.D. Canceran, special disbursing officer, Office of the President of the Philippines, to be disbursed by him for the purpose of paying of salaries and wages of officers, employees, and laborers of the Government, and for such other purposes as might legally be authorized. A message received from Corregidor in April [1942] indicates that prior to the capitulation of the fortress P50,097,925 in Philippine paper currency which was in the Treasury vaults was destroyed as well as P1,000,000 which was in a safe of the former Office of the President of the Philippines at Fort Mills, Corregidor.”

On pp. 118-119 the same report gives a full accounting of Philippine government funds in the United States; the gold is listed on a table on p. 118, in US dollars, at $1,360,621.08 and on p. 119:

“Currency Reserves in the United States. -When the Philippines are reoccupied it will almost certainly be necessary to adopt a new currency system. The Commonwealth government will be fortunate in having at its disposal for this purpose ample reserves now held in the United States. There were on deposit on June 30, 1942, in the United States Treasury $133,813,902.59, representing reserves of the Philippine currency. In addition, there was a small amount ($355,831.44) of currency reserves onm deposit with a private bank in the United States and the United States Treasury is holding for the Commonwealth gold bullion valued at $1,360,621.08 [footnote 40: This gold was brought to the United States by submarine after the war with Japan started as described in the section of the report entitled”Program for the safekeeping of currency, gold, securities, and other valuables.” Its value has been computed at $35 an ounce. See pp. 46-57 of this report]. The total of these items is well in excess of the largest circulation of currency that there ever was in the Philippines. As has been noted earlier in this report, ther greatest circulation of which we have record was P200,445,432, equivalent to $100,222,716, on September 30, 1941.

“The Commonwealth Government also has in storage in the United States a large number of silver 1 peso coins which were brought to the United States by submarine after the war started (see p. 57 above) After reoccupation of the Philippines it will be possible either to reissue these coins or melt and remint them.”

As for the disposition of government funds from 1942-45, the relevant executive issuances are in Executive Orders of the Commonwealth of the Philippines, Manila, Bureau of Printing 1945

I hope this answers your quiery to your satisfaction. There was no mystery surrounding the transfer of treasury funds as they were the currency reserves of the country. It was against the value of this gold that emergency wartime currency was issued by the guerrillas.

In response to the above, I was highly gratified to receive the following response:

Thank you likewise for your very kind, comprehensive and scholarly reply to my query. I’m completely satisfied that we have a happy ending here. Obviously, those were the times (perhaps just a golden memory) when public servants can be trusted with million of pesos of the people’s money.

You’re absolutely right. President Quezon and party did not leave onboard the submarine USS Trout but the USS Swordfish. I assumed that he did so because the date of his departure was Feb. 22, 1942, about the same as the ETD of USS Trout. That’s what I got for dealing with scanty and segmented data. Sorry.

There’s no mystery about the great wartime of our national treasure NOW. That’s because you’ve cleared that. How many students of history know what you’ve just narrated? I’m not sure if this event was discussed at all in our history classes with the length and clarity you just did which has amply justified my description of you as a historical sleuth. And what about the technical documents and process by which the gold reserve and other funds were removed from the Central Bank and our country. That certainly is something we didn’t know before.

Now we know better. Thanks to you. The lesson here seems to be: We should study our history more thoroughly and seriously. We can’t simply rely on you and a few other scholars to do so for us.

Your narrative was gripping, accurate and thrilling — and worth the reading. I said that earlier. I’m not disappointed that the whole episode had a happy ending. And I’m relieved.

Highest esteem.

Fernando A. Almeda Jr.

As was I, as I didn’t know the answer in full until Atty. Almeda made me look into it. On a final note, the compensation given to the Philippines due to the devaluation of the US dollar, which Romero mentioned in the first extract in this entry, was officially quantified in the High Commissioner’s report quoted in turn, above.

Unfortunately, in my response I failed to attach an interesting extract from the War Diary of Gen. Basilio Valdes, Chief of Staff of the Philippine Army and member of the War Cabinet. Here’s his entry for February 3, 1942:

February 3, 1942 – Tuesday

Nothing unusual during the day. At 10 p.m. I was already in bed when the phone rang. It was the Chief Justice telling me to get dressed as we had to go to the vault, to perform a secret and delicate mission. I dressed hurriedly met them at the entrance of the Malinta tunnel and we proceeded by car for the vault. The guards were surprised at our unannounced visit. A few minutes after we arrived, Commander Parker U.S Navy and some men with two station wagons arrived followed closely to the Staff of the U.S. High Commissioner. We worked incessantly all night. The work was performed with military proficiency, no noise, no conversations. We finished our mission at 4:30 a.m. What a relief! I returned home very tired and exhausted. I forgot to mention that at 7 p.m. Colonel Roxas, Colonel Nieto, Colonel Marron, Major Romulo, General Drake and myself went to the SS Legaspi for dinner – and what a dinner. We ate like wolves.

I was happy to receive a letter from Tito and one from Colonel Quimbo. Tito sent me 5 boxes of good tonic.

Additional documents I’ve encountered, concerning the disposition of currency notes, can be gleaned from the papers of Andres Soriano, Acting Treasurer of the Philippines and then Secretary of Finance in the War Cabinet. They trace the story of Soriano’s appointment, and accounting done on the run, literally.

First, a letter of appointment.

Malacanan Palace
Manila

Corregidor
February 19, 1942

Sir:

By virtue of the authority vested in me under the Constitution and laws of the Philippines, you are hereby appointed, ad interim, Treasurer of the Philippines.

(sgd.) Manuel L. Quezon

Mr. Andres Soriano
Corregidor

Next, a mission order:

Malacanan Palace
Manila

March 2, 1942

My dear Major Soriano:

You are hereby appointed Member of my War Cabinet without portfolio.

You will please proceed to Cebu where you will meet with the other members of my cabinet to take part in the deliberations of public matters that might come before it and to carry out other missions that I have entrusted to you. After you have completed your work in Cebu you will please proceed to Mindanao where you will be my Special Representative before General Sharpe. In matters affecting Civil Government in all the provinces of Mindanao except Surigao, I am designating you as my Special Delegate to act for me if and when prompt action may be absolutely necessary.

You will please discuss the civil matters with Mr. Guingona whom I have designated as the representative of the Department of the Interior to exercise the old functions of said department over provincial and municipal governments. However, during your stay in Mindanao, Commissioner Guingona shall discuss with you matters policy to be adopted in the Mindanao provinces, excepting the province of Surigao, and whenever there is a perfect agreement between you two and General Sharpe offers no objection thereto, such policies as may have thus been agreed upon, will be carried out as if they have received the specific approval of the President.

I hereby also authorize you to receive from the Manager of the Philippine National Bank and/or the Currency Committee in Cebu, all the funds that be required by the USAFFE in Mindanao as well as the provinces therein with the exception of Surigao.

You are also authorized to require the engraving of the necessary plates for the currency to be printed in Mindanao.

Sincerely yours,

(sgd.) Manuel L. Quezon

Next, a letter of introduction, to accomplish the mission order:

Malacanan Palace
Manila

March 1, 1942

My dear General Sharp:

Major Sorianowho was on the front has been appointed by me, with the knowledge and consent of General MacArthur, Treasurer of the Philippines, and I have made him member of my War Cabinet. I am sending him to Mindanao as my special delegate and representative to discuss with you and Mr. Guingona, and the other provincial authorities of Mindanao, the problems that exist there. Major Soriano has been given authority to act in my behalf. He will carry with him the funds that the USAFFE may need as well as the provincial and municipal governments in amounts that Cebu has already been able to print.

In order to avoid the need of sending for funds from Cebu, Major Soriano is going to see if he can have some plates made in Cebu for Mindanao so that emergency currency may be printed in some place in Mindanao. I do not consider wise to have Mindanao, or in fact any part of the Philippines, depend upon any other province which might be occupied at any moment.

Sincerely yours,

(sgd.) Manuel L. Quezon

P.S. I am taking the liberty of sending you a copy of the letter which General Jones wrote to General Sutherland regarding Major Soriano’s services in the filed, one copy og which letter having been given to me by General Sutherland himself.

MLQ

Additional authorizations:

Malacanan Palace
Manila

March 8, 1942

My dear Major Soriano:

I hereby authorize you to appoint the men that will constitute the Currency Committee for the provinces of Mindanao. If it should become necessary for military reasons to have this committee sit in Lanao, you are also authorized to issue the necessary order to this effect including the power to make transfer from one province to another of the officials that you may choose and appoint as chairman and members of this committee.

Sincerely yours,

(sgd.) Manuel L. Quezon

Major Andres Soriano
Treasurer of the Philippines

And a receipt from the source:

Received from the Philippine National Bank, Cebu Branch, two (2) galvanized iron lock boxes said to contain TWO MILLION TWO HUNDRED THOUSAND PESOS as follows:

Box. No. 4
Denomination      Amount Total
P20                         P750,000
P125,000              P775,000

Box No. 5
Denomination              Amount Total
P20                                P1,250,000
P5        175,000           P1,425,000

Total ———————————-P2,200,000

This represents the proceeds of my draft of this date for the same amount drawn on the Treasurer of the Commonwealth of the Philippines.

Cebu City, March 10, 1942

Andres Soriano
Treasurer of the Philippines

A treasurer’s report:

The Commonwealth of the Philippines
Province of Misamis Oriental
Office of the Treasurer
Cagayan, Phil.
March 15, 1942

Major Andres Soriano,
Treasurer of the Commonwealth of the Philippines,
Cagayan (now at), Misamis Oriental.

Dear Sir:-

I compliance with your verbal request, I have the honor to inform you of the following approximate distribution of the currency notes which I have received to-day from you, viz:

Province of Misamis Oriental —————————-P200,000.00
“” Bukidnon—————————————P300,000.00
“” Lanao——————————————-P300,000.00
“” Occidental Misamis————————-P300,000.00
“” Surigao—————————————-P300,000.00
“”Cotobato—————————————P300,000.00
Koronandal Valley, Gen. Santos———————-P50,000.00
Gen. Vachon’s Division———————————-P300,000.00
General Fort’s Division———————————-P160,000.00

Very respectfully,

(sgd.) Ubaldo D. Laya
Provincial Treasurer

Use of delegated authority:

DANSALAN, LANAO
BY THE SPECIAL DELEGATE OF THE PRESIDENT OF THE PHILIPPINES
ADMINISTRATIVE ORDER NO. 1

Appointing the Currency Committee for the Provinces of Mindanao

By virtue of the authority granted me by His Excellency, the President of the Philippines, on March 8, 1942, I hereby appoint the following to constitute the Currency Committee for the Provinces of Mindanao: Honorable Teopisto Guingona, Commissioner for Mindanao and Sulu, Chairman; Mr. Ubaldo D. Laya, Provincial Treasurer of Misamis Oriental, Member; and Mr. F. Atagaban, Provincial Auditor of Lanao, Member.

This Committee shall sit in Dansalan, Lanao, but is authorized to transfer its offices to any other place as may be agreed upon by them.

For this purpose, Treasurer Laya is hereby directed to reside in Dansalan, retaining, however, his status as Provincial Treasurer of Misamis Oriental. He shall accordingly make arrangements for his Assistant to discharge the duties of Provincial Treasurer of that province.

Done in the Municipality of Dansalan, this sixteenth day of March, in the year of Our Lord, nineteen hundred forty-two, and of the Commonwealth of the Philippines, the seventh.

(sgd.) Andres Soriano
Special Delegate of His Excellency,
the President, and Treasurer of the Philippines

Then, additional supporting documentation:

Counterpart No. 1

I hereby acknowledge to have this 24th day of March, 1942, received from Major Andres Soriano, Treasurer of the Philippines, the sum of TWENTY EIGHT THOUSAND SIX HUNDRED SIXTY THREE AND 30/100 (P28,663.30) PESOS, Philippine Currency, to be used by me as Special Disbursing Officer of the Office of His Excellency, The President of the Philippines.

(sgd) Serapio D. Canceran
Special Disb. Office
Office of the President.

Note-
This recepit consists of five counterparts, each of which serves as original.

Followed by:

Counterpart No. 2

Del Monte, Bukidnon,
March 24, 1942

I hereby acknowledge to have this 24th day of March, 1942, received from Major Andres Soriano, Treasurer of the Philippines, the sum of ONE HUNDRED THOUSAND AND NO/100 (P100,000.00) PESOS, Philippine Currency, to be used by me as Disbursing Officer for His Excellency, The President of the Philippines.

(sgd.) Manuel Nieto
Lieutenant-Colonel

Note-
This receipt consists of five (5) counterparts, each of which serves as original.

More supporting documents:

Counterpart No. 2

I hereby certify to have this 24th day of March, 1942, received from Mr. Serapio D. Canceran, Special Disbursing Officer, Office of the President, the sum of FIVE HUNDRED TWENTY EIGHT THOUSAND SIX HUNDRED SIXTY THREE AND NO/100 (P528,663.00) PESOS, Philippine Currency.

(sgd.) Major Andres Soriano
Treasurer of the Philippines

Note-

The above receipt consists of five (5) counterparts, each of which serves as original.

More documentation:

Counterpart No. 3

I hereby certify to have this 24th day of March, 1942, received from Col. Nieto the sum of ONE MILLION ONE HUNDRED THOUSAND AND NO/100 (P1,100,000.00) PESOS, Philippine Currency, which was the same sum received by said Col. Nieto from The Honorable, The Acting Secretary of Finance, Hon. Jose Abad Santos.

(sgd.) Major Andres Soriano
Treasurer of the Philippines

Note-

The above sum has been included with the funds contained in Box No. AA-1 (now footlocker with padlock) deposited for safekeeping temporarily in Del Monte, Bukidnon, in care of Lt. Col Paul S. Beard to be finally deposited in the new vault being constructed now at Dansalan, Lanao, care of Commissioner Teopisto Guingona.

(sgd.) Andres Soriano
This recepit consists of six counterparts, each of which serves as original.

An acknowledgment receipt:

United States Army Forces in the Far East
Headquarters, Mindanao Force
Bukidnon, PhilippinesMarch 24, 1942

Counterpart No. 4.

I hereby acknowledge that I have received from Major Andres Soriano, Treasurer of the Philippines, the following:

1. A box (foot-locker with padlock) bearing black sencil numbers B-41 on the sides and B-41 on the top:

Denomination      Total Number Value
P50.0040,000      P2,000,000.00

2. A box (foot-locker with padlock) bearing black stencil numbers B-52 on the sides and B-56 on the top:

Denomination      Total Number Value
P50.0040,000      P2,000,000.00

3. A box (foot-locker with padlock) marked AA-1 on top and sides:

Denomination      Total Number Value
(as per list enclosed in box)P1,500,000.00

4. A box bearing black stencil numbers B-56 on the sides and B-64 on the top:

Denomination      Total Number Value
P50.0040,000      P2,000,000.00

Contents of above four boxes were not checked or counted at time of storage, the control and accountability remaining with the Commonwealth Government, and not in any manner passing to the credit of the United States Government or any of its officers, and being held only for safekeeping until such time as the vault now under construction at Dansalan, Lanao, will be ready, at which time, the funds and responsibility will be transferred to Commissioner Teopisto Guingona, who is authorized to accept responsibility as custodian of the Commonwealth Government, thereby terminating entirely all responsibility of Col. Paul S. Beard, F.D., U.S.A. At no time will the contents of said boxes be used by anyone except by express authority of His Excellency, The President, Manuel L. Quezon, or Colonel Manuel Roxas, or Major Andres Soriano, Treasurer of the Philippines, or their successors in office. The keys of the temporary depository will be held by Colonel Beard and Commissioner Guingona and are to be turned over to their successors should either be transferred to other posts, which will terminate their responsibility entirely.

This receipt consists of six counterparts, each of which serves as original.

Dated at Del Monte, Bukidnon, this 24th Day of March, 1942.

(sgd.) Paul S. Beard
Lt.-Col., F.D.,
U.S.A.

The above agreement accepted for the Commonwealth Government of the Philippines, dated at Del Monte, Bukidnon, this 24th Day of March, 1942.

(sgd.) Andres Soriano
Treasurer of the Philippines

(handwritten notation & signature) Approved, Manuel L. Quezon

Additional records of transfers:

(vertical inscription: Per letter of President Quezon to Philippine National Bank, Cebu Branch, dated March 1, 1942)

Counterpart No. 5

THROUGH THE PHILIPPINE NATIONAL BANK

Exchange for P1,000,000.00 Del Monte, Bukidnon
March 26, 1942

——At sight—— of this First of Exchange (Second Unpaid) pay to the order of PHILIPPINE NATIONAL BANK CEBU BRANCH—–the sum of PESOS ONE MILLION ONLY—-

Value received and charge the same account of

To THE TREASURER OF THE COMMONWEALTH
OF THE PHILIPPINES, Manila

(sgd.) Andres Soriano
Treasurer of the Philippines

And more:

(vertical inscription: Per letter of President Quezon to Philippine National Bank, Cebu Branch, dated March 1, 1942)

Counterpart No. 6

THROUGH THE PHILIPPINE NATIONAL BANK

Exchange for P1,000,000.00 Del Monte, Bukidnon
March 26, 1942

——At sight—— of this Second Exchange (First Unpaid) pay to the order of PHILIPPINE NATIONAL BANK CEBU BRANCH—–the sum of PESOS ONE MILLION ONLY—-

Value received and charge the same account of

To THE TREASURER OF THE COMMONWEALTH
OF THE PHILIPPINES, Manila

(sgd.) Andres Soriano
Treasurer of the Philippines

And yet more:

(vertical inscription: Per letter of President Quezon to Philippine National Bank, Cebu Branch, dated March 1, 1942)

Counterpart No. 7

THROUGH THE PHILIPPINE NATIONAL BANK

Exchange for P2,000,000.00 Del Monte, Bukidnon
March 26, 1942

——At sight—— of this First of Exchange (Second Unpaid) pay to the order of PHILIPPINE NATIONAL BANK CEBU BRANCH—–the sum of PESOS TWO MILLION ONLY—-

Value received and charge the same account of

To THE TREASURER OF THE COMMONWEALTH
OF THE PHILIPPINES, Manila

(sgd.) Andres Soriano
Treasurer of the Philippines

And another:

(vertical inscription: Per letter of President Quezon to Philippine National Bank, Cebu Branch, dated March 1, 1942)

Counterpart No. 8

THROUGH THE PHILIPPINE NATIONAL BANK

Exchange for P2,000,000.00 Del Monte, Bukidnon
March 26, 1942

——At sight—— of this Second of Exchange (First Unpaid) pay to the order of PHILIPPINE NATIONAL BANK CEBU BRANCH—–the sum of PESOS TWO MILLION ONLY—-

Value received and charge the same account of

To THE TREASURER OF THE COMMONWEALTH
OF THE PHILIPPINES, Manila

(sgd.) Andres Soriano
Treasurer of the Philippines

Additional instructions:

Commonwealth Government of the Philippine Islands
Office of the Treasurer
In the Field
Del Monte, Bukidnon, P.I.
March 24, 1942.

This is to certify that, in the event the military situation indicates that the Commonwealth Government funds, deposited for safekeeping with Colonel Paul S. Beard, F.D., U.S.A., and Commissioner of Mindanao, Teopisto Guingona, are in danger of being captured by the enemy, the Commanding General. Mindanao Force, may order destruction, by a Committee of Three who will certify that the funds have been destroyed by them personally.

(sgd.) Major Andres Soriano
Treasurer of the Philippines

1 Copy for Major Soriano
1 Copy for Colonel Beard
1 Copy for Commanding General, Mindanao Force

(handwritten notation and signature) Approved, Manuel L. Quezon

A promotion:

March 26, 1942

Sir: You are hereby appointed Secretary of Finance, ad interim, and member of my War Cabinet. You may turn over all the records of the National Treasury to Colonel Manuel Roxas, Secretary to the President, who has been instructed by me to take the necessary steps for the proper administration of the affairs of that office.

Respectfully,

(sgd.) Manuel L. Quezon

Major Andres Soriano
Del Monte, Bukidnon

Then, submission of documents to the auditing office:

Commonwealth of the Philippines
General Auditing Office
Manila

Jaime Hernandez
Auditor General

1617 Massachusetts Avenue, N.W.,
Washington, D.C., May 21, 1942

Hon. Andres Soriano,
Secretary of Finance,
Washington, D.C.

Sir:

This will acknowledge receipt from you of copies of the following official documents:

1. Counterpart No. 5 of receipt dated March 24, 1942, at Del Monte, Bukidnon, signed by Paul S. Beard, Lt. Col., F.D., U.S.A., from Maj. Andres Soriano, Treasurer of the Philippines, for four boxes containing P7,500,000.00. Approved by Pres. Quezon.
2. Certificate dated March 24, 1942, at Del Monte, Bukidnon, signed by Maj. Andres Soriano, Treasurer of the Philippines, and approved by Pres. Quezon, authorizing destruction by a Committee of three, government funds deposited for safekeeping with Col. Paul S. Beard, F.D., U.S.A., and Commissioner of Mindanao, Teopisto Guingona.
3. Counterparts Nos. 5 and 6, dated March 26, 1942, at Del Monte, Bukidnon, signed by Andres Soriano, Treasurer of the Philippines, Exchange for P2,000,000.00 to Treasurer of the Commonwealth of the Philippines, Manila, thru the Philippine National Bank.
4. Counterparts No. 7 and 8, dated March 26, 1942, at Del Monte, Bukidnon, signed by Andres Soriano, Treasurer of the Philippines, Exchange for P1,000,000.00 to Treasurer of the Commonwealth of the Philippines, Manila, thru the Philippine National Bank.
5. Counterpart No. 4 of receipt dated March 24, 1942, signed by Maj. Andres Soriano, Treasurer of the Philippines, for the amount of P1,100,000.00 from Col. Nieto.
6. Counterpart No. 3 of receipt dated March 24, 1942, signed by Maj. Andres Soriano, Treasurer of the Philippines, for the amount of P528,663.00 from Serapio D. Canceran, Special Disbursing Officer, Office of the President.
7. Counterpart No. 2 of receipt dated March 24, 1942, signed by Serapio D. Canceran, Special Disbursing Officer, Office of the President, for P28,662.30, from Maj. Andres Soriano, Treasurer of the Philippines.
8. Counterpart No. 2 of receipt dated March 24, 1942, signed by Lt. Col. Manuel Nieto, Disbursing Officer, Office of the President, for P100,000.00, from Maj. Andres Soriano, Treasurer of the Philippines.
9. Memorandum Report of S.G. Miranda, Acting Manager, Philippine National Bank, Cebu, dated at Cebu City om February 28, 1942.
10. Letter of Andres Soriano, Secretary of Finance, to the Manager, Commonwealth Bank of Australia, Melbourne, dated April 2, 1942, re transfer of $500,000.00 from the Chase National Bank to the National City Bank of New York.
11. Letter of Andres Soriano, Secretary of Finance, to the Manager, Commonwealth Bank of Australia, Melbourne, dated April 6, 1942, re transfer of $400,000.00 from the National City Bank of New York to the Chase National Bank.
12. Letter of Andres Soriano, Secretary of Finance, to the Manager, Commonwealth Bank of Australia, Melbourne, dated April 16, 1942, re amount of $15,000.00 to be operated by Maj. Joseph McMicking.

Respectfully

(sgd.) Jaime Hernandez
Auditor General

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