John W. Snyder Oral History Interview, April 9, 1969

Notice
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened September, 1970
Harry S. Truman Library
Independence, Missouri

[1340]

HESS: Mr. Snyder, at the conclusion of our interview on March 26th we were discussing the trip that you took to the Far East in November of 1949, and you mentioned that it was a three-fold mission. Just what do you recall about that trip?

SNYDER: Well, that was one of the most interesting trips that I made during the days of my occupancy of the office of Secretary of the Treasury. This trip was actually, as I mentioned to you the other day, a three-fold trip. Officially it was called an inspection trip covering the Pacific installations of the Coast Guard. Included in my objectives, however, in addition to checking the Coast Guard installations, which included some thirteen loran stations which had been established during the war. Now a loran station,

[1341]

it's spelled L-O-R-A-N, and that is long range aids to navigation. These stations were set up during the war in order to assure constant travel without weather interference. So that you could locate yourself at any time whether the sun was out, whether you were in the clouds, if you were completely cloud bound, you were able by triangulation with these loran stations to locate yourself promptly. And we had these stations all over the Northern Atlantic, and over the Pacific from Alaska down as far south as the Wake-Guam group. By an act of Congress the Coast Guard took over that responsibility. They were operated by the Navy during the war but they were turned over to the Coast Guard for operation. And this was our first opportunity after we had shaken the procedures down pretty carefully to go over that Pacific route to check up on the performance and the morale of these outposts. Rear Admiral O'Neill was to

[1342]

be promoted to command the Coast Guard the following month, and so we thought it was a very appropriate time for the two of us to check on the general Coast Guard stations and to check on these loran stations. In addition to the loran stations, of course, we had some large Coast Guard installations in Alaska, in Japan, in Manila and Honolulu, over and above the loran stations. Rear Admiral Merlin O'Neill was one of our outstanding Coast Guard offices during my time in service.

The second item that we had in mind on this trip was a visit with General MacArthur in Tokyo and go over with him the work that had been done by a task force of twelve top Treasury technicians that I had sent over at his request and loaned to him to make a study of the tax situation to plan a tax program for the Japanese, to set up a revenue collecting operation, to set up a new accounting system for the new Japanese government. This

[1343]

work had been well underway and was approaching the close of the operation. And so I felt that it was a very appropriate time to go over with General MacArthur the work that they had done, see that he was thoroughly satisfied, had no criticisms or complaints that couldn't be adjusted before they finished their job, if he did have any.

And the third objective that I had was to study the political situation in Alaska, in Japan, in the Philippines, and in Honolulu. In Alaska and Honolulu the requirement that I had placed on myself was to feel around and check and learn as much as I could about the real urge for statehood. That was beginning to be a very strong subject about that time.

HESS: What were your findings?

SNYDER: Well, we'll, get into them as we, go around the trip. Another objective that I might mention,

[1344]

which we will pick up a little later, was we had a real problem in the Philippines on the war damage settlements and adjustments that were being made, and that was part of the Treasury's duties to sort of supervise and look after that operation. We left here on November 12th, and in our party, in addition to myself, was Rear Admiral Merlin O'Neill, U.S. Coast Guard; Captain Stanley C. Linho1m, U.S. Coast Guard; Captain Roy L. Raney, U.S. Coast Guard; William J. Bray, who was my assistant, and nine members of the U.S. Coast Guard, including three operation officers who were thoroughly familiar with all the stations and the loran operations. And in addition to that we had with us nine Treasury employees who were going over to help check the situation in Japan and in Manila, because we had a matter of great importance that we had to look into when we reached Manila.

[1345]

We left Washington on November 12th at 10 p.m. We flew to Seattle, landed at Sand Point, refueled at that point and spent the night. We left there early the next morning on Sunday, November the 13th, at about 8 a.m. We flew first to Annett Island in Alaska and we arrived there about 11 a.m. and went over to Ketchikan for a conference with Mayor Talbot of Ketchikan. We were met by the Coast Guard officers of that station and at 11:30 we made an inspection of the Coast Guard installations including the loran stations that we had in Alaska. At 12:30 we were given a luncheon by Mayor J. A. Talbot. The Mayor gave us a very warm welcome. That was the first time they ever had a Cabinet officer in Ketchikan, and they gave quite a warm welcome to me, and replied with a short talk on our trip and what our objectives were, particularly in Alaska, and so forth. At 1:30 we took a little quick

[1346]

circle around Ketchikan in a small plane, and at 2 o'clock we departed for Juneau. We arrived at Juneau at 3:30 p.m. and were met by a Coast Guard reception committee and proceeded to the Hotel Baranof and I was assigned to suite 307. By the way, we were joined at that point by Governor Ernest Gruening. At 4 p.m. we had an open house party at the Community Building, a new building which had been constructed by the citizens of Juneau, and was turned over to the Coast Guard for occupation. And so they took the occasion of my arrival there to have this open house party and the inspection of new quarters that the Coast Guard would move into shortly. Following that inspection we took a tour of the city and at 7 o'clock we went to the Governor's mansion for dinner, black tie official dinner at which the Governor had invited quite a number of the important people in public life in Alaska. They'd

[1347]

flown in from Fairbanks and from Anchorage, and from Ketchikan. And in addition to that he invited all the top Coast Guard officers, and General [Nathan F.] Twining from over at the Air Force installation in Anchorage. The Governor gave me a tremendous opportunity to touch on one of the phases of my trip, and that was on statehood for Alaska, and we stayed rather late that evening going into all the various arguments, most of them were pro, some were con. Governor Gruening was very enthusiastic, so I'm sure that he had not intended to bring any opposition in to talk about it. But the ones that did bring up the question of whether or not it was the proper thing to do were worried about the ability of Alaska, its responsibilities under statehood and the requirements to raise revenues and to be self-governing. Alaska has had a rather varied experience, as you know, from gold mining to fishing to fur and tourism. And

[1348]

so they had some good arguments pro and con, but the Governor kept pressing the fact that under statehood that they could expand, get industry in, get an agricultural program going. You know the interesting part is that we think of Alaska being way up in the cold North, but the year around average temperature of Juneau is higher than it is here in Washington. It's because of the Japanese ocean current that goes around that way. I learned, much to my interest, that over in the area around Anchorage they have tremendous truck gardening operations there and even in the short growing season that they have they produce some of the finest vegetables, full of all of the minerals and vitamins and everything that you need. That was extremely interesting, and they had great plans for developing that product and not only supplying food for the territory, but also that they might export some products to Canada and the United States. Their mining

[1349]

had tapered down to where it was not one of the top resources although it still produces a considerable amount of the gold that we get in the United States.

The next morning we had breakfast early at 8 o'clock in the Gold Room of the Baranof Hotel. It was a custom of mine all during the time that I was in the employ of the Government, either as the head of the Defense Plant Corporation during the war, or later in the Federal Loan Administrator's job or as OWMR, whenever I went into any city, I tried to get assembled as many of the Treasury people as I could -- or whatever operation I was in. Whether it be Defense Plant people or Federal Loan Administration or whatever I was operating, I always tried to get as many of my people in from the surrounding territory to give me an opportunity to have some real communication with them, learn how they were getting along, get a feel of their attitude towards

[1350]

their job, and also to learn some of the problems or some of the strong points of the community. So I followed that on this trip and at 8 o'clock we had an all Treasury personnel breakfast. At 9:30 I conferred with the Alaskan bankers. And here again I got a cross-section of views. Some of the bankers were not so enthused initially for statehood. However, the consensus was that statehood was necessary. What the bankers were concerned about was how they were going to get sufficient funds to make loans and, under a state operation, whether there would be any curtailment of their operations, and I assured them that from my banking experience, that I doubted that they would have any real problem if they had proper loans. If you're looking far subsidies and things of that sort that's one thing, but if you're looking for proper financial backing, you'll always find

[1351]

that through the aid of the Federal Reserve Bank or through the corresponding large banks, and you'll have sufficient funds to make proper loans. Following the talk we took a visit to one of the gold mines, and saw the operation. They had one entry there that they were still operating under the same old procedures that they had used way back in the gold rush days. They had one shaft that was modernized. It gave us a pretty good view of the wide differences of present day against the old days.

HESS: I understand that some of the gold mines in Alaska are not operated now because it just isn't profitable at $35 an ounce. Is that correct?

SNYDER: That is correct. The rich part has been mined out. There's gold there, as we have discovered out in the west, but you have to bring in those big dredging machines and the amount of

[1352]

overburden that you have to process to come up with a small amount is pretty large to net gold returned. I think that we mine less than seventy-five million dollars in gold a year in all our various operations in the U. S., even with these new machine operations in the west.

Following the trip to the mine, we had luncheon again in the Gold Room and this was under the auspices of the Lion's Club, the Chamber of Commerce, and other civic groups of Juneau. On this occasion they had asked me to make a talk to them about economic conditions and they, I think, largely wanted an opportunity to ask me a lot of questions after the talk. And again I got the opportunity with a cross-section of businessmen, small as well as large. The night before I had had the big ones, and at lunch with this group, I had a chance to get to be one of the smaller men. By and large though they all had, great hopes that statehood was going to bring them something

[1353]

that was to their great advantage.

Following the luncheon with this group, I went to visit the Coast Guard installations around the area. We returned for a reception that had been prepared for us at the Community Office Building. And this was sponsored by the Coast Guard office under Commander Storis, and this threw the Community Building open for the general public to come in again. During the afternoon they had moved quite a bit of the office things in there and they had the semblance of getting established. And then following the reception at 7 o'clock we had a banquet in the Gold Room at the hotel and this was sponsored by the community business clubs. On that occasion the dedication ceremonies of the Community Building were carried off and the lease to the building was presented to the Coast Guard and I made a speech of acceptance of the building, and was followed by Admiral O'Neill who gave a

[1354]

talk on the future plans for the Coast Guard for that area. This was extremely interesting, because it demonstrated to us the great reliance that the people of Alaska put in the Coast Guard, and actually they're a protective group and we had to be very cautious about that because we didn't want to give the notion that the Coast Guard was a military unit, or defense unit, and had many other things for which they were responsible. And the one spokesman, the Mayor of Juneau, was complaining about the lack of defense preparation. You must recall that this was in 1949 and only about eight months before the Korean thing broke out. They were discussing about strange ships coming by and that they didn't know what was going on. So I asked them to make a full report of that and that we'd turn it over to the proper people when we came back to the states. One of the chief topics was statehood

[1355]

and by the time I left Alaska, I want to tell you that I became pretty well imbued with the idea that it would be a good thing if the citizens would really get behind it the way they all seemed to because, as you can see, I really saw quite a cross-section of the people while I was there.

After the dinner we had a rather interesting experience. We went down and boarded a Coast Guard cutter and went back into the glacial area and by moonlight, saw this magnificent glacier, and then to give us a real thrill the ship fired a number of rounds into the face of the glacier and caused a cascade of ice. And then we sent a boat over to pick up some of the glacier, brought it back and cracked it up and put it in our hi-balls. And it just didn't melt, it was so pressed, you know, and all the air had been crushed out of it. It was deep blue ice. If you dropped it into your drink

[1356]

you had ice for the evening. It was rather interesting. And while the boat was going over to get the ice another boat took several of us ashore for a few minutes and we cast there and caught some sea salmon. It was a real thrill for us, and a thrill that one of our members will never forget. He was standing there fishing and looking up and there was a big Kodiak bear standing up in front of him. Well, he had violated what they had cautioned us against, "Don't you ever get away from one of the guides." And number two was, "Don't yell." He had violated both of those. He'd dropped his pole and yelled. He had roamed off from the guide, but no casualties, we had a very interesting trip.

We got back about 12:30 that night and went to the hotel and at 8:30 the next morning we left for the airport. During our enthusiastic

[1357]

visit and talk Governor Gruening talked himself into an invitation and to go along with me because we were coming back though Honolulu and he wanted to talk statehood there and see how they were progressing. So, as a result of it, we picked up two guests there: Mayor Talbot from Ketchikan and Governor Gruening of Juneau joined us for a part of the trip. They both wanted to stop in Honolulu, so we left them there working with some of their friends.

So, we got away from Juneau about 9:10 and headed initially for Adak Island. But we were slowed by the weather and we had some very severe icing that slowed us considerably – passed over Adak about 2 o'clock and as we couldn't land there we proceeded on west. Finally I received a message from the pilot -- the weather had closed in on us and "We are going to land at the first safe landing place that we can

[1358]

find. We can't tell you right now exactly where we will set down." But as it turned out, we got into Shemya where they had a right good airport; where we were able to refuel and went on to Attu, where one of our loran stations was located. We refueled there, inspected the Coast Guard installations and then had dinner. There was some further weather holdup but we finally got away about 12 o'clock that night.

Between Adak and Attu we crossed the International Date Line and lost a day. All this that I am telling you about was going on on the fifteenth of November. We left Juneau on the morning of the fifteenth and so we lost the sixteenth when we crossed the International Date Line. And at 7:25 a.m. on November 17^th we landed in Tokyo. We were met at the airport by General MacArthur and his party. He gave me a very nice welcome and greetings to all of

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our crew. He made a statement to his aides and commanders that were with him that he wanted every possible courtesy shown us and to furnish us with all the information that we asked for. The airport is over in Yokohama, so we drove from Yokohama into Tokyo and proceeded to the residence of General MacArthur where I was a houseguest during my visit.

Now, I'm going to ask you at this point to forego any discussion of my visit in Japan and proceed in Manila. We'll come back, possibly, on our next interview and pick up Japan. I have not been able to locate some of the notes that I want to have to enable me to give you a fuller story of our visit to Tokyo which I considered very, very important.

HESS: That will be just fine.

SNYDER: Well, we got away from Tokyo at 7 o'clock

[1360]

on the morning of April 20th and arrived in Manila after flying over Okinawa and Formosa. We arrived in Manila at 1:40 p.m. on November the 20th. We went immediately to a hotel where we met with a number of officials including the aid to our Ambassador -- his military aide -- and checked on some of our programs in order to get them lined up quickly, as we were a little late in arriving. We got our programs all settled as it was decided that we should put as much business into our short stay as we possibly could. My first plan was that I would stay at the naval station at Sangley Point, but enroute that decision was changed. Ambassador [Myron M.] Cowen was in the United States but he had flown especially back and arrived the morning that we got there, and so it was determined that Admiral O'Neill and I should stay at the Embassy residence. The problem was that there had been

[1361]

some little unrest and one or two demonstrations. The Ambassador felt that it would be much better if we were with him in the security of the residence instead of working back and forth from Sangley Point. To get the trip off to a good start and so we could talk intelligently, we were immediately taken on a tour of the city to get a quick view of the damage that had been done, what rehabilitation was in progress, how the city was functioning under the reconstruction and rehabilitation phase. We must recall that Manila had been under occupation, which left a great many problems for solution, including weeding out the infiltrators who had elected to stay. There was a real question of security of the island that they were concerned about, although this was four years after the war was over. They were still having trouble in the hills. There were sorties in the outposts,

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pillaging operations and so forth. So we took this trip around and I had pointed out to me the highlights of the city. Manila's a rather large city. And there had been, in certain sections, some very severe damage in the early days when the Japanese were trying to take the city. Of course, after the Japanese got in there was very little damage done, but there had been very little reconstruction done during their occupancy.

HESS: Were they having any trouble with the Huks [Hukbalahaps] ?

SNYDER: Yes, they were the people from up in the hills, I mentioned them. Yes they were the ones that they were really concerned about. Then we went out to Sangley Point and had a buffet dinner with Rear Admiral Francis P. Old, who was in command of the naval operations in Manila.

[1363]

HESS: O-L-D-S?

SNYDER: O-L-D. Francis P. Old, Commander, U.S. naval forces in the Philippines. He briefed me that night pretty thoroughly on the general defensive situation and was extremely interested in what the attitude in the United States was regarding any constant rumors that there was trouble in Korea. We had troops in Korea as we know. And we had a task force that was operating out of his base there in Okinawa that were patrolling the waters along the coast of China. And...

HESS: Did they think that the trouble was going to come in Korea?

SNYDER: Well, they didn't know. They just heard rumors. I had already passed through Japan and had had some thorough briefing. That is why I'm very anxious to get my Japan notes to

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get them accurately into the record here. I had been somewhat reassured in Japan that they did not think that the Chinese would ever take an active part with the North Koreans.

HESS: Who reassured you?

SNYDER: Well, some of the...

HESS: General MacArthur?

SNYDER: Some of his people. I'll get my notes and then I can...

HESS: All right.

SNYDER: Then I can quote...

HESS: But did they think that there was going to be trouble from the North Koreans?

SNYDER: Well, they didn't know. They felt like -- well I'm getting back into Japan again.

[1365]

HESS: We'll cover this later.

SNYDER: I had that in mind to tell you about what I heard at the briefing. We then went back to the Embassy and spent the night. After an early breakfast the Ambassador began to bring people in to discuss various matters with me. Among them were two officers of the Philippine War Damage Commission, John A. O'Donnell, and Francisco A. Delgado. They had a most interesting story to tell. Those two men and the Ambassador gave me quite a briefing on the economic situation in the Philippines and I learned what I was very anxious to learn, the attitudes of the Ambassador and of our various representatives -- U.S. representatives. They felt strongly that we had to give real aid to the Philippines, but at the same time they felt that we should do so with great caution and very careful supervision of the expenditures of the aid.

[1366]

The war damage people had done a splendid job of assessing the possible damage from war activity and they too wanted to be fair to the Filipinos but at the same time there had developed quite a few attempts to overstate claims and a lot of non-deserving claims had entered into the picture about which they were really concerned. There had been a tremendous amount of looting and pilferage. In a sense it was amusing and yet it was rather tragic at that. The streets were just filled with jeeps. These jeeps had little canopies, four posts and a little canopy over them and were used as the taxi cabs -- the jitney busses. They were brightly painted with all sorts of psychedelic hues, and each one of them had a girl's name on it -- the name of the jeep. And everybody knew from the Ambassador down, that they had been stolen from different depots and that nothing

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was done about it. A large amount of arms had also been stolen which they thought was where the Huks got their ammunition and their arms, from pilferage out of some of these inadequately guarded arsenals.

HESS: One question on the Philippine war damage claims. Just where did most of the claims originate or from what occurrence did most of the claims originate?

SNYDER: Bombing.

HESS: Was this when we bombed the Philippines?

SNYDER: We didn't do much of the bombing. The bombing -- you mean when we...

HESS: When we went back in and retook the Philippines from the Japanese. There was some shelling.

SNYDER: We did some shelling. Our action was

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largely though bombing of Japanese crafts in the harbor.

HESS: And military installations.

SNYDER: And military installations.

HESS: Just how did most of the claims originate?

SNYDER: Well, the claims came from bombing, from explosions, from sabotage. There was a great deal of sabotage when it looked like the city was going to fall, the Japanese were pretty rough about sabotage before they actually pulled out. So, I'd say it came from both shelling in taking the city and from the bombing -- shelling and bombing by the Japanese -- and then some of the shelling when we retook it and then the deterioration and damage that was done during occupation. A very careful analysis had to be made of each claim, to

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see whether it was genuine and met to the rules that were set up for the claims for war damage.

HESS: Did you ever hear the story that there were certain businesses, certain installations in which General MacArthur had a financial interest that were supposed to be exempted from shelling when the United States was retaking the Philippines?

SNYDER: Oh, there were always a lot of rumors going on. I...

HESS: Is there any truth to that one?

SNYDER: I have no proof that that really happened.

Then during the morning we discussed aid, and war damage. They said that we should by all means increase the funds available for these claims, but keep a tight rein on the expenditures. And then some of the banking group came in. After the war, with the installation of the

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independent government, the whole banking system was changed in the Philippines and they set up a central bank which was government operated, something like our Federal Reserve Bank, and then they had the Philippine National Bank which was actually government owned and operated. But it had about sixty-three branches throughout the islands and was really the big commercial bank. The Central Bank was a bankers' bank. The Philippine National Bank was the commercial bank and then there were about eleven other private banks. Some six of those were branches of foreign banks. There were three European banks, two American banks, and one South American bank from Argentina. And there were three or four other local banks, a total of about eleven other than the Philippine National Bank.

That day was the twenty-first. I had had a visit that morning, then a lunch was given

[1371]

for me by Secretary of Finance Pedrosa and the Cabinet officers. That only lasted until about 4 o'clock, and I got to quite a story of the problems they were having with the United States that..

HESS: What seemed to be their major problem?

SNYDER: Just trying to feel their way around. The independence produced growing pains, and they thought we were keeping rather tight reins, and they wanted more independence, immediate independence, in finance and in many of the questions that were coming up regarding American ownership of large companies, and they were feeling that they should have greater elbow room. There was a peculiar thing that developed during my visit. I may read an excerpt here in a minute that was a little unnerving at the time, which showed an attitude on the part of a great many of the Filipinos that the

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United States had actually been detrimental to them in their economy and their industrial growth during the time that we were running the country.

HESS: Why did they think so?

SNYDER: I'll get into that in just a few minutes. So after we sat there and talked with Secretary Pedrosa and one or two others that were present, Secretary of Commerce Carnelio Balmacido and also the Governor of the Central Bank Miguel Guarderno, I told them what we had done in Japan and what the Treasury had done, how we had sent this cadre of experts to work on the tax -- set up a new tax system for them, legislation for revenue and a revenue collecting department. They were very intrigued with it and before I left I agreed to see if I couldn't get Harold Moss, who was in charge of the

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group in Tokyo to come down to Manila and spend a few days talking with them after they finished the Tokyo job. And he subsequently did. They were highly pleased with the help that he gave. He took a man down with him and stayed three or four days going over plans for them.

When we first arrived at the hotel we went to a small luncheon, after which I made a statement for the press. Then I made another final press statement before I left the city. At 5 p.m. on the twenty-first I had a conference with the President. The President's name was Elpidio Quirino. That was where I ran into some rather interesting problems. In my visit with the President, as I just mentioned, I ran into some rather interesting reactions, some of which I had been prepared to hear, by Ambassador Cowen. The President was rather

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cock-sure of himself and was feeling his weight of office and while friendly towards Americans in his statements, he was extremely critical and questioned many of the attitudes of the Americans. And the President said that the Philippines had a program of total economic mobilization and he gave numerous examples of the progress they were making in reference to the production of rice and opening up new rice paddies through irrigation and the construction of new government buildings. Many of the government buildings had been pretty badly damaged. They had a plan for new road systems and for new schools. From this economic mobilization, as the President seemed to enjoy calling it, you got the impression that all they were trying to do was to dress the wounds of the war and patch up here and there and that there really had not been a well-rounded out economic program formulated. His

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refrain was that more aid was needed from the United States to make a success of any program that they might undertake. The Governor kind of waved his hand and said, "Oh, we'll have to have sixty million next year, a hundred million the year after that, who knows it may be two hundred and fifty million by 1952." He said that import and credit controls that had been set up were only temporary and that what they really needed was more production. They needed some factories, they needed some operations there for employment and then, strangely enough, after saying that the import and credit controls were only temporary and so forth, he came back and said rather pointedly that he may find it necessary to impose very strict exchange controls and import controls from items from the United States and that it might be necessary for him to do that immediately. And it might even

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be such a drain on the Philippine dollar, that it might have to be done in the next few months. I thought that was rather an affront. It looked sort of like he was trying to blackmail me. I'd been the first non-military U.S. official visitor to the island and the first monetary, fiscal, financial minister and it struck me that he was trying to exert a little pressure on the situation. And in addition to that he was trying to inject some trading points. You see we had planned and had already drawn up a treaty of friendship, of commerce and navigation, and they were stalling on signing that treaty, and getting it operating. We also had agreed on a conference on taxation. I had already touched on that, so I was able to tell him that I had agreed with his Secretary of Finance Pedrosa that I would try to send technical advice down to him through

[1377]

Mr. Moss. At this he kind of shrugged, he said, "Well, of course, we'll listen to your advice, but we have experts here." And with that Pedrosa, who was present, kind of looked up and cast his eyes up to the ceiling. He was a very, very able man and had a rough time trying to get things on a sound basis.

HESS: Pedrosa was, is that right?

SNYDER: Pedrosa. But I gather that the program of economic mobilization had only made very slight progress and certainly the idea of self-support had not entered very strongly. Their main idea was to call on the United States for all the aid that would be possible for them to get from us.

HESS: Why were they just a little lax -- just a little weak -- in the idea of self-support?

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SNYDER: Well, it was a new thing to them. You see, they had only been made a republic a short time before we turned the reins over to them. And they wanted...

HESS: July 4, 1946, is that correct?

SNYDER: Yes. So you see only three years had gone by and they were just learning responsibilities of politics in a way, and they wanted to be popular with their own people. And they kept bringing up the point that we must remember that the Philippines was an undeveloped country and the United States was a highly developed, industrialized country which caused me to feel like that he was again bringing in a little blackmail. His conversation bothered me a great deal, for it did look like he was putting a real effort back of the effect that his statements were making. I wasn't too sure by

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the time I left, whether we were going to have a signing of the treaty of friendship or not. It appeared to me that as long as Quirino was going to be in office that there might be some problem about any self-supporting effort being made. I was rather shocked to see the attitude of the President in implying that his people felt the United States had not prepared the Filipinos for independence in the proper manner, that they had shown great growth and development under Spanish control, and that they were really a progressive growing nation until the United States took over domination; that actually they had stood still or had regressed in growth and development during the United States occupation, and that therefore, it was incumbent upon the United States, and it was a duty of the United States, now that we had cut them loose, to come through and help them in a very material way since the U.S. had let

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the Japanese invade them and cause great damage to them economically; that that was all the fault of the United States and that therefore they were going to look to the United States very positively for material help.

HESS: How did that attitude of his set with you?

SNYDER: Well, it didn't set too well with me at all, because I had my own ideas, and I pointed out that from the figures that they gave us some 80 percent of the exports consisted of three commodity categories, coconut products, sugar and hemp, of which 65 percent were in coconut products, and heavy reliance upon imports of manufactured goods, raw materials and food continued with no effort to overcome by domestic development. "If you want something, order it from abroad," seemed to be the policy. The official dollar balance had

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declined from four hundred million in January, and here it was near the middle of November and they only had about two hundred and fifty million left. And from their conversation, it looked like they were looking for still further dollar reserve decline.

There was another important fault in the program as they had presented it to me. Their private investment initiative was extremely weak and local capital would insist on very powerful inducements in high interest rates. It was to be diverted from its custom of financing realty and foreign trade and begin engaging in a myriad of unproductive lending activities. They were productive of high interest rates, but not productive to the economy of the country. On the other hand the government's approach to investment, with some exceptions, was either to make loans of a businesslike character to

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private borrowers or to build and own new investment projects owned by the government. Neither approach promises that private capital would undertake any far-reaching investment jobs and the government just wasn't going to because it didn't have the money. So to afford some encouragement and protection to local industry, they were going to have to set up a well-designed financial policy in the country which would have the wholehearted and sympathetic support of the government, because, as I said, the Central Bank was government controlled and the Philippine and the Philippine National Bank with its sixty-three branches was government controlled. They were going to have to take that stand and show that loans could be made and dress the loans up in a fashion that would attract local investment participation. There had been quite a flight of capital by the richer

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Filipinos prior to the Japanese invasion and there had been very little of it brought back. Most of it was in Europe and some in America. So accordingly, I stated there:

Governmental financial policy in respect to measures for achieving the goal of self-support needs to undergo definitely a two-fold change. First the amount of funds made available for the purpose should become the most important single item in the government's fiscal operation. And second, the governmental outlays, and in fact all relevant governmental policies, should be more positively designed to attract the flow of private capital back into the country and into productive enterprise.

I left the conference on that note. And there was a great deal of handshaking and friendliness and so forth, but I could see that they had not obtained the reaction from me that they had hoped to get, "Just tell us what you want and we'll get it for you."

HESS: At the time that you were in the Philippines

[1384]

was there any talk of expropriating American industry there?

SNYDER: No, no, not at that time, because it was very small. Then following that conference we went to dinner at the Embassy. Ambassador Cowen gave a very nice dinner. He was just back from the United States so he seemed rather anxious to get people away because he wanted to do some more talking. But we had a pleasant time. The President came and I would say it was largely social.

The next morning at 8 o'clock we got an early start. At breakfast you could see that Mrs. Cowen was extremely kind in permitting the Admiral and me to have breakfast without disturbing the household and get on our way because we were picked up at 8 a.m. and went on our inspection trip of the Coast Guard installations which took up most of the morning. And at 1 o'clock

[1385]

the Central Bank and the commercial bank officers gave a luncheon for me. It was largely a discussion of fiscal matters. They wanted to know how we managed our debts and how we went about getting tax legislation and all that sort of thing. That took up most of the afternoon. We didn't get started until one and by the time lunch was over in a rather Latin atmosphere, it was 2:30, and then we got into a conversation that lasted until nearly 5 o'clock. Then Secretary Pedrosa gave a cocktail party, and that was largely social too. He said, "They are working you to death, I want you to relax."

I said, "Well, you ought to get some of these things solved, and then I wouldn't have to work so hard."

Well, anyway we had a pleasant time there and his wife was extremely cordial and they had

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invited in a number of our U.S. people from the Navy and from the Army. We had a very delightful cocktail party and then from there were went to dinner at the President’s. The President gave a state dinner that night which was very formal and large and long and drawn out. And so I say that, too, was largely a formal, social evening.

The next morning, we really got an early start because we were going over to Hong Kong. We got up and left the house at 7 a.m. We arrived in Hong Kong about ten, and immediately took a little tour around the city. We went up on the rock and it was very fascinating -- did a little shopping and then at 12:30 Sir Alexander Granthan, Governor of Hong Kong, gave a luncheon for me. He had the American Consul General Earl Rankin at the luncheon, and so they had an opportunity of telling me

[1387]

about Hong Kong, the history of it, how the British had been able to come in there and establish a trading point and had maintained a relationship with the Chinese through the year and were able to continue it under the Communists because, as he smilingly said, "This is of greater value to the Chinese really than it is to anyone else, because it gives them a listening post and it gives them a good chance to feed their products out into the world. They move them here and then repack them and ship them out as Hong Kong products and British products. And this is just the open door for the Chinese." And he went on to tell me about the confidence the British government had in the longevity of their relationship in keeping control of Hong Kong and Kowloon. As you know, Kowloon on the mainland is a part of the concession to the British and it runs about fifteen miles

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north and south and two or three in depth east and west. He told me then and as I made a recent trip over there about five years ago, I could see that it was still the case, that there's a tremendous amount of investment that has been pouring into that area. They were building huge apartment houses, office buildings over on the mainland. Factories were coming in there, assembly plants for automobiles and all sorts of electrical plants. And there seemed to be no question in their minds but what they would be able to continue. I learned from him later and confirmed it on my last trip that they operate on a cycle of about five years, and the money that is coming in there is flight money largely that might get absorbed in taxes if it stayed at home, and it's risk money actually and they just think that if they get there and get a few years' run on it they will

[1389]

get their money back; and if it goes on longer it's all to the good. Of course they are relying pretty heavily on the history of the operation of Hong Kong and it's been stuck right there so long in Communist hands as it was in Chinese. The Chinese used to threaten to take it over pretty regularly but they never did. And they have a lethargic attitude towards any thought that there might be a takeover now. And they about convinced me that they really believe it or people wouldn't keep pouring outside money in there for all this construction work that is going on. They have some very fine hotels in -- over on the rock -- on the island as well as the very, very nice ones that are just being completed over on the mainland. I was delighted with that little visit I had and about 4:35 we started back for Manila and arrived there about 8:55.

Oh, I might tell you about the inspection

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trip that I told you that we made on the morning of the twenty-second. We left Manila International Airport and flew over to Subic Bay and from there up to Clark Field, which was our large air base there, and from Clark Field over to Naulo Point, that is a Coast Guard station and loran station. Then we went on up further to Santa Cruz where we have another Coast Guard station. Then we came on down the island and came in and landed and went into Corregidor and examined that whole layout there. And from there we came back into Sangley Point and back into the airport. That was the Coast Guard inspection trip that I mentioned, I thought that this would kind of highlight it a little.

We had the press assembled there when we got back from Hong Kong, and I made this statement as I was leaving which, with your

[1391]

agreement, I will just read into the record. It somewhat sums up the trip.

In leaving the Philippines this evening, I am taking with me the warm impression of an extremely cordial and hospitable people. I've been deeply impressed by the fortitude and determination with which the people of this country face the tremendous problems involved in rebuilding and developing their nation.

During my brief visit I've had the opportunity of talking with your President and members of his Cabinet as well as many other people both in and out of the government. And through these talks, and my sightseeing trips by car, as well as by air, I have learned at first hand something of the highly commendable progress already made in the rehabilitation of your war devastated country. Although much has already been accomplished much still remains to be done, and the concerted effort of all of your people will be required in this tremendous endeavor.

In my trip to Hong Kong today, I flew over a large part of central and northern Luzon. I was greatly impressed by what I saw from the air of the rich, natural resources with which your country has been so abundantly blessed and I hope that the fullest possible use may be made of your fertile lands to the end that your country may soon again assume

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and take self-sufficiency in the production of its necessary food stuffs. From what I have seen and heard, it appears quite clear that the Philippines possesses the resources from which it can develop a strong and sound economy. In this connection I have been pleased to learn that brave plans are in the making for the agricultural and industrial development of your country. I hope that those plans will be aggressively carried forward by those in charge.

While the official objective of my trip has been to inspect, with Admiral O'Neill, the Coast Guard installations of the United States in the Pacific, I have taken advantage of my presence here in your country to become more intimately acquainted with your present economic problems and to learn something of your government plans to meet these problems.

I was particularly interested in the plans which are now being developed to formulate and implement a balance of payment program and plans to create a favorable atmosphere for both domestic and foreign investments. I am certain that with the demonstration of maximum self-help and the prompt completion and the implementation of the plans presently under consideration by your government, your nation's opportunity for advancement is most encouraging. In this connection, may I again express the earnest hope that the efforts of all of your people will be directed towards this desired end.

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The deep interest of the United States in your security, your growth, and your prosperity has been of a long duration. It's been of such a long duration as to require no further comment by me at this time. I do want to assure you, however, that my government will most certainly continue to hold a vital interest in the welfare and further growth of this country. It must be remembered, however, that the people of the United States have had long and heavy demands on their resources during and since World War II and that future aid must be measured in terms of its productive effort in bringing about economic stability and peace wherever such aid is supplied.

Ambassador Cowen is, as you already know, warmly sympathetic to the people of your nation and to your problems. He has meticulously informed himself on the problems and possibilities of your country, and has conveyed his impression to me. Fortunately, he has just returned from the United States, and is, therefore, currently aware of the thinking and the policies of our government on Philippine affairs. I know that he will continue to earnestly endeavor to counsel and make personal efforts to assist in the cooperation of our two nations.

Again, I want to thank all of you for being cordial to me and giving me so much information in the few hours that I have had the privilege of being with you.

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Immediately following the press conference we left Manila at 9 p.m. on the night of November 23rd. On the morning of November 24^th at 4:45 we arrived at Guam. Even though it was early in the morning we were met by Governor Carlton Skinner who was appointed by the Secretary of Interior as the Governor for that area. We had a short nap and showered and had breakfast with the Governor and then we went on an inspection trip of the Coast Guard installations in Guam. There are some very important ones there and they were sort of keyed to our Pacific operations.

To show you the flexibility of this system, when they had a very bad storm come through there, the typhoon had blown out one of the legs of the loran station about ten days before that, but by the time we got there they had that reinstalled and in the meantime had

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set up a temporary buoy operation to help them continue operation while they were repairing the damage, which proved the versatility and the adaptability of the people that we had there. That was one thing that I want to mention just as we come to a close a little later about the fine work and how pleased I was with the caliber of the people that we had representing us in the Coast Guard around the Pacific.

We left Guam at 10:20 and I picked up another passenger there, Governor Skinner, who asked to come back to the states with me as he had just been summoned back by a committee of Congress. So I picked up another passenger there and brought him along with us. We arrived at Wake at 9:45 and I was met there by Mr. T. D. Musson of the CAA who was in charge of operations. We made a hasty inspection of

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the Coast Guard installations there and then had dinner and talked with quite a number of the people who were on the island. And I must say that it is a fascinating experience to come in to Wake at night when there is just a little dot of light in that great big ocean. It was quite a thrill to be able to navigate right in on the spot, which gave us a great feeling of confidence toward the operational qualities of loran.

We departed Wake at 10:30 and we picked that day back up again because while we had spent the twenty-fourth in Guam and Wake, we now woke up the next morning on the twenty-fourth in Honolulu and I will tell you that that was one time that I had three Thanksgiving dinners. That was a real Thanksgiving. On the twenty-fourth we had Thanksgiving dinner in Guam, we had another in Wake and then Governor

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Ingram Stainback was prepared and had one ready for us when we got into Honolulu. That was one time that I had three Thanksgiving dinners.

Governor Ingram M. Stainback met us at the airport and arranged to have me as his houseguest at Washington Place, which was the Governor's mansion. Ed Pauley owns a lovely island, Coconut Island, on the north side of Oahu, so he had arrangements all made there for me to come out and spend the night. So we, after visiting with the Governor, and talking with quite a number of people he brought in to discuss statehood, we went over to the island. The people the Governor had in were very enthusiastic, they were puzzled too about the tax problem and the income problem and how to get organized for statehood but I think that they were even more enthusiastic probably than they were in Alaska.

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We got back the next morning and made our inspection trip of the Honolulu installations and went to a couple of other islands by air and saw the loran stations and the other Coast Guard installations. That morning we had luncheon and I made a speech at the Chamber of Commerce and was pummeled with many questions regarding statehood. At the luncheon all the speeches were regarding statehood.

HESS: What seemed to be their idea on statehood?

SNYDER: They were very enthused, more so than in Alaska. That afternoon after lunch we made a tour of Pearl Harbor and it was extremely impressive what we saw of the ships that had been damaged. You know, of course, they made the Arizona into a national memorial. I was told that some twelve hundred of the crew were still buried with the ship. Several of the other

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battleships, or their masts are still standing out of the water, but most of them have been salvaged.

On this trip around the harbor I was a guest of Admiral E. Gringrich, the Chief of Staff of the U.S. Pacific Fleet at Pearl Harbor. We finished our tour and had dinner with Governor Stainback. We left the next morning at 9:55 a.m., arriving in San Francisco on the twenty-sixth of November at 9:50 a.m.

HESS: Fine.

SNYDER: That is about the story except for Japan.

HESS: That's right.

SNYDER: And we'll pick that up...

HESS: We'll get that next time.

SNYDER: Yes.

[1400]

HESS: Fine, thank you very much.

SNYDER: That took longer than I thought it would, but I hope that's been of some value and of some interest.

HESS: Very good.