Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

451. Memorandum of a Conversation, Manila, June 15, 1960, 9 a.m.¹

US/MC/1

Manila, June 15, 1960, 9 a.m.

PARTICIPANTS

• US
  • The President
  • Ambassador Hickerson
  • Mr. Hagerty
  • General Goodpaster
  • Mr. Parsons
  • Mr. Koren
• The Philippines
  • President Garcia
  • Secretary of Foreign Affairs Serrano
  • Secretary of Finance Aytona
  • Secretary of Defense Santos
  • Press Secretary to the President Nable
  • Ambassador Romulo

SUBJECT

• US-Philippine Relations; Communiqué; Air Agreement

President Garcia opened the conference by saying that they were very pleased that President Eisenhower had honored them with an opportunity to discuss certain matters concerning Philippine-U.S. relationships. He said that a draft communiqué had already been prepared and agreed to in principle by both sides and suggested that it might be used as an agenda. President Eisenhower inquired whether the communiqué contained a reference to the petition he had just received from ex-President Osmena² and the answer was that it did not.

Ambassador Hickerson said that he and Secretary Serrano had exchanged views on the communiqué. There were certain points on which no final agreement had been reached and he suggested that consideration of the communiqué might be postponed until these points had been ironed out. President Eisenhower said that he would be interested in seeing the draft communiqué, whereupon Secretary Serrano read a draft which he said contained both Philippine and U.S. proposed wording.

President Eisenhower said that in general construction and content it was the best draft communiqué he had heard. It was one which was not afraid to speak up and say exactly what was intended, and was not as generalized and meaningless as some he had been offered at other times, which he had refused to accept. He questioned one point in the draft where (in numbered paragraph 4) it spoke of a need for closer military cooperation and planning. He did not like the use of the comparative, i.e., closer cooperation. He said that there was continuing need for close cooperation and planning and need for modernizing and keeping efficient the Philippine Armed Forces, but not need for better cooperation and planning. In this connection, he spoke of the impossibility for him to pledge the U.S. to anything that might be binding over a number of years, which Congress might possibly change. In terms of the necessity of the two countries doing things together, he was in 100% agreement.

With reference to the point on solving the base problems, particularly jurisdiction, he noted that the U.S. had treaties governing these questions all over the world, and said that the Philippines should always have equality in these matters. The big country should not dictate to the smaller, but neither should the smaller use the big one as a whipping boy. In his opinion, the U.S. and the Philippines should talk over their problems in a good over-all atmosphere. He also noted that the U.S. receives communications from all quarters and there isn’t one that does not get the most sympathetic study.

President Eisenhower went on to say that the communiqué did not mention the problem of the air agreement.³ In this respect, objectivity was needed to see what the problems were, and to solve them. With President Garcia, he stood ready to attempt to settle these problems in complete fairness to both sides and thereby achieve a better atmosphere. He said that as far as the U.S. nation and people were concerned, a treaty which the U.S. has entered into becomes the law of the land.

Ambassador Hickerson suggested that he and Secretary Serrano go over the suggested draft and make whatever small changes appeared to be advisable, at the same time not weakening the language which had been read.

President Eisenhower said that he understood the communiqué would be issued Thursday night,⁴ and this was agreed to. He said that the communiqué could be made as strong as the drafters pleased within the limits already set, but that he would not quarrel personally over the detailed wording.

President Garcia expressed his appreciation that President Eisenhower had opened his heart in stating his views. Referring to the air agreement, he said that it was a question of capacity and what they were asking for was merely enough for them to survive on. President Eisenhower said he was not quite sure of the exact details of what the Philippines were asking. Normally the U.S. made a basic agreement, and specific detailed accords stemmed from that.

Secretary Serrano said that the Philippine position could be simply stated as asking for a stated reasonable proportion of capacity and frequency which would allow their operation to survive, whereas the U.S. position was for unlimited competition. The Philippines were ready to arrange for mutual consultations after the agreement had been operative five years.

President Eisenhower outlined his understanding of the routes the Philippines desired, but Ambassador Hickerson pointed out that negotiations thus far had not reached the question of routes, but only the matter of capacity proportion, which the Philippines desired to be 50% for each. Ambassador Hickerson noted that this proportion would cause a reduction in the present U.S. air transport business in and out of the Philippines.

President Eisenhower said that the U.S. traditionally never wanted to be a party to a cartel such as proposed in this arbitrary division of business, and this aspect was, he felt, probably the reason for the U.S. attitude in the talks. He said the U.S. would be willing to take a look at this question and perhaps some sort of gentlemen’s agreement, but not a cartel, might be reached which would meet the situation. He said that the U.S. would look at the question very sympathetically and earnestly. The U.S. had no intention of starving the Philippines, but, on the other hand, wanted the country to grow and prosper. He then spoke of the continuous nagging at the U.S. that certain countries employed with regard to air traffic in their desire to get a piece of the rich U.S. market. It was extremely complicated to adjudicate the question in fairness to all parties.

Secretary Serrano noted that the Philippines had hoped to have preliminary discussions which he felt were necessary to a proper solution of the question, but the U.S. had insisted that the talks be opened formally. President Eisenhower thereupon stated his agreement to the holding of preliminary talks, and directed Assistant Secretary Parsons to tell Secretary Herter of his decision, and that the talks could be either in Washington or Manila. Secretary Serrano said he hoped they could be in Manila because of the expense of sending a Philippine group to Washington. The President indicated no disagreement.

President Eisenhower said he imagined that if there were two choices of air travel, the Filipinos would probably want to go by Philippine Air Lines and PAL would thereby have a more or less guaranteed market. Secretary Serrano answered by saying that the greater portion of the traveling public came out of Tokyo or the U.S. and therefore PAL would be at a disadvantage if they did not have pick-up possibilities in those two places. The President asked if this meant that a negotiation in Tokyo was also required, and when told that it was, he commented that this made the matter very complicated indeed. Ambassador Hickerson said that when a new airline is established in a country, the government of that country normally subsidizes it in whole or in part. President Eisenhower asked if PAL was owned entirely or in part by the government and was told the government owned 54%. President Eisenhower then inquired whether PAL was presently running profitably, and Secretary Aytona answered that it was, very profitably. President Eisenhower said that air transport was a very expensive business and the Philippines should always keep this in mind. President Garcia answered that they had studied the matter very carefully and had come to the conclusion that they could do it and make a profit.

Ambassador Hickerson suggested that the U.S. might be in trouble if it made an entirely new type of agreement with the Philippines, thereby setting a precedent. President Eisenhower replied that he had never been and never would be frightened of making precedents. He noted that each country was in a completely different position and, while he wanted above all to be fair, he could not, of course, place our whole air transport scheme in difficulties. In regard to our relations with the Philippines, the U.S. would never put the Philippines in any position secondary to other nations. In fact, the Philippines had always enjoyed “most favored nation” position, and some times it seemed even higher than that.

The conversation then returned to the communiqué, and President Eisenhower said that there would be no need for a further meeting on it, if, after further study, there appeared to be no residual differences.

With regard to informing the press, it was agreed a statement would be made saying that at the conference there was an informal discussion of the air agreement and of a draft communiqué. President Eisenhower requested it also be said that the meeting was held in an atmosphere of informality with casual conversation between friends, even though problems of the utmost importance were actually discussed.⁵

1. Source: Department of State, Conference Files: Lot 64 D 559, CF 1691. Confidential; Limit Distribution. Presumably drafted by Koren. The source text indicates the conversation took place at the Malacanan Palace, President Garcia’s residence. President Eisenhower visited Manila, June 14–16, as the first stop on his Far East tour.
2. Sergio Osmena, Sr., Philippine President, August 1944–May 1946, presented an aide-mémoire concerning certain claims of Philippine veterans. (Ibid., CF 1705)
3. See Document 453.
4. June 16.
5. A joint statement was issued in Manila on June 16; for text, see Department of State Bulletin, July 25, 1960, pp. 132–133.