I resigned from the Government in 1903 and became a member of the law firm of Coudert Bros., New York City, which had established an office in Manila, P. I. That firm withdrew in 1906, and I continued the practice of law there until the middle of 1915, when I retired from active practice to look after my business in the islands, acquired in the meantime.

At the present I am president and general manager of Benguet Consolidated and Balatoc Mining Companies, the head of The Heald Lumber Co., and President of The Peoples Bank & Trust Co. of Manila. My mining companies employ altogether about 10,000 Filipinos. Incidentally, permit me to say that, although my companies had employed labor since 1903, during all of that time, we had nothing in the nature of labor trouble in any of our institutions. We consider ourselves a very happy, contented family, of which I consider myself the head, with both a legal and a moral responsibility to look after the welfare of those who are engaged with me in the pursuit of our business. Our institutions have been a success. Perhaps it is just as well for me to say that, notwithstanding the fact that it has been successful from a worldly standpoint, we have maintained good will there, we enjoy the respect of all the Filipino people including the government officials, and the business community, the laboring element; and I think I can safely say in the presence of the vice president and other members of the Philippine government, that we are looked upon there as a real, genuine asset to the Filipino people and the Philippine Government.

If I followed my own personal inclination I would not have appeared before this committee. I was here, attending practically every session, heard the various statements made, and realizing that I was not an economist and seeing that practically everything was being more or less discussed from the dollars-and-cents standpoint, I thought-well, what is the use, nothing that I can say about this would be of any material interest to the Senators.

But when I realized that I lived over there for 40 years, and that the people in the Philippine Islands knew, in general, my views, the thought occurred to me that they, knowing that I was over here in Washington when this matter was being discussed, might feel that perhaps here was an opportunity for me to express myself to the men who were charged with the duty of safeguarding the welfare of 15,000,000 Filipinos, Christian Filipinos, not counting those that are yet unborn. Accordingly, I felt that possibly I would not be doing my full duty to the Philippine people if I did not express myself before you.

The gentleman who just preceded me lends me courage, and I am going to speak frankly.

I think that during the whole 40 years we have been in the Philippines we have had a complicated problem. We had not had any experience as colonists, but this great Nation had a desire to do what it thought was fair and just to the Filipino people, and those of us who went over there with muskets and remained there couldn't help but feel, in the course of time, that after everything was said and done, we were there in a dual capacity, first, to look after our own personal interests, and, secondly, in doing so to recognize the fact that we were there as American citizens. We had an obligation as loyal Americans

to conduct ourselves among those people in a way that would reflect credit and not discredit upon the great American Nation.

There are intangible matters involved that I think we are apt to overlook in this materialistic age, and in order that you may understand just exactly what I mean, I am going to take the liberty of reading a statement that President McKinley made in 1899, in November, in connection with the decision reached by him on the troublous question of what to do with the Philippine Islands. I am quoting from the Christian Advocate:

It was a difficult decision for President McKinley to make. The high Christian attitude which he took is revealed by an interview he had with a group of clergymen on November 21, 1899, as reported in the Christian Advocate. Speaking to these ministers, President McKinley said:

"The truth is, I didn't want the Philippines, and when they came to us, as a gift from the gods, I did not know what to do with them. When the Spanish War broke out, Dewey was at Hong Kong, and I ordered him to go to Manila and he -had to, because, if defeated, he had no place to refit on that side of the globe, and if the Dons were victorious they would likely cross the Pacific and ravage our Oregon and California coasts. And so he had to destroy the Spanish fleet and did it. But that was as far as I thought then.

"When next I realized that the Philippines had dropped into our lap, I confess I did not know what to do with them. I sought counsel from all sides-Democrats as well as Republicans—but got little help. I thought first we would take only Manila; then Luzon; then other islands perhaps also. I walked the floor of the White House night after night until midnight; and I am not ashamed to tell you, gentlemen, that I went down on my knees and prayed Almighty God for light and guidance more than one night. And one night late it came to me this wayI don't know how it was, but it came:

"(1) That we could not give them back to Spain-that would be cowardly and dishonorable;

"(2) That we could not turn them over to France or Germany-our commercial rivals in the Orient-that would be bad business and discreditable; "(3) That we could not leave them to themselves * * *; and

"(4) That there was nothing left for us to do but to take them all, and to educate the Filipinos, and uplift and civilize and Christianize them, and by God's grace do the very best we could by them, as our fellow men for whom Christ also died. And then I went to bed, and went to sleep, and slept soundly, and the next morning I sent for the Chief Engineer of the War Department [our map maker] and told him to put the Philippines on the map of the United States [pointing to a large map on the wall of his office]; and there they are, and there they will stay while I am President."

That was said in 1899. History will record what has been done and to what extent the President's thoughts were carried into effect. Notice how much emphasis was put on intangibles; how little on trade. And yet it was a part of the problem.

So today we have a complex, complicated problem that is made up of intangibles, a problem affecting, as I said, 15,000,000 Filipinos for whom we have been responsible for the last 40 years. We have the human element, the moral side, to consider in addition to the economic problem.

This matter in one form or another has been up for many years in Congress. Possibly it may be of some interest, in emphasizing just what is in my mind, if I recall a statement I made before the Committee on Insular Affairs in 1924, when the Philippine bill was up for discussion. I then said to that committee-mind you that was in 1924, many years ago, when the question of independence was up-I then said, "The Filipino people will develop much more rapidly, spiritually and materially, under the American sovereignty than under any other form of government."

I said that our sovereignty over the Philippine Islands was the greatest stabilizing force for law and order in the Far East; that when we withdrew our sovereignty from the Philippine Islands, it would be the beginning of the end of all Anglo-Saxon influence in the Far East. I had in mind then not only that influence in China and Japan, but also in India, and I even thought it might go so far as Egypt. I stated that it would be the beginning of the end of all the hopes and aspirations of the Filipino people; that when we withdrew in the course of time, England would have to get out of Hong Kong and China; that France would have to abandon Indo-China; and Holland would have to give up Java.

I then said that the American people would, in time, require all the tropical products that can be grown in the Philippine Islands; that on the other hand the Filipino people then required and would require the open, free American markets for their products.

Hence I said, gentlemen, that it was not purely a PhilippineAmerican problem, that it was a world problem; that it was to the interests of the Filipino people, the interests of the American people, and the interests of the world at large, that the sovereignty of the United States should not withdraw.

I recall that the vice president was present when I made that statement here back in 1924. Lots of water has gone under the bridge since. Then we did not have the totalitarian states, and the dictatorships.

Senator PITMANN. Pardon me-the statement you have just made is a repetition of a statement you made before this same committee in 1924?

Mr. HAUSSERMANN. Yes; 1924; it is in print.

Now, the political question has been decided against me by the Tydings-McDuffie Act. We are going to give the Filipinos his independence in 1946. But we still have his economic problem. We must remember that, in 1909, after we got rid of the 10 years' restrictions made by the treaty of peace we granted or put in force a policy of free trade between the Philippines and the United States insofar as the products of each country were concerned. Gentlemen, at that time the Filipino people, that is, their officials, objected to it. It is a matter that I think we should not overlook. They objected, not because they didn't want the market of America, but they foresaw that if there was free trade, an economic situation would develop with the Philippine Islands whereby they would become practically wholly dependent upon the markets of the United States, and they foresaw the possibility of that interfering with their political aspirations.

But we went on and placed our policy in force and effect. It was of great material, and intangible benefit to the Philippine people, as well as to the American people.

I went over there when there was no trade of any consequence between the United States and the Philippines. There were no shipping facilities of any consequence, I mean, no American ships running scross the Pacific.` I have lived there for forty-odd years and it does not require a body of experts with their great tomès, to tell me what was accomplished in that 40 years. I have lived through it. I saw the finest fleet of American-built ships operating there. I saw a trade that began from nothing, and gradually increased, to what it

is today. I saw the Filipino people gradually elevating their standard of living until today they have a standard of living way beyond that of the surrounding countries, all made possible by our trade policy.

Now, gentlemen, what I am interested in-believe it or not-is not whether sugar be sent here at an increased or decreased price, or whether the Americans can sell more tonnage, or matters of that sort; what I am interested in is that you gentlemen who have the fate of these people in your hands do not destroy that which was created by our own policy, which is their present standard of living. Give the Filipino people an opportunity to maintain their present standard of living.

The CHAIRMAN. In other words, Judge, you favor the general philosophy of this bill, to cushion the independence?

Mr. HAUSSERMANN. In the sense that half a loaf is better than no bread, I say "yes." But before I get through I will give you just what my ideas are; whether they have any force or effect, it is immaterial, but I want to give you gentlemen the benefit of an old man's experience, an old man who got old over there. I would like to tell you just why we don't want you to destroy what we all, including yourselves, created there.

Senator VANDENBERG. Judge, will this bill save it or do we confront the same thing again in 1960?

Mr. HAUSSERMANN. Now, I will break into my thoughts here just to say, gentlemen, and you can't get away from it, that anything you do along the line of the law you are now considering amounts to nothing more than a process of liquidation-a process of liquidation which will force the Filipinos down again somewhere near where they were when we took them over. We owe them something better than this, and my thoughts of our obligations to them run in this wise: This Nation is strong enough and rich enough to admit that it created con ́ditions there and that it is going to give them their independence, but not in a way to make it necessary to destroy that which we built there. We built up the economic structure out there and we raised the standard of living because of the trade relations. We should be able to say to them, "We are going to leave you and let you paddle your own canoe, but we are not going to take away from you your markets that you now have, insofar as your present production is concerned, or somewhere near that." So I would say, "Definitely you are getting your independence and this free American market up to what you now produce. On anything beyond that you have to pay the full rates." The CHAIRMAN. In other words, you would freeze the existing trade conditions as more or less permanent and any increase you would make dutiable

Mr. HAUSSERMANN (interposing). Absolutely.

Now, gentlemen, as to the intangible, you can't avoid

Senator VANDENBERG (interposing). Before you leave that, Judge, are you through with that or are you going to discuss that again? Mr. HAUSSERMANN. No; I won't go into detail again. I say if you are going to give them independence, don't take away their means of maintaining their present standard of living.

Senator VANDENBERG. Suppose we don't pursue the formula you recommend, and suppose we do pursue the formula of this bill, is it your judgment that in 1960, they will be ready to paddle their own

canoe-using your own language or will be have to have another bill at that time in order to achieve the moral objectives that you describe?

Mr. HAUSSERMANN. To be perfectly frank, I don't think it is possible for the Filipino people to find any market that is better than the American market they have now.

The CHAIRMAN. Or as good?

Mr. HAUSSERMANN. Or as good. They have to have that, and on the other hand we need the tropical products that they can produce. It is mutual; it is mutual. Nobody can tell me I don't care how many experts-no one can tell me that the occupation of the Philippine Islands has not been a real, genuine, material benefit to the Philippine people and to the people of the United States, and the people in the Far East. Now, that is what I am coming to.

Gentlemen, our influence in the Far East has had a wonderful indirect effect. We gradually saw the wages of the Chinaman increased; we saw the Indian coming there in the Philippine Islands and observe and seeing how this great Nation was treating the Philippine people, how liberal they were in permitting them to participate in the Government there, they became agitated and even Great Britain was forced, under the circumstances, because of what we had done there, to give them a much more modern government than they had had.

And when I say that we must not do anything to prevent the Filipino people from maintaining their present standard of living, I have in mind the indirect effect it will have upon the great body of so-called backward people in the Far East. I think that, if we would keep our feet on the ground and have the courage to let them have this market, that we would help the people of the Far East raise their standard of living, and we would materially contribute toward peace and democracy.

We are giving lip service to democracy throughout the world, and at the same time helping the dictators by withdrawing and turning over more than half the earth to them. Our action is contrary to our lip service. We are taking away the benefits of democracy from 15,000,000 people.

The CHAIRMAN. Do you think, Judge, that under independence democracy will fail in the Philippines?

Mr. HAUSSERMANN. I was coming to that. That is a delicate subject.

You will remember what President Wilson said, that we could not grant anybody self government but that we could withdraw our Sovereignty. We can do that, but, gentlemen, the fate of the Philippine Islands after we withdraw will be in the hands of the Empire of Japan. It is something that you can't help.

The CHAIRMAN. How many people in the Philippines, in your judgment—I mean the masses-realize or assume that your prediction is the accurate prediction of their status after independence?

Mr. HAUSSERMANN. Well, let's put it this way, so I won't be misquoted: I think the great bulk-much more than a majority-of the intelligent people there who know what is going on in the world realize that when the United States once withdraws that their political fate will depend wholly upon the will of Japan.