"b. scrap tobacco, and stemmed and unstemmed filler tobacco de paragraph 602 of the Tariff Act of 1930, four million five hundred pounds;

"c. coconut oil, two hundred thousand long tons;

"d. buttons of pearl or shell, eight hundred and fifty thousand For each calendar year thereafter through the calendar year 1945, ea said quotas shall be the same as the corresponding quota for the im preceding calendar year, less 5 per centum of the corresponding origi For the period January 1, 1946, through July 3, 1946, each of the sa shall be one-half of the corresponding quota specified for the calendar "(c) The Philippine Government, in imposing and collecting export Philippine embroideries, shall compute the tax in accordance with the specified in subsection (a) of this section, except that in determining th value of any such article, an allowance shall be made equal to the insurance, and freight the Philippines—of any cloth of United States of in the production thereof.

"(d) The United States duty shall be levied, collected, and paid, in t States, upon all Philippine sugars, which are entered, or withdrawn fr house, for consumption in any calendar year after 1939, in excess of e dred and fifty thousand long tons, of which not more than fifty thou tons may be refined sugars: Provided, however, That for the period J 1946, through July 3, 1946, the quota of Philippine sugars, not subje United States duty, shall be four hundred and twenty-five thousand lon which not more than twenty-five thousand long tons may be refined sug export tax imposed and collected on Philippine sugars entered or w from warehouse for consumption in excess of the quotas established by section shall be refunded by the Philippine Government.

"(e) Upon the expiration of the Act of June 14, 1935 (49 Stat. extended to May 1, 1941, by proclamation of the President, dated Ja 1938, the United States duty shall be levied, collected, and paid, in th States, upon all Philippine cordage, which is entered, or withdrawn fr house, for consumption during the remainder of the calendar year 1941 of four million pounds and in any calendar year after 1941 in exce million pounds: Provided, however, That for the period January 1, 1946 July 3, 1946, the quota of Philippine cordage, not subject to the Unit duty, shall be three million pounds. Any export tax imposed and col Philippine cordage entered, or withdrawn from warehouse, for consu excess of the quotas established by this subsection shall be refunde Philippine Government.

"(f) (1) The quotas for sugars shall be allocated annually to th producing mills and the planters supplying such mills proportionatel basis of the average annual production of such mills during the calend 1931, 1932, and 1933. The allocations so made shall be prorated in e by the Philippine Government, under export permits issued by that Gov between such mills and planters in accordance with their contracts in December 31, 1938. Upon the expiration of any such contracts, alloc involved shall be prorated, reallocated, or disposed of in such manne Philippine Government may by law prescribe to safeguard the interes planters and mill owners and to further the general welfare of the Ph "(2) The quotas for cordage, established by subsection (e) of this and by the Act of June 14, 1935, shall be allocated according to formula used in the allocation of the cordage quota for the years under the Act of June 14, 1935, as prescribed in Executive Order Numb issued by the President of the Philippines on April 28, 1938.

"(3) The quotas for all articles for which quotas are established section, except sugars and cordage, shall in each instance be allo authorities of the Philippine Government among the manufacturers wh ucts were shipped to the United States during the calendar year 193 basis of the proportion which each manufacturer's maximum production to the United States, directly or through other persons, in any calen during the five-year period, 1933 through 1937, bears to the total maximum shipments of all such manufacturers.

"(4) The holder of any allotment under any of the quotas establishe Act or by the Act of June 14, 1935, or his successors, representa assignees, may sell or otherwise transfer his or its allotment, or a thereof, or all or any part of his or its rights to any future allotments

to such laws and rules and regulations as may be enacted and prescrib the Philippine Government: Provided, however, That in the case of sugar laws, and rules and regulations as may be enacted and prescribed by the I pine Government shall be in conformity with the provisions contained i division (1) of this subsection.

"(g) (1) The Philippine Government shall pay to the Secretary of the ury of the United States, at the end of each calendar quarter, all of the m received during such quarter from export taxes (less refunds), impose collected in accordance with the provisions of this section, and said m shall be deposited in an account with the Treasurer of the United State shall constitute a supplementary sinking fund for the payment of bonds Philippines, its Provinces, cities, and municipalities, issued prior to M 1934, under authority of Acts of Congress: Provided, however, That m received from any export tax imposed on any article which is shipped the Philippines to the United States prior to July 4, 1946, and which is en or withdrawn from warehouse for consumption, on or after July 4, 1946, sł refunded by the independent Government of the Philippines.

"(2) The said Secretary of the Treasury is authorized to accept the de of the proceeds of the export taxes referred to in subdivision (1) of thi section in accordance with the Act of June 11, 1934 (48 Stat. 929).

"(3) The Secretary of War of the United States, with the approval Philippine Government, is authorized to purchase with such supplem sinking-fund bonds of the Philippines, its Provinces, cities and municipa issued prior to May 1, 1934, under authority of Acts of Congress and, such bonds are not available, to invest such fund in interest-bearing oblig of the United States or in obligations guaranteed as to both principal a terest by the United States. Whenever the Secretary of War finds tha fund is in excess of an amount adequate to meet future interest and pri payments on all such bonds, he may, with the approval of the Philippin ernment, purchase with such excess any other bonds of the Philippin Provinces, cities, municipalities, and instrumentalities. For the purpo this subsection obligations may be acquired on original issue at par, purchase of outstanding obligations at the market price. Any oblig acquired by the fund may, with the approval of the Philippine Govern be sold by the Secretary of War at the market price and the proceeds o sale and the proceeds of the payment upon maturity or redemption o obligations held in the supplementary sinking fund, as well as all mon any manner earned by such fund or on any obligations acquired by said shall be paid into the said fund.

"(4) During the three months preceding July 4, 1946, the Philippine G ment, the Secretary of the Treasury of the United States, and the Secret: War of the United States shall confer to ascertain that portion of the of the Philippines, its Provinces, cities, and municipalities, issued pr May 1, 1934, under authority of Acts of Congress, which will remain out ing on July 4, 1946; and the Philippine Government shall turn over Secretary of the Treasury of the United States for destruction all such that are then held, canceled, or uncanceled, in any of the sinking funds tained for the payment of such bonds. After such outstanding portion o indebtedness is thus determined, and before July 4, 1946, (i) there shall be set up with the Treasurer of the United States a special trust account name of the Secretary of the Treasury of the United States to pay interest and principal payments on such bonds; (ii) the Philippine Gover shall pay to the Secretary of the Treasury of the United States for d in this special trust account all of the sinking funds maintained for th ment of such bonds; and (iii) the Secretary of the Treasury of the States shall transfer into this special trust account all of the proceeds supplementary sinking fund referred to in subdivision (1) of this subse Any portion of such special trust account found by the Secretary of Wa the Secretary of the Treasury of the United States on July 4, 1946, to excess of an amount adequate to meet future interest and principal pay on all such outstanding bonds, shall be turned over to the Treasury independent Government of the Philippines to be set up as an additional ing fund to be used for the purpose of liquidating and paying all over othe gations of the Philippines, its Provinces, cities, municipalities, and instrume ties. To the extent that such special trust account is determined by the tary of the Treasury of the United States to be insufficient to pay interes principal on the outstanding bonds of the Philippines, its Provinces,

and municipalities, issued prior to May 1, 1934, under authority o Congress, the Philippine Government shall, on or before July 3, 194 the Secretary of the Treasury of the United States for deposit in su trust account an amount which said Secretary of the Treasury dete required to assure payment of principal and interest on such bonds. however, That if the Secretary of War and the Secretary of the Tr United States find that this requirement would impose an undue hard the Philippines, then the Philippine Government shall continue t annually the necessary funds for the payment of interest and pri such bonds until such time as the Secretary of the Treasury of t States determines that thhe amount in the special trust account is to meet interest and principal payments on such bonds.

"(5) On and after July 4, 1946, the Secretary of the Treasury of t States is authorized, with the approval of the independent Governm Philippines, to purchase at the market price for the special trust acco of the Philippines, its Provinces, cities, and municipalities, issued May 1, 1934, under authority of Acts of Congress. The Secretary of ury of the United States is also authorized, with the approval of the in Government of the Philippines, to invest all or any part of such spe account in any interest-bearing obligations of the United States obligations guaranteed as to both principal and interest by the Unit Such obligations may be acquired on original issue at part or by p outstanding obligations at the market price, and any obligations ac the special trust account may, with the approval of the independent G of the Philippines, be sold by the Secretary of the Treasury at the ma and the proceeds of the payment upon maturity or redemption of su tions shall be held as a part of such special trust account. Whe special trust account is determined by the Secretary of the Treasu United States to be adequate to meet interest and principal payme outstanding bonds of the Philippines, its Provinces, cities, and mun issued prior to May 1, 1934, under authority of Acts of Congress, the of the Treasury is authorized to pay from such trust account the p such outstanding bonds and to pay all interest due and owing on su All such bonds and interest coupons paid or purchased by the spe account shall be canceled and destroyed by the Secretary of the T the United States. From time to time after July 4, 1946, any money special trust account found by the Secretary of the Treasury of t States to be in excess of an amount adequate to meet interest and payments on all such bonds shall be turned over to the treasurer of pendent Government of the Philippines.

"(h) No article shipped from the Philippines to the United States January 1, 1941, subject to an export tax provided for in this sec be admitted to entry in the United States until the importer of su shall present to the United States collector of customs a certificate, a competent authority of the Philippine Government, setting forth and quantity of the article and the rate and amount of the export or shall give a bond for the production of such certificate within s from the date of entry."

SEC. 2. Section 8 of the said Act of March 24, 1934, is hereby ar adding thereto a new subsection as follows:

"(d) Pending the final and complete withdrawal of the sovereig United States over the Philippine Islands, except as otherwise pr this Act, citizens and corporations of the Philippine Islands shall en United States and all places subject to its jurisdiction all of the privileges which they respectively shall have enjoyed therein under of the United States in force at the time of the inauguration of th ment of the Commonwealth of the Philippine Islands."

SEC. 3. Section 10 of the said Act of March 24, 1934, is hereby a adding the following subsection thereto :

"(c) (1) Whenever the President of the United States shall find properties in the Philippines, owned by the Philippine Government or persons, would be suitable for diplomatic or consular establishme United States after the inauguration of the independent Governmen with the approval of the Philippine Government, and in exchang conveyance of title to the United States, transfer to the said Gove private persons any properties of the United States in the Philippi to any properties so transferred to private persons, and title to any

so acquired by the United States, shall be vested in fee simple in such pe and the United States, respectively, notwithstanding the provisions cont in subsection (a) of this section.

"(2) Whenever, prior to July 4, 1946, the President of the United S shall find that any properties of the United States in the Philippines be suitable for diplomatic and consular establishments of the United S after the inauguration of the independent Government, he shall designat same by the issuance of a proclamation or proclamations, and title to properties so designated shall continue to be vested in fee simple in the U States notwithstanding the provisions contained in subsection (a) of section.

"(3) Title to the lands and buildings pertaining to the official residenc the United States High Commissioner to the Philippine Islands in the of Manila and Baguio, together with all fixtures and movable objects, continue to be vested in the United States after July 4, 1946, notwithsta the provisions contained in subsection (a) of this section.

"(4) Administrative supervision and control over any properties acquir designated by the President of the United States pursuant to this subse and over the official residences in the Philippines of the High Commissi shall, on and after July 4, 1946, be exercised by the Secretary of Stat accordance with Acts of Congress relating to property held by the U States in foreign countries for official establishments."

SEC. 4. Section 13 of the said Act of March 24, 1934, is hereby amend read as follows:

"SEC. 13. (a) Notwithstanding any provision of law in force on July 3, the importation into the United States, on and after July 4, 1946, of any ar the growth, produce, or manufacture of the Philippines shall be subject t customs laws of the United States in the same manner as articles the gr produce, or manufacture of other foreign countries generally: Provided, ever, That during the period in which the executive agreement provided f subsection (b) of this section is in full force and effect, any Philippine a shall be entitled to such preferential customs treatment as may be provide in the said agreement.

"(b) The President of the United States is hereby authorized to enter an executive agreement with the President of the Philippines, to becom fective on July 4, 1946, providing for the gradual elimination, during the p July 4, 1946, through December 31, 1960, hereinafter referred to as the pendence period, of preferential customs treatment accorded by the U States to Philippine articles and by the Philippines to American art Provided, however, That no such agreement shall be made unless the 1 dent of the Philippines shall have been duly authorized by act of the Nat Assembly of the Philippines to make and enter into such agreement. In tion to the inclusion of such provisions as the President of the United S and the President of the Philippines may consider to be appropriate to guard to each party the advantages granted under the agreement by prov for the termination of the agreement at any time, upon not more tha months' prior notice, in the event of the adoption or application by the party of measures or practices which would tend to nullify or impair any advantage, and such other provisions as the Presidents may consider 1 reasonable and necessary to assist in the administration thereof, the agreement shall contain provisions to the following effect:

"(1) During the period July 4, 1946, through December 31, 1946, exce otherwise hereinafter specifically provided, every Philippine article sha entitled to an exclusively preferential reduction of 75 per centum of the U States duty. During the same period, except as otherwise hereinafter sp cally provided, every American article shall be entitled to an exclusively erential reduction of 75 per centum of the Philippine import duty. On succeeding January 1 thereafter these preferential reductions shall be gressively diminished by an additional 5 per centum of the United States and of the Philippine import duty, respectively. No third country, incl Cuba, shall be entitled to any benefits arising under this Act or under agreement made pursuant thereto.

"(2) Notwithstanding subdivision (1) of this subsection, no United S duty shall be levied, collected, or paid upon any of the following Phili articles within its respective quota as hereinafter provided:

"a. cigars (exclusive of cigarettes, cheroots of all kinds, and paper c and cigarettes, including wrappers);

"b. scrap tobacco, and stemmed and unstemmed filler tobacco des paragraph 602 of the Tariff Act of 1930;

"The exclusive preferences provided for in subdivision (1) of this s shall not apply to any of the foregoing Philippine articles entered, or w from warehouse, for consumption in excess of its respective quota.

"(3) For the period July 4, 1946, through December 31, 1946, each of quotas shall be the same as the corresponding quota provided for in su (3) of subsection (b) of section 6 for the period January 1, 1946, thro 3, 1946. For the calendar year 1947 each of the said quotas shall be as the corresponding quota provided for in subdivision (3) of subsectio section 6 for the calendar year 1945, less 5 per centum of the correspon inal quota provided for in the said subdivision. For each calendar ye after during the independence period each of the said quotas shall be as the corresponding quota for the immediately preceding calendar ye per centum of the corresponding original quota.

"(4) The annual quotas provided for in subsections (d) and (e) of for Philippine sugars and Philippine cordage, respectively, shall be throughout the independence period: Provided, however, That for th July 4, 1946, through December 31, 1946, the quota for Philippine sug be four hundred and twenty-five thousand long tons, of which not m twenty-five thousand long tons may be refined sugars: Provided, furth for the period July 4, 1946, through December 31, 1946, the quota for E cordage shall be three million pounds. The exclusive preferences pro in subdivision (1) of this subsection shall not apply to any Philippine Philippine cordage entered, or withdrawn from warehouse, for consu excess of their respective quotas.

"(5) In determining the dutiable value of Philippine embroideries into the United States, an allowance shall be made equal to the cost-co ance, and freight the Philippines-of any cloth of United States origi the production thereof.

"(6) The rate of the United States tax on the processing of co wholly of Philippine production or produced from materials wholly of E growth or production, shall be no higher, throughout the independen than the rate applicable to the processing of palm kernel oil or to th processing of palm oil.

"(7) The quotas hereinabove mentioned shall continue to be throughout the independence period, in the same manner as is provid subsection (f) of section 6.

"(8) Where any article the growth, produce, or manufacture of th pines, brought into the United States from the Philippines, upon w United States duty has been levied, collected, and paid, is used in t facture or production of articles in the United States, on the shipmen articles to the Philippines, within three years after the arrival of s chandise in the United States, the full amount of the duty paid merchandise so used, less 1 per centum of such duty, shall be refunded back under such rules and regulations as the Secretary of the Treasu United States may prescribe. Where any article the growth, produce, facture of the United States, brought into the Philippines from th States, upon which any Philippine import duty has been levied, colle paid, is used in the manufacture or production of articles in the Philip the shipment of said articles to the United States, within three ye the arrival of such merchandise in the Philippines, the full amour duty paid upon the merchandise so used, less 1 per centum of such d be refunded as draw-back under such rules and regulations as the Sec Finance of the Philippines may prescribe.

"(9) Notwithstanding subdivision (1) of this subsection, no Philippi duty shall be levied, collected, or paid upon American cigarettes, brough Philippines from the United States, within the quotas hereinafter es For the period July 4, 1946, through December 31, 1946, the said qu amount to one billion one hundred and twenty-five million cigarettes. calendar year 1947 the quota shall be two billion one hundred million and for each calendar year thereafter the quota shall be the sam quota for the immediately preceding calendar year less one hundred million cigarettes. The exclusive preferences provided for in subdivisi