Correspondences 3

March 5, 2011
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 Statehood and Hawaii: Correspondences between Congress, the State Department and the United Nations Pt.4

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Now much of the information and resistance to the British and US funded regimes of Greece and Turkey came from the transport unions with support from the World Federation of Trade Unions of which the ILWU also belonged.  In fact, in the years around the signing or the UN Charter, many of the territories engaged in similar political struggles that took place on the ports and docks and railways of territories. The Six Resolutions of the First Congress of the WFTU in 1945, for example, promoted independence and the right of self-determination of peoples; sent a commission to investigate the state of affairs with Greece; urged legislative reforms to eliminate racial discrimination, among others. The WFTU Congress also adopted a resolution expressing admiration “of all free peoples for the tireless efforts of President Roosevelt” and recommended him as an example to the chiefs of the United Nations.

Systematically, and trying not to color this with too much personal interpretation, the agenda or the Soviet Union in regard to territories promoted independence and self-determination.  Within the Soviet economic system, they were committed to establishing trade networks that would benefit labor and encourage a more scientific approach towards economic growth.  In order to promote this, the capitalist colonial regimes had to be removed. Where information on decolonization was spread, occurred first through unions and then disseminated through the transport areas like ports, docks, railways, airstrips, etc, then though the leadership of other affiliates.  Transport areas were also the gateway for weapons and munitions to enter into the territories, so the WFTU, advocating support for self-determination was seen as a threat to the colonial establishment.

The State Department at this time was very busy.  As we’ve touched upon, the United States had already begun to assert dominance in the Bretton Woods institutions and I will get back to that later. So, in addition to all this, the State Department was also promoting their own international trade union in cooperation with the American Federation of Labor (AFL), the British Trade Union Congress (TUC) and the Dutch Federation of Labor called the International Congress of FREE Trade Unions (ICFTU) which officially began in 1949, two years after the Marshall Plan.  The Congress of Industrial Organizations (CIO) left the WFTU in 1949 and expected that the ILWU would join them. When the ILWU did not join, and in part, this was a result of Harry Bridge’s leadership, the ILWU was kicked out of the CIO, and there began government led campaign of harassment of Bridges, and ILWU leadership.

In the 9th Convention of the C.I.O. held in October 1947, the year the Marshall Plan was enacted, a resolution was adopted by the C.I.O. and I’ll read the relevant paragraph:

“We know that an enduring peace demands that the people everywhere, including the economically backward or colonial countries, be protected in their rights of self-determination and self-government—free from interference or coercion, be it military of economic from any source—benevolent or despotic. The people of the war-devastated countries look to us for relief, rehabilitation and reconstruction (referencing the World Bank).  We therefore support sound programmes for post-war rehabilitation.  We urge in support of our Nation’s fight against hunger throughout the world prompt action to provide food and other economic aid for the rehabilitation of their countries.  We also urge that under no circumstances should food or any other aid given by any country be used as a means of coercing free but needy people in the exercise of their rights of independence and self-government or to fan the flames of civil warfare.”

By 1949, the Marshall Plan was in full effect, and the United States was on its way to becoming the dominant economic force in the world, competing with the Soviet Union for control over territories and their labor, commodities and resources, and Hawaii, it was feared, under its present ILWU leadership and its ethnically diverse and international membership would begin to move towards the UN declared right to self-determination.

What the United States did not understand about Hawaii, though, was that the ILWU, although promoting the ideals of the United Nations and talking about rights of self-determination, were also, for the most part, committed to Statehood as being a right of self-government.  ILWU leadership consistently supported Statehood, although in 1953-54, Jack Hall is also on record briefly supporting Free-Association, and on one occasion, makes a cheeky reference to independence as “Kamehameha-ism, but after looking at reports of Puerto Rico’s poor labor conditions after becoming semi-autonomous, he reverted to his original position of support for Statehood.

Here is a letter dated July 15, 1954 To: Jack Hall, Regional Director
From: Lincoln Fairley, Research Director

Subject: Commonwealth status for the Territory of Hawaii

I understand from Lou that you have raised the question that the ILWU might agitate for commonwealth status for Hawaii as a substitute for the statehood campaign and that you are thinking of the status of Puerto Rico as the example. I have checked a bit about the present status of Puerto Rico and feel that Hawaii would not have much, if anything, to gain by moving in this direction.

Commonwealth status for Puerto Rico is unique. It seems to be principally a device for quieting the demand for real independence without in fact providing many of the basic factors required for independence.

Commonwealth status for Puerto Rico means the following:

  1. A compact between Puerto Rico and the United States that Puerto Rico will remain a part of the U.S. Federal system.
  2. A considerable degree of autonomy in Puerto Rican affairs (exclusive, of course, of international relations) with an elected governor with a constitution drafted and ratified in Puerto Rico. However, they have only an observer in Congress and do not participate in presidential elections.
  3. A number of serious limitations with regard to control over even local affairs.”A. There is apparently serious doubt whether the U.S. Congress could amend the Constitution without approval.

B. There are certain limitations written into the Constitution. There is, for example, a debt limit for Puerto Rico and its municipalities as a percentage of the actual valuation of property.

C. The government’s hands, therefore, would be tied if they sought to promote a program involving major government expenditures along New Deal lines. Most U.S. federal agencies operate in Puerto Rico under U.S. legislation; Selective Service, for example, though the Puerto Ricans had nothing to say about its passage. Similarly the Taft-Hartley Law is in effect and is not limited to commerce with the U.S all local industry is covered.

  1. The Internal Revenue Bureau is an exception to the foregoing; Puerto Ricans are exempt from U.S. income tax legislation. This, I assume is primarily an advantage to Puerto Rican corporations, many of which are in fact owned by persons in the U.S. There cannot be many workers in Puerto Rico who earn enough to gain much from income tax exemptions.
  2. 5. Puerto Rico is part of the U.S. tariff system. Puerto Rico exports to the U.S. are not taxed on arrival here and customs collections on goods coming into Puerto Rico are turned back into Puerto Rico and do not go into the U.S. Treasury.

Commonwealth status (referred to in Puerto Rico as Estado Libre Asociado) was affected when the Constitution went into effect on July 25, 1952. The Constitution was drafted and subsequently approved by referendum vote pursuant to Public Law 600 adopted by the U.S. Congress in 1950. The purpose of the changes brought about by Public Law 600 are indicated by the following quote from the report of the Public Lands Committee:

The bill under consideration would not change Puerto Rico’s fundamental political, social and economic relationship to the United States. Those sections of the Organic Act of Puerto Rico pertaining to the political, social and economic relationship of the United States laws, customs, internal revenue, Federal judicial jurisdiction in Puerto Rico, Puerto Rican representation by a Resident Commissioner, etc., would remain in force and effect, and upon enactment of S. 3336 (the precursor of Law 600—ED.) would be referred to as the Puerto Rican Federal Relations Act.” (Committee on Public Lands of 81st Congress, House Report 2275, 1950.)

Mr. Jack K. McFall, Assistant Secretary of State, in a letter included in the above committee’s report, wrote that the bill should be passed, “in order that formal consent of the Puerto Ricans may be given to their present relationship to the United States.”

He added: “In view of the importance of ‘colonialism’ and ‘imperialism’ in anti-American propaganda, the Department of State feels that S. 3336 would have great value as a symbol of the basic freedom enjoyed by Puerto Rico, within the larger framework of the United States of America.”

How popular commonwealth status actually is, is difficult to determine. It is true that the Constitution was adopted by referendum vote but only 41% of the eligible voters participated, Consequently the constitution was actually adopted by 34% of the eligible voters. Moreover, three of the political parties in the territory favor outright independence. How wise independence would actually be under the present circumstances is another question. My own guess that Puerto Rico being so small and so dependent on a single crop would be in and even tougher spot that the Philippines if full independence were achieved.

There appears never to have been any serious agitation for statehood in Puerto Rico. The choice was between independence and something short of independence. The question was how far from the U.S. would Puerto Rico move, not how close.

In pursuing the matter further, I suggest that you get a copy of the “The Annals of the American Academy of the Political and Social Science” from January 1953. The best thing in the issue is and article by Rupert Emerson, who during part of Roosevelt era was Director of the Divisions of Territories and Insular Possessions. After describing the character of the commonwealth set up, Emerson has the following to say about the possible application of commonwealth status to Alaska and Hawaii:

“ To Alaska and Hawaii the change which has been made in Puerto Rico’s status presumably appears as a menace, rather that as an advance to be envied. Coveting statehood which has several times seemed almost within their grasp, these territories have lingered under organic acts dating four or five decades into the past and providing for Washington-appointed governors and other restrictions on their autonomy in domestic affairs. In company with Puerto Rico, they lack full congressional representation and are excluded from Presidential elections. Fiscally they are at a disadvantage in that, unlike Puerto Rico, they neither receive exemption from the federal income tax nor secure the return to their own treasuries of internal revenue taxes and customs duties. But the one goal to which they aspire is statehood, and it would be the coldest of comfort to them to think that they might be put off by having accorded to them the favor newly devised to meet Puerto Rico’s needs. In its bearing on their own position, they could applaud the Puerto Rican solution only in the unlikely event that their own claims to statehood would receive kindlier treatment because of the removal of Puerto Rico from the list of current aspirants to the prize of becoming the forty-ninth state.”

 

At this point, I think we should understand what the Marshall Plan was—because I think we mostly consider the Marshall Plan to be imperial US policy that establishes the process for reconstruction and aid across Europe between 1947 and 1951, and see it for what it is, which is a precursor to U.S. expansionism. The Marshall Plan rightfully becomes shorthand for US cold-war policy, and for the international unions it represents an aggressive act against the Soviet model for economic inter-dependence as well as an obstacle for struggles of independence by colonial countries.

The Marshall Plan is Reconstruction Aid and it is technically referred to as the European Recovery Program (ERP).  Through Congress, it is implemented through the 1947 Economic Cooperation Act, which authorizes the use of the services and facilities of the United Nations, its organs and specialized agencies, and all the other international organizations in carrying out its purpose. Congress approved funding for the ERP for three years, and in 1951 the Economic Cooperation Act folded into the Mutual Securities Act, which is still very much alive and in practice today.

Now as it happens, during wartime, the United States was anxious that the post-war years were going to see massive unemployment as it did after WWI, and that we would once again struggle with another great Depression. As early as 1941, an independent group met at the University of Chicago and began to discuss this exact problem.  They called themselves the Committee for Economic Development (CED), and organized by Paul Hoffman who at that time was president of Studebaker Corporation.  The CED was an independent think-tank that involved the participation of academics, pro-union people, and business leaders and Paul Hoffman was chosen by Secretary of State Acheson to head the ECA.

To understand why he was qualified to head the Economic Cooperation Administration, you’d have to understand the work the CED did in trying to shape economic policy in the US when the war was over. During wartime, employment was high and the US economy was doing well. Roosevelt’s 1941 Lease-Lend Act to Britain, which provided US made defense articles: weapons, munitions, vehicles, machinery, etc. to Britain, ensured that payment or repayment in kind or property, or any other direct or indirect benefit that the President deems satisfactory, was a cash cow, but policy needed to be shaped to ensure that we could provide for the infrastructure for employment when the soldiers came home.

American manufacturers and Chambers of Commerce did not like the Bretton Woods Proposals especially proposals around Full-employment, which was the Keynesian model that provides that governments provide employment for all who are looking—a model not dissimilar from Roosevelt’s Works Progress Administration that provided employment during the Great Depression.  It should be noted, that during the drafting of the UN Charter in 1945, Full Employment (626 PFPP) was in the proposal for consideration on Trade and Employment.  Senators Vandenberg and Connelly told U.S. Secretary of State Stettinius that if Full-Employment were not removed from the Charter, Congress would not ratify it.  Although there was protest among the drafters participating in the San Francisco conference, it was removed because it was thought that for the United Nations to be successful, the United States needed to ratify it, as it was also understood that the reason the League of Nations failed was because the U.S. had not ratified it. This is important because as we shall see in the correspondences, the inclusion of Alaska and Hawaii as Non-Self-Governing Territories was seen by Vandenberg, Connelly and the Secretary of State as a matter of prestige, rather than a viable threat to National Security.

Getting back to the Marshall Plan and the Economic Cooperation Act, it was agreed that the United States would provide reconstruction aid to the wa r-torn countries. How this was implemented was that the United States would build the industrial machinery with U.S. labor in the United States and send it abroad on primarily U.S. flagged ships while providing a small percentage of the commodity resources, like steel and other metals asked for by each country. The problem of maintaining stable currency valuation, however, was still a problem, and how this was solved was for participating countries to devalue its currencies and apply it to an exchange rate that was pegged to the dollar.  This was applied by treaty to Austria, Belgium, Denmark, France, Germany, Greece, Italy, Netherlands, Norway, Turkey, and the United Kingdom—if you notice, all the European countries that listed their territories, the European axis powers that lost territories, and again Greece and Turkey, but not Australia and New Zealand.

Further, besides cooperating countries devaluing their sovereign currencies, these countries, still needed to pay for reconstruction, and just as in the previously mentioned Lease-Lend Act, the benefit to the United States is the transfer of reasonable quantities of commodities of each countries’ resources, meaning the resources and commodities of the territories.

Another stream of payment was for cooperating countries to place in a special account, a deposit in the currency of each country a commensurate amount that was agreed upon by each country and the United States.  This deposit into a special account was a technical monetary formulation derived during Bretton Woods for the IMF, what is now known as Special Drawing Rights, which was to be used for the stabilization of currencies, but during the Marshall Plan this special account went straight to the U.S. Treasury.

Also as a result of the Economic Cooperation Act, the US was able determine its own beneficial tariff fees, since it was primarily the US flagged ships that were bringing commodity resources to the US and shipping goods off to Europe. What is contained in this Act is the United States taking advantage of the opportunity for reconstruction to co-opt the original Bretton Woods agreement, and shaping it to its advantage, and by dominating and controlling shipping, tariffs and trade, the U.S. has, in essence, buried the International Trade Organization and will in a few months present its own General Agreement on Tariff and Trade.

So as we speak about cooperation, it becomes evident that the Soviet Union and the other Socialist Republics have been excluded, and are thus, not in cooperation.  It should be noted that the US did invite the Soviet Union to participate, but knew very well that they would reject the plan because the Soviet process for reconstruction was for each country to rely upon its own labor resources to rebuild, and participate in a more cooperative and interdependent environment.

Eventually, as we can attest to today, the US market is now a transnational market and it is everywhere. Even in a downward economy, the United States continues to have a dominant influence in international markets, including Trade, Currency, Development Aid, Finance and Banking.

Currently, as a result of Chinese growth and Chinese dominant trade negotiations, the economic hegemony the US held since perestroika in 1989 appears to being tested. With further liberalizing regulations in International Agreements, we will likely see the economic results from revisions to the United Nations System of National Accounts, more liberal environmental safeguards, more militarism and US led Free Trade Agreements, and perhaps more relaxed regulations on the Convention on the Law of the Sea to possibly allow for privatization and mining in the deep sea, and I am doubtful of what some proclaim to be our imminent American Perestroika.

By 1960, the United Nations finally gained enough votes that the General Assembly passed Resolution 1514, the Declaration on the Granting of Independence to Colonial Countries and Peoples, a resolution that was pushed for by the Soviet Union for nearly 8 years and resulted in the liberation of the African and South-East Asian countries.

Okay, so this is the back drop of Hawaii’s statehood, and I’ve left out a few things like the January 1st 1959 Cuban Revolution, which occurred three months before the Statehood vote in Congress, which by the way is significant because the Southern Democrats were primarily the ones who controlled the US sugar market, and losing Cuba meant losing it’s number one sugar producer, of which Hawaii played some influence on the US sugar market, but never as much as they wanted, as Hawaii sugar growers were always secondary to Cuba and Puerto Rico as one can tell by looking at the Hawaii/US sugar tariffs. The US clearl  y favored the Cuban sugar growers and mostly used Hawaii to fulfill sugar quotas.  I have no evidence as to how much influence the Cuban revolution had on changing the minds of the Southern Democrats, but it always made more sense to me than John Burn’s lobbying efforts or the Tennessee Plan.

Another part of the backdrop was the loss of China in 1949, which was seen as a failure of the Marshall Plan. Title IV of the Economic Cooperation Act is also cited as the “China Aid Act of 1948.” It was thought that the United States and the other Colonial Administrators of the region would suffer severe commodity losses if the territories of South East Asia gained independence and spread across the Pacific, so when the People’s Republic of China gained control, the United States invested in its military presence in the Pacific region to maintain its colonial control over the region.

In 1950, Senator Knowland received this letter from Frank E. Midkiff who was an educator and businessman and a very prominent and influential community leader in Hawaii. Among many of his titles and community obligations, he was president of Kamehameha School from (1923-34), Member of the Territorial Planning Board (1939), a Trustee of Punahou School, Secretary of the Territory of Hawai‘i ’s Post War Planning Commission, Treasurer of the Atherton Estate, President of the Institute of Pacific Relations (1934), and from1935-45 President of the Chamber of Commerce of Honolulu, of which this letter represents.

Dear Congressman Knowland:

The attached statement makes specific suggestions for dealing with Formosa, Korea, and the countries of Southeast Asia.

This statement is a follow-up on previous efforts made by the Chamber of Commerce of Honolulu and others in Hawaii to insure that our Government takes all practical steps to aid the non-Communist countries of Asia to retain their freedoms.

Suggestions are listed, with some argument, of ways to prevent the consolidation of a Soviet Empire of Asia.  We fear that Soviet annoyances in Europe may now be designed to distract attention from and cloak the main Soviet drive, which we believe to be in Asia.

We believe an All-Asia Soviet Empire, once consolidated easily could acquire the remainder of the European continent also.

Russia is finding conditions in Asia much better adapted to seductive promises of seeds of Communism that in Western Europe. Her efforts are rapidly effective in Asia, whereas they do not promise cheap victories and expansions in Western Europe any more.  But we believe conditions in the non-Communist countries of Asia can be improved by normal and profitable trade and interchange of visiting businessmen and officials, so that ways of the free countries, such as America, and the friendship and cooperation of the countries of freedom will be preferred by the new forming and self determining non-Communist countries of Asia.

Yours very sincerely,

Frank E. Midkiff

Midkiff sends a laundry list of recommendations that the US might take to prevent further Communist influence in the region.

It should be noted that in 1955, during the Korean War, in solidarity with the WFTU, the ILWU temporarily refused ships carrying arms to Korea.

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