H-AGOM-CNieilsen

Financing the AGOM

            Initial Japanese landings in Mindanao were for the purpose of obtaining advance bases for the Japanese drive on Borneo.  Although they also served to hinder any reinforcements reaching the Philippines from the south.

            The Sakaguchi and Miura Detachment of about 5000 men landed at Davao on 20 December 1941 and by the middle of the afternoon were in full control of the city.  An air raid by bombers from Australia two days later caused little damage and did not delay the departure. of the Sakaguchi Detachment for Jola Sulu Islands, which was occupied on 24 December.  On 31 December the: Miura Detachment also took the town of Digos, landing from the sea to circumvent USAFFE forces, which held the heights surrounding Davao.

            On 2 March the Japanese 32nd Naval Base Force occupied Zamboanga City where they established a seaplane base. Except for these and a few other minor incidents, the war in: Mindanao remained relatively quiet. Repeated efforts by the Miura Detachment to extend its control beyond Davao-and Digos were unsuccessful.  Indeed, had it not been for their superiority in weapons, particularly artillery and air support, they probably would not have been able to maintain, even these footholds.

Eventually of course, the Japanese could be expected to turn their attention subjugating the southern Philippines, but for the time being they had their hands full on Luzon.  In the meantime, Gen William F. Sharp, in Mindanao, continued to strengthen the island defenses and to train hastily Philippine regiments being brought in from other islands.  All types of military supplies were in critically short supply, and as little help could be expected from the outside, it was necessary to improvise as best as was possible with what could be obtained locally.  Ammunition stocks were so short that even with the arrival of a million rounds of rifle ammunition on the submarine Sargo, its use was, prohibited in firing practice. Most of the soldiers who were later to defend Mindanao had not fired even a single practice round when they went into battle. As for artillery, there were only eight outmoded 2.95 inch mountain guns; in all Mindanao, and three of these, were lost at Davao.

Transportation and communications left much to be desired. There were no railroads at all, and only two highways, portions of which were still under construction and almost impassable in the rainy season. Movements of supplies was primarily by small craft, along the coast or inland by the rivers. Much of the interior was reachable only by narrow trails, and some sections remain unexplored to this day.  Large areas of Mindanao were inhabited by Moslem Moros, long used to plundering their more peaceful neighbors.  Never completely subdued, they had only been held in check under U.S. Administration.

            For defensive purposes Gen. Sharp divided Mindanao into five sections each of which reported directly to his headquarters at Del Monte, about ten miles inland from Macajalar Bay on the Sayre Highway. Here too, were the Del; Monte airfields, with large American ground crews but no aircraft.  The fields were used as a stopover and refueling point for occasional raids by bombers from Australia. It was from these airfields that Gen MacArthur departed for Australia on 17 March, and from which President Quezon. and his official party would depart eight days later.

In the meantime the Japanese conquered Borneo and Malaya - the British fortress of Singapore surrendering on 15 February.  From these areas the Japanese were able to withdraw battle-seasoned troops to complete their conquest of the Philippines.

The first contingent the Kawagachi Detachment reached Luzon from Borneo on 1 April. Four days later the Kawamura Detachment arrived from Malaya.  These two detachments, together with the Miura Detachment on Davao, were assigned to the conquest of Mindanao.  But the invasion of Mindanao was postponed while the Kawaguchi force invaded Cebu, and the: Kawamura form invaded Panay.

Late in April, three battalions of the Japanese 10th Independent Garrison took over occupation duties in Cebu, Panay and Davao.  Leaving the invasion forces of those areas free to undertake the conquest, of Mindanao.

0n the morning of 29 April, 1942 the Kawaguchi Detachment began landing at Cotabato and Parang. Against determined opposition they began driving inland along highway No 1. Simultaneously Miura Detachment began advancing along the same highway from Digos.  On 3 May, elements of the two detachments met at the juncture point of Sayre Highway with Highway No. 1. Gen Kawaguchi, with a force of 4,852 men, and with a little assistance, from the Miura Detachment, had gained control of southern and western Mindanao.  On that day also, the Kawamura Detachment began landing in northern Mindanao at-Cagayan and Togolan, barely ten miles from Gen. Forte’s headquarters.

            Considering their poor state of training and equipment, with only five pieces of outmoded artillery the USAFFE put up considerable resistance.  But with artillery, tanks and air support, the veteran Japanese forces were able to overrun one defensive position, after another.  Even so, the outcome of the battle for Mindanao would be decided not there, but on Corregidore.

            On Corregidore the morning of 6 May, Gen. Jonathan M. Wainwright concluded that further resistance was hopeless and decided to surrender.  As he was also -in. command of all USAFFE forces: in the Philippines, before surrendering he relinquished command, by radio, to Gen. Sharp of all forces outside of Manila Bay, and instructed Sharp to contact Gen. MacArthur in Australia for further orders. However, the Japanese refused to accept Wainwright’s surrender unless it included the entire Philippines. Having already ordered the destruction of all arms on Corregidore, Wainwright had little choice but to submit to the Japanese demands. He reassumed, command of the forces previously relinquished to Gen. Sharp, and on the night of 7 May, over radio Manila, broadcast the orders for all USAFFE forces in the Philippines to surrender.

This placed Gen, Sharp in a most difficult position. He radioed the gist of the radio broadcast to MacArthur. The reply was immediate. ORDERS EMANATING FROM GENERAL WAINWRIGHT HAVE NO VALIITY.  IF POSSIBLE SEPARATE YOUR FORCE INTO SMALL ELEMENTS AND INITIATE FUERRILLA OPERATIONS.  On 9 May an emissary from Wainwright informed Sharp that unless the surrender orders were obeyed, the POW men on Corregidore would be slaughtered.  Because of this, but also because he considered that further resistance on Mindanao would not effect the course of the war, Sharp surrendered all forces under his command 10 May, 1942.

            But issuing orders to surrender and having them carried out were two different things. Communications had been disrupted and radio codes destroyed.  Many units were ,out of touch except by runner.  Other units bad been broken up and widely scattered.  There was much confusion and little order.  Thousands, refusing to believe the orders, or simply ignoring them, took to the hills and mountains.  Criminal elements and renegade Moros took advantage of the confusion to loot municipal treasuries and plunder military stores murdering any who opposed them, including several American officers and civil officials. The surrender was finally completed 27, May with the capitulation of Gen Guy 0. Forte, commanding the Agusan sector.  Those who surrendered received decent treatment from the captors, the Japanese even passing out cigarettes.  In fact they fared better than many who took to the mountains.  Reliable reports claim that as many as five hundred un-surrendered soldiers were murdered by the Moros in order to obtain what weapons they had or what few pesos they possessed.

            Betrayed by the army to whom they had looked for protections stunned and bewildered people were left to the mercy of the Japanese conquerors. In the beginning the civilians too, were decently treated.  Japanese troops garrisoned only the larger cities, with small, patrols to smaller towns.  Civilians and government officials who had evacuated to rural areas were urged to return with promises of good treatment. Few did so. Most adopted a "wait-and-see" position, preferring to remain as far away from the Japanese as possible.

            It was well they did so. During, June the situation radically, altered.  The elite invasion forces were withdrawn from further duty in the southwest Pacific, to be replaced by second rate garrison troops.  Treatment of civilians became harsh and arrogant.  Stores were commandeered, possessions looted, women raped.  Beatings and, executions became almost, commonplace inflicted for the slightest provocation.  Patrols were sent out to apprehend un-surrendered American soldiers and civilians, and it was announced that any who failed to turn then selves in by 30 June would be subject to the death penalty.  Civilians suspected of giving aid to un-surrendered soldiers were beaten and tortured.

            In the prison camps also, those who surrendered were learning the cruelty of the conqueror. There were many escapes, despite a cruel death to any recaptured, and indiscriminate executions of prisoners in retaliation for those who succeeded. Gen. Guy 0. Forte was executed on 11 November, on the. Charge he had failed to surrender all his military stores, but actually because he refused to help the Japanese in inducing the Moros to surrender their arms.

It was this brutality of the Japanese occupation forces that stimulated the rise of guerrilla bands and ensured their support from the people. Throughout all Mindanao un-surrendered soldiers were organized into guerrilla bands to get back at a hated enemy.  Small at first, their numbers increased through the addition of volunteers and released or escaped prisoners.  But there was little cooperation among them.  Many were antagonistic, jealously defining their own small areas, or seeking to expand them at the expense of others.  Not all were well b___ some hardly better than b__.  Still, to the civilians even they were preferable to the Japanese.

At every opportunity Japanese patrols and forage parties were ambushed , if for no other reason than  __at arms captured in such ___ served to strengthen the guerrilla groups. By August, the Japanese seldom left their garrisons and then only in large heavily armed patrols, or in armored cars along the main highways.  The guerrillas grew, in numbers and launched attacks

against the smaller and more isolated garrisons.  Such attacks often lasted for days, ending only when Japanese reinforcements arrived, or when the guerrilla ammunition was exhausted.

            Among those who had refused to surrender was Capt. Luis P. Morgan and his 8th Lanao Company (Philippine Constabulary) which were located in the area of Kolumbugan.  Morgan was a born leader and attracted to him many un-surrendered soldiers and small guerrilla bands.  As his force increased, so did his administrative problems.  Realizing he did not have the ability to handle this alone, and hearing that an un-surrendered American officer, Lt. Col. Wendell W. Fertig, was in the vicinity, Morgan contacted him suggesting, Fertig take command of his forces.

            Col. Fertig, a mining engineer and Reserve officer, had served on both Bataan and Corregidore.  Ordered to Australia, he was among those who left Corregidore .29 April on two PBY flying boats.  Stranded in Mindanao when one of the aircraft punctured a pontoon on lake Lanao, Fertig served as a demolitions officer for Gen. Sharp.  When Sharp surrendered, Fertig with two companions attempted to join Gen. Fort who, rumor had it was still fighting.  Before he could, do so, Fort had surrendered. Since then Fertig had bided his time, waiting for just such an opportunity as now presented itself

            Morgan, of course, intended to use Fertig as a figurehead shuffling papers at some desk, while he would remain in actual command. Fertig was well aware of. this, but had ideas of his own. With Morgan's unit as a beginning, he envisioned nothing less than the unification of all guerrilla groups, under a single command -- his.

At a-meeting with Morgan and his officers on 18 September, Fertig agreed to take command with the assumed rank of Brigadier General.  As there were already several guerrilla leaders calling themselves "General" it was decided also to spread the rumor that Fertig had arrived by submarine from Australia, to command the guerrilla forces. Morgan was to be Chief of Staff, with the rank of Lieutenant Colonel.

ordered the collection of all privately owned firearms which were still stored in municipal buildings, and that Japanese forces, were small and scattered.  Fertig immediately sent Morgan with a large force to seize the arms.  Within a week all of Misamis Occidental and northern Zamboanga under Fertig's control, with the American and Philippine flags flying side by side from government buildings. The Japanese troops had been sent to join their ancestors.

            In early October Fertig established his Headquarters in the Municipality of Misamis, from which he issued a Proclamation (backdated to 18 September) reestablishing the Commonwealth Government in areas under guerrilla control, signed. W. W. Fertig, Brigadier General, USA Commanding.

            He officially designated his organization as the United States Forces in the Philippines (USFIP), Mindanao and Sulu Command.

            Well aware that the support of the civilian population was essential for success, Fertig's first acts were to restore civil government, appointing "Military Governors" for Lanao, Misamis Occidental and Zamboanga. All loyal officials were urged to remain in office, those suspected of having collaborated with the Japanese were replaced.  All laws and regulations of the Commonwealth Government were to remain in effect except those which conflicted with military authority. To insure a minimum of friction in this respect, Fertig appointed highly respected civilians as Civil Affairs Officers to handle liaison between the military (guerrilla) force and the civil government.

            Just as things were getting, organized a motor launch bringing Japanese reinforcements attempted to dock at Misamis. It was beaten off with over forty Japanese killed.  This incident certainly helped to enhance the prestige of the new command.

            Word was sent into the hills and mountains for all un-surrendered soldiers, particularly Americans, to report for duty.  Over a hundred Americans reported, 90% of them of enlisted men. They were put to whatever duty they seemed to be suited for and eventually most of the enlisted

Men were given Commissions as guerrilla officers.

            Morgan with headquarters Expeditionary Forces was sent on a mission that reached into out skirts of Japanese occupied Zamboanga City where they destroyed the hydroelectric plant. En-route he contacted other guerrilla groups which joined the USFIP.  After he returned he undertook a similar mission in the opposite direction, which took him as far as Leyte.

            Liaison officers were sent to contact guerrilla units on other islands stressing the need for cooperation to combat a common foe.

            Slowly the organization was expanded and consolidated. But it would be over a year-and formal. recognition by MacArthur before the “hold-out" in Mindanao came under Fertig's command, and civil government could established in the other provinces. During that time Fertig would put down five mutinies, one of them led by Morgan.  That he was able to do so without bloodshed is a tribute to his tact and ability.  Even more remarkable was that he not only put a stop to Moro depredations, but obtained their support in fighting the Japanese. Considering that the Moros were far better armed than own forces, it was a remarkable accomplishment. His command included not only Mindanao and Sulu but Negros Oriental and a part of British North Borneo.  His influence although not always for the ___ would be felt in Leyte, Borneo and Cebu. His Intelligence network would extend from Borneo; to ___ and among his trusted agents were Catholic Priests and the Japanese puppet government:

One of the major problems confronting Fertig was a matter of finance. In the beginning, such was met with voluntary contributions and by signing vouchers which were readily accepted for food and other supplies.  The old Spanish Custom of requiring every able bodied male civilian contribute so many days service each month was revived. C___ officials voluntarily served at h___ and the military force receoved only token pay to provide for necessities.  A Women's Auxiliary manufactured soap wool and made even this could not finance both the military force and the civil government. The dilemma was I solved by printing currency.

            Let us, for a moment, go back to the outbreak of the war. The enormously increased military expenditures created a shortage of currency.  With the Japanese occupation of Manila all currency supplies for the southern Philippines were cut off.  Commonwealth President Manuel L Quezon authorized the creation of several currency boards to print currency to meet the emergency, best even these were insufficient. Many Provinces in Mindanao were: authorized to print currency only, if necessary, to an amount up to two thirds of their unencumbered bank deposits.  Among those which did so was Misamis Occidental.  The Currency Committee was composed of F. D. Pacan, Provincial Treasurer,, as Chairman, with Ireneo Barbasa, Provincial Auditor, and Ramon 0. Nolasea, Provincial Fiscal, as  Members.  They issued only two denominations; fifty centavos and one peso, both printed an white paper. Although they were authorized to print over a million pesos, only 74,999 pesos were printed when the paper supply was exhausted and printing operations ceased. (See the October 1974 issue of B.N.R-)

            The Committee therefore still retained the authority to print the un-issued balance. This was brought to Fertig’s attention as a solution to the financial problem.

            It took time to contact the Committee members, some of; whom were in Japanese occupied cities, and to arrange for their "escape" to the free areas.  It took time also to procure stocks of paper and ink. Finally, in December, 1942, the Committee resumed printing of currency. As fractional change was a dire necessity, notes of 10, 20 and 50 centavos were printed.  The one-peso denomination was omitted to conserve paper, and notes of two pesos and five-pesos were printed instead. Brown wrapping paper was used, as it was all that was available. By the middle of January, 1943 the authorized amount had been printed and the Currency Committee was dissolved.

            The serial numbers printed, and quantities issued are as follows:

10c 0001-100,000

(99,983 issued)

20c 0001-100,000

(99,985 issued)

50c 30,001-260,000

(227,000 issued)

2.00 0001-100,000

(100,00( issued)

5.00 0001-120,000

(116,492 issued)

            A total of 925,955.70 pesos were; issued. The discrepancy between the number of notes printed and: issued is due to; (a) a Japanese bombing attack an the capitol buildings in Oroqueita on 26 December which destroyed 3,000 fifty centavo notes and 3,500 five peso notes, and (b) misprinted notes which were destroyed.  The numbering of the fifty centavo notes commenced where those of, the pre-surrender emergency printing had ended.

PART 2

            In a nipa hut, some distance from the barrio of Bonifacio near the foot of Panguil Bay, the Radio Section of the Mindanao-Sulu Command, USFIP, was attempting to build a long range radio transmitter. Their instruction manual was an old I.C.S. correspondence course; their equipment was what ever they could find, and makeshift substitutes for whatever they couldn't.  By trial and error the work proceeded. The result was an unbelievable maze of wires and parts that filled the hut and covered the walls.

            In December, 1942, the contraption began to hum and show signs of life.  That it actually worked was proven when contact was made with a small ham set operated in Negros by Roy Bell.  Thus encouraged, they kept sending ever the 36 meter band.  I CALLING CQ. CALLING CQ, WE HAVE URGENT INFORMATION FOR MIIITARY AUTHORITIES! IN AUSTRAIJA, followed by a short message in code, based on an old military cipher. The days crept slowly by, becoming weeks. And still no answer.

            The message was being received.  In fact it’s screeching and wailing was a major headache to the operators who manned radio station KFS in San Francisco.  But they were trying hard to ignore it.  Intelligence had quickly decoded the message, but as the cipher was one discontinued after the fall of corregidore it was considered a Japanese trick, an attempt to jam their reception.  Answering would inform the Japanese that their efforts were successful. Christmas passed and the New Year began, finally information from other intelligence sources indicated the messages might be authentic.  KFS was instructed to reply.  Thus: contact was finally established, and a new code set up. The information was duly passed on to intelligence, and Fertig-was instructed to stand by.

            Meanwhile over in Panay, Col. Peralto had already established radio contact with MacArthur in -Australia on January 16, 1943, a message from MacArthur designated Peralta as MILITARY GUERRILA CHIEFTAN OPERERATING IN TEMPORARILY CONQUERED LAND. The jubilant Peralta lost no time in spreading this good news through the Visayas. In Negros Roy Bell picked it up :and in turn passed it on to Mindanao.

Fertig was furious. Previously Peralto had agreed to place his IV Philippine-Corps under the command of "General Fertig." But communication by courier were slow and hazardous. No acknowledgement from Fertig had been received by Peralto when he established radio contact, and if it arrived later it was conveniently forgotten.  The first to establish. Radio contact, Peralta had no intention of sharing the rewards.

Fertig’s impatience and frustration continued to grow as he sweat out the days with no further word from KPS. His-own position was none too secure.  Many rival organizations on Mindanao continued to remain aloof. Worse still, some-were openly antagonistic.  Official recognition by MacArthur would enable Fertig to bring these organizations under his control.

As January came to an end, Fertig could stand the frustration no more.  In a message addressed to the War Department, Fertig radioed KFS. . . AS SENIOR AMERICAN OFFICER IN THE PHILIPINE ISLANDS I HAVE ASSUMED COMMAND OF -MINDANAO AND VISAYAS WITH RANK OF BRIGADIER GENERAL -- AS LEADER OF THE GUERRILLA FORCES WE HAVE REACTIVATED THE USFIPI AND ESTABLISHED CIVIL GOVERNMENT IN THE HANDS OF DULY ELECTED COMMON-WEALTH OFFICIALS. And that, thought Fertig, should take care of Peralta.

Unknown to Fertig, MacArthur had already been accurately informed about the Mindanao-Sulu Command. Charles A. Smith had made it to Australia.

Smith a mining engineer from Masbate Consolidated had served, as a demolitions officer for Gen. Sharp along with Fertig. He too had taken to the mountains rather than surrender, and in July had joined Fertig. But he had gotten it; into his head that he could sail small boat to Australia, and Fertig couldn't talk him out of it.  Smith, with a few companions, had started out in early December and reached Australia New Years Eve.  The party was promptly flown to MacArthur's headquarters, where :they were interrogated on all aspects of the Philippines. It was while their reports were being carefully studied that the War Department forwarded on Fertig's message.

Fertig would-have been better off if the message had never been sent.  The brass in Australia didn't take kindly to his promoting himself to General rank.  There was also this, matter of the Visayan Islands, which Peralta had already reported were organized into the IV Philippine Corps under his command.  The situation obviously: called for immediate action before things got entirely out of hand.

The best course of action would be to send an observer to Mindanao, who could evaluate the situation and report directly to MacArthur.  The Navy had previously agreed to the use of their submarines for such purposes, and a "Penetration, Party" from the Intelligence Bureau had already been sent to Negro.  Another submarine was now available and a similar party could be sent to Mindanao, along with a few tons of supplies and propaganda materials.

But it would take time for such a party to reach there, and the urgency of the situation called for immediate action. Peralta was ordered- to dissolve his IV Philippine Corps, and his command was restricted to the fifth Military District (Panay). Fertig was radioed.  COMMAND AREAS WILL. BE PROGRESSIVELY ESTABLISHED ON EXISTING MILITARY DISTRICTS. COMMANDERS OF DISTRICTS WILL OPERATE UNDER CONTROL OF THIS HEADQUARTERS, AND ASSIGNMENT WILL BE SUBJECT, TO REVIEW ON BASIS OF PERFORMANCE. LT. COL. FERTIG (CF) INF. IS DESIGNATED COMMANDER 10TH MILITARY DISTRICT (MINDANAO) . . . NO OFFICER OF RANK OF GENERAL WILL -BE DESIGNATED AT PRESENT.  MACARTHUR

            Fertig had hoped his message would result in action, which it did, but hardly in the manner he anticipated. MacArthur's orders left him stunned.  In vain Fertig protested that his assumed rank, was essential, that Oriental Negros had voluntarily joined his organization. His protests were ignored. The Sulu Islands did remain under his command as they were part of the 10th Military District.

            On February 6th, 1943, Fertig, issued General Order No. 16, re-designating his command as the 10th Military District, USFIIP, to- take effect as of March 1st. In a subsequent order he continued in force all Orders, Directives and Proclamations previously issued in: his name as Commanding General of the Mindanao-Sulu Command.  But even though he reverted to his pre-surrender rank of Lieutenant Colonel, he would always be "the General" to the people of Mindanao.

            In Australia, plans to send supplies and observers to Mindanao went forward swiftly.  On February 17th the submarine USS Tambor unobtrusively departed.  Aboard were two officers from MacArthur's Intelligence Bureau.  Charles A- Smith, in the uniform of an Army Captain was returning as supply officer to the very place he had risked his life to leave.  As MacArthur's "observer" was Lt. Comdr. Charles “Chick” Parsons, USNFL.  Chick" Parsons was a prominent Manila businessman with varied interests had made him well acquainted with the Philippines.  At the outbreak of the war he was the head of Luzon Stevedoring and had temporarily acted Panamanian Consul.  A Reserve Officer, he had been called to active duty and assigned to Naval intelligence.  When the Navy evacuated Manila, the Reserve personnel were left behind.  “Chick" simply returned home, took off his uniform, hoisted the Panamanian flag over his residence and proclaimed himself the Consul of a neutral nation.  When the Japanese arrived he spoke only Spanish announced the Consulate closed due to the war, and demanded repatriation to Panama.  The foreign community was so appalled at the atrocious conduct of the Japanese troops that not even the German or Italian embassy betrayed him.  Parsons and his family were among those repatriated in mid 1942 on the Swedish liner Gripsholm. On reaching Washington he reported to the Navy for duty.  His first hand reports of Japanese activities in the Philippines were of great value to Naval intelligence and the Department of State.  At MacArthur’s request he was flown to Australia where he was assigned to the Philippine Regional Section, (PRS) of MacArthur's Allied: Intelligence Bureau (AIB). He too was now returning to the Philippines.

Fertig duly informed of the time and rendezvous area where four tons of supplies would be delivered by submarine. To anyone as desperately short of everything four tons seems a lot. He was therefore present when the USS  Tamor arrived at Pagadian Bay on March 5th. There were radio transmitters carbines, ammunition and medicines.  There were 29 matches and small packages of cigarettes on which were printed "I Shall Return. MacArthur”.  There were even recent magazines and 10,000 dollars U.S. and 100,000 pesos in Philippine currency.

But the four tons sounded like a lot, as supplies were brought ashore he realized how little it really was.  Distributed, it would; amount to a few carbines per regiment, a handful of cartridges per man.  The currency would be: only half as much when he learned he was to send half of it to Peralta.  Still, to men so short of ammunition, that empty brass cartridge shells were re-loaded with homemade powder and a sharpened piece of brass curtain rod for a bullet, even a handful of new cartridges would be a prize.  The radios would enable quick communications with units which now required days and weeks by courier.  The important point was not the amount, but that it was here, proof that they were not forgotten, that aid was on the way.

            He had not been informed that Smith and Parsons were coming, so Fertig was both pleased and surprised to greet his friends. That is, until they bluntly told him they were sent to investigate both his: organization and his ability to continue as commander. He had barely recovered from that low blow, when they delivered a few more.  MacArthur wasn't interested in how many Japs they killed he wanted only one thing -- intelligence information.  The radios were to set' up a coast watcher network, the carbines and ammo were for the networks protection. The guerrillas were to lie low, avoid contact with the enemy, devote their efforts to gathering information.  They would be amply supplied with arms when MacArthur returned and could kill Japs then.

            Fertig could hardly believe his ears.  Did they really think in Australia that the civilians would continue to support the guerrillas if they, in turn, did nothing to protect the civilians?  Did they believe that guerrillas whose families had been tortured raped and murdered, would be content to sit idly on a mountain top scanning the seas for a passing ship?

            Both Charlie and "Chick" I agreed with Fertig.  But as they pointed out, it was not what they: thought, or Fertig thought, it was what the brass in Australia thought.  Particularly Gen. Charles A. Willoughby, who was head of PRS.  Willoughby didn't think that. any gang of  bare foot guerrillas were going to succeed where a regular army had failed.

(Willoughby-would become renowned as having the best hind sight of anyone in the Pacific).

            To protect those radios, Fertig pointed out, was going to take more than a few carbines. The Japs had vectoring equipment which would detect their location, and they would attempt to silence them. He would need automatic weapons, machine guns and mortars.  Of course, they agreed, but if he got them he must not use them in an offensive manner.  Certainly not, Fertig assured them, farthest thing from his mind.

            The arrival of the Submarine and news of "the aid" spread like wildfire.  The cigarettes and matchbooks were widely distributed and even when empty, continued to pass from hand to hand.  The magazines gradually fell apart, but got an even wide circulation as individual pages were passed on. They were the proof of the aid, proof they had not been forgotten.

            Rival guerrilla groups which had remained aloof now willingly joined with Fertig.  Datu Busran Kalaw, General of the Maranao Moro battalions accepted a rank of Major in the USFIP, as did General Salipada Pendatun of the Cotabato Moro’s

            Pendatun's force was as large as Fertig's and far better armed.  Immediately after the surrender the Moros had looted the USAFFE depots, as well as taking arms from, deserting and fleeing soldiers. They held the interior of Cotabato and the southern part of Bukidnon.  Pendatun had earlier agreed to cooperate with Fertig, but when Fertig misconstrued this as submission, relations had become considerably strained.  Fertig resented Pendatun's using the rank of general, but Pendatun was more entitled to the rank than was Fertig.  Pendatun had not assumed the rank as had Fertig. He had been elected to generalship by his officers, some of whom were Americans.

            In April, Quezon created a second Mindanao Emergency Currency Board, which under Maj. Sam Wilson was soon turning out currency in the barrio of Matugas, near Jiminez.  This was the same Sam Wilson, who as a Naval lieutenant had supervised the printing of currency by the first Mindanao Emergency Currency Board, prior to the surrender.

            Two more small shipments of supplies arrived by submarine, this time the USS Trout at Basilan on May 26th, and at Pagadian Bay an June 12th.  The Trout was scheduled to arrive again on July 9th, with more supplies, and also to evacuate Smith and Parsons to personally report to MacArthur.

            Eleven months had passed since Fertig had first assumed command, and all this time the Japanese had, strangely left them comparatively unmolested But the Japanese had not been idle quietly by reducing a garrison here eliminating another there, they had successfully built up and trained a large force in anti-guerrilla  operations. 

On the morning of June 26th the Japanese struck swiftly and with a large force.  A cruiser and two destroyers shelled the shore while Japanese troops landed from transports Japanese aircraft strafed the beaches, villages and towns.  Landings were made at: several points along the northern coast as as well as in southern Zamboanga, Caught by surprise, with shells crashing around them, the guerrilla soldiers manning the beach defenses simply fled. All of Fertig's carefully laid plans an hopes came crashing down around his ears.

Sam Wilson hastily burned thousands of pesos in partially printed money, buried the plates, and hid presses in the jungle to prevent their capture. The Japanese moved rapidly inland, with almost no opposition. Smith and Parsons narrowly escaped the Japanese. They struggled over the mountains to the submarine rendezvous.  Pagadian Bay was in Japanese hands, they met the submarine in the launch General Fertig, at a new point, far offshore. But on its return with the supplies, the launch was lost to the Japanese.

Miraculously, the civil government escaped capture, as did nearly all of the guerrillas. Slowly, in small groups guerrillas began to fight back.  The groups became larger and better organized. Day by day the resistance to the invader increased and the Japanese began to withdraw into the coastal towns.  Less than a month after complete

disaster, the guerrillas once again became an organization, leaner an tougher than before.

            With the coastal towns in Japanese hands Fertig, in August temporarily set up his headquarters; at Liangan, Lanao, where after considerable difficulty, printing currency by Sam Wilson was resumed.  In November, the headquarters was moved to Esperanza in Agusan.

            On the night of November 15, 1943, the USS Narwhal, a large cargo submarine, tied up at the dock in Nasipit on the shore of Butuan Bay, while the band of the 110th Division USFIP blared forth with the Stars and Stripes Forever.  “Chick” Parsons had return to personally deliver 92 tons of supplies.

            There were not just carbines, but, submachine guns, 50 calibre machine guns, bazookas, rocket launchers and 20 mm cannon, although somehow ammunition for the cannon had been overlooked.  “Chick" assured Fertig the Narwhal would return again in three weeks with more supplies including the 20 mm ammo.  There were jungle boots and khaki uniforms radio, tools and spare parts.

            There were propaganda supplies, book matches, cigarettes, chocolate bars, magazines and MacArthur's: newspaper “Free Philippines”. And although there was no postal service on Mindanao there were even guerrilla postage stamps inscriber "Free Philippines."  Affixed carrier mail and cancelled .with proud slogans, they would be a morale buster to all those who saw them.

There were thousands of pesos in genuine Philippine currency, a million pesos in counterfeit Japanese occupation notes. There was paper and printing supplies and engraved metal plates from which to reprint guerrilla currency. There were even letters from home.

It was an historic occasion, a U.S. Naval vessel docked a thousand miles behind Japanese lines. Not, one to let such an opportunity to slip by, Fertig had even arranged for Col Kangleon of Leyte, and Maj. Ingeniero of Bohol to be present and that, thought Fertig would eliminate Peralta's influence in those islands.

            In five hours the cargo had been. completely unloaded. When, just after midnight, the sub departed, it took with it 32 American evacuees, including 8 women, 2 children, and 1 baby.

            As scheduled, the Narwhal returned on December 2nd, with 90 more tons of supplies. This time it brought back Charles Smith, now a Lieutenant Colonel, who would go on to Samar as an Allied Intelligence agent and eventually, restore communications with the numerous Luzon guerrilla units.

            In late December the Japanese again re-invaded Mindanao in force.  No longer did the guerrillas. simply run.  This time they fought with determination.  They could not prevent the Japanese penetration, but they made it costly. It was a, conflict that continued almost unabated for over a year and a half more. Anticipating that the Americans would eventually land, in Mindanao, the Japanese continued to pour in reinforcements.  Fertig's guerrillas were confronted with a force five times as large as the Japanese had needed to capture the island originally.

            On October 20, 1944, American Liberation forces landed in Leyte.  But it was March, 1945, before any American forces landed in Mindanao.  In the meantime, it was the guerrillas who fought the Japanese.  When the first American forces did arrive in Mindanao, they landed from transport planes at the guerrilla held airfield in Dipolog Zamboanga. The next day a landing was effected unopposed at Zamboanga City.  By the first of April the Zamboanga peninsula had been secured and the guerrillas were left to mop up.  On April 17, American forces landed at Parang (Cotabato) and Malabang (Lanao), the identical points the Japanese! had landed on April 29, three years before.  But thanks to the guerrillas, the Americans landed unopposed.  By June 30th, the U.S. Army considered that organized, resistance in Mindanao had ceased.  But for the guerrillas in Mindanao, the fighting would continue until the end of the war.  That such fighting was hardly desultory can be gleaned that over 23,500 Japanese surrendered in Mindanao after hostilities ceased on August, 15, 1945.

If any reader is interested in delving further into the Mindanao guerrilla movement, may I recommend you check your local library for two very good books on. the subject: Guerrilla Padre in Mindanao  by Father Edward Haggerty (Longmans, Green &Co., New York, 1946), and They Fought: Alone by John Keats (.J. B. Lippincott, 1963). The latter is also available in paperback, by Pocket books, Inc. No.-75058.

Part 3

            In October 1942 the headquarters of the Mindanao-Sulu Command, USPIP, was established in the municipality of Misamis, province of Misamis .Occidental.  Shortly after this, Wendell W. Fertig, Brigadier; General USA, Commanding, issued a Proclamation reestablishing the Commonwealth government in those areas, under guerrilla control. At that time this consisted only of Misamis Occidental and the, northern part of Zamboanga.

            Beset by enormous difficulties, Fertig's command was gradually extended to cover all of Mindanao.  Among the ma)or problems confronting Fertig was the matter of currency and finance.

            Prior to the-occupation of Manila by Japanese forces, the Commonwealth government, and its Treasury, had been evacuated to Corregidore.  Realizing that it would be almost impossible to send currency supplies from Corregidore to the southern Philippines, President Queizon had created several Currency Boards which he authorized to print and issue emergency currency. Two such boards were created in Negros, one in Panay, two in Cebu and one in Mindanao.  Even this had not provided sufficient currency, so Quezon also authorized the Provincial Treasurers to print emergency currency, if necessary. In Mindanao alone, four Provinces had done so.

            Thus there was in circulation in Mindanao a wide variety of emergency currencies which even

been regared with a certain amount of distrust, and often accepted with reluctance. Such notes tended to circulate as less than face, either by being discounted. Or by an increase in price of commodities when they were presented in payment. To further complicate matters, the circulation and use of the emergency currencies had been, strictly prohibited by Japanese military authorities, who were, introducing their own military notes.

            To shore up the depreciating value of the emergency notes Fertig issued a-Proclamation dated 16 November 1942, ordering that

            (1) No person shall discriminate between the emergency notes and the old Philippine currency nor increase the prices of foods stuffs or any article sold to the public if the money paid therefore is in the form of emergency notes.

            (2) No person shall engage in, the purchase and sale of emergency notes at a depreciated value through payment there fore with old Philippine currency.

            (3) Any person violating the provisions of this Proclamation shall be punished as the Military Authorities may direct.

This proclamation was followed on 25 November by a circular which stipulated the punishment to be meted out: 1st offense: 1 to- 10 days detention

2nd offense: 11 to 20 days detemtion

3rd offense:  21 to 30- days detention

For any offense committed :subsequent to the third offense detention for the duration of the emergency. Fertig ordered that both the proclamation and circular be given wide publicity and conspicuously posted in public places.

Even so, the pre-surrender “emergency” notes never achieved the same prestige as regular Philippine currency. They were accepted primarily, because “real" currency had almost disappeared from circulation.

In January Fertig established radio contact with MacArthur's headquarters in Australia.  As a result his guerrilla I organization was officially reorganized and designated the 10 Tenth Military District.  Fertig was named Commanding Officer with his pre-surrender rank of Lieutenant Colonel.

            Having achieved official recognition, Fertig radioed MacArthur his future plans which were: (a) issuance of a, proclamation canceling the authority given by President, Quezon to Provincial: governments to print currency, (b) to reconstitute the Mindanao Emergency Currency Board with new members, (c) to use previous authority granted the original board by Quezon to print currency, and (d) to use the currency thus printed to finance the civil government and the military forces of the Tenth Military District. (Fertig even sent along a requisition for printing supplies he would need.)

            These "future plans" created quite a stir at MacArthurs headquarters, and resulted in a barrage of messages to Fertig. Apparently they were not nearly so well informed about Philippine matters as Fertig had been led to believe. In a carefully worded reply, Fertig patiently explained:

"Central control of financial situation here requires use of one central board, namely Mindanao Emergency Board, continue to exercise power as originally granted to issue emergency notes civil, and military requirements for, entire Tenth Military District. Appointment new personnel to the board as necessary as, personnel former board namely Guingona, Laya, and Alagaban are now in control of enemy. New personnel recommended are government officials chosen for proximity this headquarters and for their splendid cooperation with military organization. Request approval appointment new members Mindanao Emergency Currency Board as recommended

and authority to issue such currency as may be required for civil and military Purposes under supervision and control this headquarters."

            That cleared things up a bit it also solved a problem MacArthur's staff had been wrestling with -- whether MacArthur should grant Fertig permission to print “military script” as had been previously granted to Col. Peralta in Panay.  Fertig's plan eliminated any such necessity.  Of course it dumped the currency problem in the lap of President Quezon, but that was fine with MacArthur, just so long as it wasn't his own lap.

            Accordingly Fertig's recommendations were radioed to President Quezon in Washington, without comment, leaving the decision entirely up to him.  Quezon never hesitated. -Back came a prompt reply, which MacArthur duly passed on to Fertig:

            "I appoint Judge Florentinol Saguin, Provincial, Treasurer Filomeno Pacana and Provincial Auditor Isidoro Barbasa as new Currency Board and they are hereby given the same authority granted to previous; board not repeat not only for military requirements but limited amount for relief of the civilian population."

            (For the record, I must here point out that Auditor Barbasa's first name is "Ireneno” not “Isidoro" -as given in the message.  The mistake was Fertig's, as he gave the name, wrong when he submitted them originally.  Understandable perhaps as Barbasa rarely used his first name.)

            In Mindanao, preparations for printing currency had already gotten well underway.  Sam Wilson, now a guerrilla Major, was once again in charge of printing operations.  As fractional notes were badly needed, it was planned to issued currency in denominations of 10, 20 and 50 centavos, along with denominations of 1, 2. 5, 10 and 20 pesos.  Wooden "cuts" had been made for the 2 peso note (face only) and for both sides of the 5, 10 and 20

Peso notes along with commonwealth "seals" and facsimile signatures of the members of the Currency Board.  All other printing would be from metal type. Stocks of brown wrapping paper had been acquired, which was all that was available.

            As soon as printing got underway , Fertig issued proclamation back dated to 1 April announcing Quezon’s appointment of a new Mindanao Emergency Board with authority granted the currency board with authority to print circulating notes in such quantity as necessary, which were to be accepted at par with regular Philippine currency . Also, that the authority granted the Provincial governments to print currency ___oked for all provinces in the tenth Military District

            Fertig did not have authority to inhibit the printing of currency __  the different provincial governmentes , which had been granted by Quezon. But ___ was taking no chances that some rival guerrilla group to copy his own example, ___ currency in one of the ___ as he had previously ___ Misamis Occidental. No ___ Quezon would have ___ this authority himself  ____ portion of Fertigs plans ___ sent to him, but for some reason MacArthur had avoided that little matter.

Printing operations began 5 ___ 1943, at Matugas, a small ____ of the municipality of ___ Misamis Occidental ___.  The actual printing ___ under contract by ____ Z. Bararro, who was ____ stipulated amount for ____ thousand notes printed. ___, the printing operation as well as the checking, and numbering, counting and packaging was done under the supervision of Representaives appointed by the members of the Currency Board. (The __ members were far too __ with other matters to be ___do this in person.)  When ___ and packaged, the money was turned over to

Provincial Treasure Filomeno D. Pacana who in turn distributed them to governmental agencies and guerrilla finance officers as needed. Prior to distribution, however, the-large peso denominations were countersigned by hand, on the reverse, by individuals specifically authorized by the Currency Board to do so.

On 26 June 1943, the Japanese invaded Misamis Occidental. They caught the guerrillas by surprise and rapidly moved inland.

At Matugas the press personnel were awakened early that morning by the roar of Japanese planes and the sound of gunfire.  Not long afterwards people fleeing from the Japanese reported that Misamis, Clarin, Tudela and Oroquieta were already in Japanese hands.  Sam Wilson arrived and directed preparations to evacuate. Thousands of pesos in printed but undelivered currency were hurriedly burned.  The presses were hastily dismantled and along with remaining stocks of paper and ink were sent to the hills to be hidden. Printing plates and type too heavy to be carried with them were buried, and personnel dispersed to the hills. When the Japanese arrived there was no remaining trace of the "mint".

In Oroquieta that morning, Provincial Treasurer Pacana was alerted very early to the danger.  Hurrying to the government building housing, the Treasury he alerted the soldiers assigned to guard duty there. With their help the currency on hand, amounting to 702,619.30 pesos was packed into four sacks. They evacuated the town just ahead of the advancing Japanese. For the next eleven months Pacana would carry out his duties as Provincial Treasurer in remote areas, prudently moving the Treasury from place to place staying always just ahead of Japanese patrols who were searching for him.

After being driven out of, Misamis Occidental the headquarters of the 10th Military District was relocated at Liangan, a barrio of Kolumbugan in Lanao Province.

As time passed and the currency supply dwindled it be- came obvious that steps would soon have to be taken to replenish it.  Retreiving the presses from their hiding place in the hills of Misamis Orcidental through Japanese patrolled areas to Lanao presented enormous difficulties. The presses were made of cast iron and had to be handled with caution to avoid breaking some vital part.  Paper would have to be brought from as far away as Zamboanga.  Confronted with these difficulties, Fertig came to the conclusion that it would solve a lot of problems if the currency could be printed in Australia and sent in by submarine. He suggested this possibility to MacArthurs, head quarters.

“Finances fifth August: We I have money to carry on for thirty days. During that period I we will attempt to move printing presses and plates thru enemy blockade to new safe location . . . . however an issue of currency, to be printed in Australia  would solve, difficulty and present advantages: (a) same currency to be used in all Military Districts (b) no shortage of material or skill to produce currency to -defy local counterfeiting (c) sufficient small denominations, could be provided (d) propaganda value of currency printed and delivered to P.I. for express purpose of supporting the Commonwealth govt., civilian relief and armed forces. Imperative that we be notified of your, decision in this matter."

MacArthur’s staff recognized the validity of Fertigs suggestions and began exploring the possibilities. Printed currency would take up less space than printing supplies needed to produce a like amount, a valuable consideration in respect to shipment by submarine. Should enough be printed for all, where could it be printed?  Would the Australian government be receptive to the idea of having the State printer do the work?  Should regular Philippine currency be used, suitably overprinted as was already being done in printing HAWAII on U.S. currency for use in the Pacific.  President Quezon would have to give his approval as only he had the power to authorize such work, but it was anticipated that his approval would readily be granted.

            What was not anticipated was MacArthur's reaction. When the various proposals were put before him for his decision and approval, they were flatly rejected. MacArthur was not about to get involved in printing currency for the guerrillas.  Printing supplies yes, printed currency no Fertig was advised.

            “Printing of currency here repeat not considered practical.  Every effort will be made to keep you supplied with materials. 

            Fertig had expected his proposal would be accepted.  Stunned he realized that if they were going to get any more currency they would have to print it themselves. Sam Wilson was, assigned the difficult task of retrieving the press equipment and some how getting it to Liangan.

It took 10 days, due to heavy rains to move the press equipment from the hills down to a coast of Misamis Occidental . It was moved in three bancas across Iligan Bay at night in a drizzling rain, which helped to conceal the movement from any Japanese patrol craft that might be snooping around.  Another, week was required to move it from the coast of Lanao inland to Iligan.

In the meantime the key press personnel had been rounded up.  New cuts of seals and facsimile signatures had been prepared as well as new bo__ cuts for the five peso notes which the originals had somehow gone astray.  (They were later recovered, but were not at Liangan.)  A native shack in a cornfield near Liangan was reconditioned to house both printing plant and press personnel. Members of the Currency Board and their Representatives were scattered far and wide and efforts to contact them had been unsuccessful.  The urgency of the situation necessitated that printing operations get underway immediately, so the printing operations proceeded without them.  Mr. Ubaldo D. Laya, a member of the previous Mindanao Emergency Currency Board, had managed to escape from the Japanese, and at Fertig's request came to Liangan to lend a hand.  He was forthwith appointed Executive Secretary of the M.E.C.B. and placed in charge of the printing operation.

Printing operations got underway 6 September 1943. All small stock of white bond paper had arrived by submarine, but as the supply was- limited, it was used to print only the 2, 5, 10 and 20 peso notes. All other denominations were printed on brown wrapping paper. Countersigning of the peso denominations was dispensed with.  Not only was it a time consuming chore, but none of the officials authorized to do the signing were available to do so.  As the log books and records of the Matugas printing were in the possession of the absent members of the Currency Board, there was no record available of the serial numbers previously printing. To avoid any possibility of duplication of serial numbers, the numbering would start over again with 00001 and the serial numbers would be doubled. Formerly "A" to "I", they were now to be "AA" to "II". There are also unintentional minor variations in the handset type on all of the denominations, and of course, the new border cuts- for the five peso note varied some what from the previous cuts.

Friction soon developed between the owner of the presses and the supervisory personnel representing the M.E.C.B. Considering the difficulty under which the notes were printed, this is hardly surprising.  At one time all but one or two of the employees were suffering from either malaria or influenza and the place more resembled a hospital than a printing establishment. Notes were misprinted, miss cut and serial numbers duplicated resulting in wastage and delays.  Bacarro complained of insufficient payment causing him a financial loss; The price per thousand notes was increased, but Bacarro still considered it too little. Sam Wilson was impatient with the delays and wastage of precious supplies.  No doubt there was, ample cause for complaint on both sides.  But instead of improving, relations worsened. Finally Wilson's patience came to an end.  On 28 October he commandeered the presses and put the press personnel on the payroll of the M.E.C.B. bringing to an end the dual management and control.  Four days later the paper supply became exhausted and printing came to a halt.

Coincidentally, enemy activity in the area intensified.  Five enemy transports were reported unloading troops in Iligan Bay.  The situation became a bit precarious and Fertig decided to move the headquarters and the mint into the interior of Agusan province, somewhere along the Agusan River which would permit water transport of supplies.  The presses were dismantled, crated and moved to Liangan ready for further movement to the coast should transport arrive in time or into the mountains should the Japanese arrive first.

Each of the two presses weighed in the neighborhood of a ton each. It would be an impossibility to move them over the mountain ranges streams and rivers that lay between Liangan and the Agusan River. Movement would have to be by, water.

As the cargo submarine USS NARWHAL was scheduled to arrive at Nasipit, Agusan with 92 tons of supplies around the middle of November Fertig got the idea that after unloading the supplies the submarine could easily come into Iligan Bay, pick up the presses and move them to Nasipit.  Off went a radio message to MacArthur requesting use of the submarine for that purpose.  The request was disapproved.  MacArthur wasn’t about to risk the loss of-the only submarine then available to him on such a venture.

            For four weeks the presses and press personnel remained waiting at Liangan expecting the Jap’s to appear at any time.  Finally, on 28 November, a motorized banca part of Fertig’s "navy" arrived to move the presses.  It was barely large enough for the presses and a few key personnel.  The others were left behind.  Moving along the coast by night and hiding by day, they reached .Nasipit where they transferred to other craft for the river passage.  They finally arrived at Fertig's new headquarters at Esperanza on 7 December.

            In the meantime the USS NAITWHAL had delivered the supplies at Nasipit on the night of 15 November.  Among the printing supplies were 30 boxes of paper, 27 cans of ink and dryer, assorted press equipment and 84 zink coated bronze plates for printing currency.  The plates for the 2, 5 and 10 peso notes were almost identical to the Matugas printing. The Plates for the other denominations differed considerably in border designs. No doubt some of the guerrilla notes taken to Australia by Charles Smith and “Chick" Parsons when they returned on the USS TROUT were used in preparing the plates.

During the sea passage the press equipment had gotten wet from the sea water and was already beginning to rust.  Several days were required to clean the equipment and put it in good working condition. While this was being done new personnel were recruited to replace the people left behind, and given some instruction in their new jobs.

            Printing, operations got underway again on 13 December 1943, using the metal plates brought from Australia.  As there were no metal plates for the five centavo and twenty peso denominations these were printed from the same type and cuts as before.  All denominations were now printed on white paper. Serial numbering continued from where the Liangan printing had left off.  The "double" serial letters were continued, although the type size varied.  Some denominations were printed with both “wide" and "narrow" serial letters.  However, distinguishing between the notes printed at Liangan and those. printed at Esperanza is really quite simple.  The 5, 10, 20, and 50 centavo notes and the 1 peso note were all printed on brown wrapping paper at Liangan, on white bond paper at Esperanza. There were 68,000 notes of the 2, 5 and 10 peso notes printed at Liangan. Notes with serial numbers higher than that figure are the Esperanza printing.  Comparison will also disclose several minor differences between the two printings. The 20 peso notes were printed from the same type and cuts at both places and can be distinguished only by the serial numbers.  As 69,000 notes were printed at Liangan, any note. with a higher serial number was: printed at Esperanza.

            On 23 January 1944 the paper supplies received from Australia were exhausted and printing operations ceased.  As intelligence from Surigao reported a buildup of Japanese troops at Liangan for an invasion of Agusan, it was decided to move the "mint" even further into the Interior.  The site selected was the town of Loreto on the Umayan River, a tributary of the Agusan.  The presses were crated and the movement began by barge on 31 January.  On 2 February the barge ran aground in the river about one kilometer below Loreto. It took six more days of hard work, employing caraboas and cargadores, to move the heavy equipment into town

Part 3

            Moving the  presses used in printing the Mindanao "guerrilia" currency from Esperanza, to Loreto, Agusan province was to afford the "mint" better protection during an expected ;Japanese re-invasion. It did not solve the problem of the shortage of paper which had brought printing operations to a halt.  By the middle of February the. presses had been cleaned, reassembled and readied for operation. But it was another month before a new supply of paper could be brought in and printing operations resumed.  The new paper supply arrived from Australia on the USS Narwhal which unloaded 70 ,tons of supplies at the mouth of the Agusan River on the night of March 2.  Another two weeks were required to move the paper up the Agusan and Umayen rivers to Loreto.  Printing operations at Loreto got underway on March 18, 1944.  As this printing would show the change in date from 1943 to 1944, it was decided to begin the serial numbers with 00001 and to resume the single, instead of double, series letters. As the metal plates brought from Australia were used it was necessary to alter them by routing out the old "Series 1943" date.  The new "Series 1944" date was printed from available printer's type.  The shortage of type resulted in some variation depending upon which denominations were being printed simultaneously -on each of the two presses.  Thus the 10 and -20 centavo notes were both printed with lower case "Series 1944" and upper case "SERIES 1944."  The 50 centavo, 2, 5 and 10 peso notes were printed with the date "1944" in both "narrow" and "wide" type styles.  All 1 peso motes seen by the author have lower case "Series" and narrow style type in the date.  There were no metal plates for the 5 centavo and 20 peso denominations.  The printing of the 5 centavo was from the same type as previous printings with the simple substitution of a "4 " for a "3 " in the date. No 20 peso notes were printed at Loreto.

            The remoteness of loreto did, as expected, protect the “mint" during the Japanese re-invasion of Agusan.  Never were the Japanese soldiers able to penetrate that far inland.  Nasipit and other coastal towns were occupied, and the Japanese forces moved up the Agusan River to garrison Butum.  From there strong patrols moved even further inland along the river.  Almost daily and often twice daily flights of bombers flew up the river valley system bombing towns along the way.  No longer was the river a highway for the movement of guerrilla supplies from the cost to the interior. Esperanza, Fertig's former headquarters was reduced rubble Talocogan, where his heaaquaters had been relocated came under attack.  Fertig prudently moved his headquarters to Waloe, even further up the Umayan River than the "mint" at Loreto.

            The coastal towns of Surigao were either occupied by Japanese or patrolled by Japanese naval craft.  No longer could supplies be moved into Augusan from the Surigao coast and a scheduled submarine rendezvous in that area had to be  cancelled.  From Davao long a Japanese stronghold came still more bad news.  Intelligence reports indicated the Japanese were building up their forces at the headwater of Agusan for a movement down that river into the interior of Agasan province.

The inaccessibility of the interior of Agusan which had made it so desirable from a standpoint of security, now, turned the area into a trap. As the Japanese moose tightened the supply situation worsened.  Even in the best of times the area barely could produced enough for its regular population. There was little to spare for the: military and press personnel.  Supplies could only be brought in over the narrow mountain trails across Bukidnon, carried on the backs of men who served as cargadores. The

routes were long and arduous.  As the cargadores had also to carry with them their supplies the net delivery was often but a fraction of the load with which they had started out.

            The stock of paper for the "mint" continued to dwindle.  The closest place from which new stocks could be obtained was Zamboanga, and by the time it reached the "mint" it, would probably be unusable for the presses. The obvious solution was to print currency where supplies were available.  But the heavy presses, even dismantled, could not be moved over the mountain trails and transport by water was blocked by Japanese control of the. lower part of the Agusan river.

            Once again Sam Wilson came, up with a solution. There was a printing press in Dipolog Zamboanga, owned by the Rev Angel Soto, a Protestant minister.  In fact it was this same press that had been used in May, 1942, to print the currency issued by the Zamboanga Currency Committee.  Wilson with key press personnel, could. travel overland to Zamboanga, and continue the printing of currency there, using the press of the Rev. Soto.  While preparations for this were, getting underway, the Japanese bombed Loreto.

            The attack took place on July 5, 1944. One bomb destroyed the quarters of the  mint personnel, another destroyed a house in front of the office building.  Fortunately, both buildings were vacant at the time.  Other bombs fell harmlessly further away.  While no one was injured, the attack had, considerable demoralizing effect.  This was further aggravated by persistent rumors that the enemy was rapidly closing in from both the upper and lower Agusan, as well as from Surigao.  As-further air attacks. could be expected, it was decided to close down the "mint."  The presses were dismantles crated. and moved into the hills where they were hidden far off beaten trails. Important records, printing

plates and supplies of paper and ink were packed, water proofed and buried.  On July 27 Ubaldo D. Laya and the press personnel evacuated Loreto taking with them the printed currency on hand, amounting to 269,210.40 pesos.  They moved further into the interior to the small town of Johnson, where they waited further developments.

In the meantime, Sam Wilson with two printing technicians, Meliton D. Apao and Francisco Teves, Jr., had already taken the long trek to Zamboanga. They carried with them such printing equipment as they could including sufficient "cuts" with which to print a full range of currency. They traveled up the Umayani River to Pagatpatan, where they began the long trek the mountain ranges of Bukidnon and Misemis 0riental.  On reaching the coast they were able to obtain transportation by small-bancas along the coasts of Misamis Oriental, Misamis Occidental and Zamboanga.  The trip took the better part of two months and it was early September when they finally reached their destination.

By a fortiuous circumstance all three members of the Mindanao Emergency Currency Board -- Judge Saguin, Treasurer Pacana and Auditor Barbasa  were in Zamboanga at that time.  Treasurer Pacana having just arrived from Misamis Occidental met Wilson at the home of Judge Saguin.  A  meeting on the M.E.C.B. was arranged, which took place at Planco, a barrio of Dipolog, an Sept., 9.  At this meeting the printing of currency in Zamboanga was authorized, and Resolution No.16 was approved. This Regulation appointed Pacana as Executive, Secretary, concurrently with his other duties making him responsible for the supervision of the "mint" and accountable for all the currencies printed.

Rev. Soto readily consented to the use of his press, which was set up on the ground floor of the warehouse in the sitio of Tookan barrio of Tingkugas municipality of Dipolog.  The upper floor provided quarters for press personnel.  A small house nearby became the quarters of Pacana in which was installed a safe for the protection of the printed currency pending its distribution.  A squad of 15 soldiers under command of a lieutenant provided security for the operation of the “mint."

            Printing operations got underway on Sept. 14, 1944.  Due to the urgent need for currency the printing of larger denominations took precedence.  No 5 or 10 centavo notes were printed at all, and only 15 of the 20 centavos denominations,  Two different “cuts” were used in printing the __ peso notes, which are readily identifiable by differences in completeness of the border and in the style of type for the year date.

Said numbering began with 00__ to distinguish this printing from previous ones the first “block” of 99,000 notes of each denomination printed have no series letters, as did the previous printings. So numbering would then serve again as they bad ___ 5 digit numbering ma___ and subsequent ___ would each have a ___ letter or number ___  from any used previously. Due to circumstances beyond the control of the _.E.C.B., this printing would take place during three separate periods at different locations. Because of this, and __ that there was no possibility of duplication, additional “blocks" wound up with ___an one series desig___ planned, which has remained in considerable con___  since. The M.E.C.B. the subsequent printings at two other locations ___ the continuation of the printing begun at Tingkugas.  ___ reason "Series 1944" ___ on all notes, even __ later printings took ___ 1945.

Printing at Tingkugas came to an end on Oct. 6, 1944, when the available supply of paper was exhausted.  As no further paper stocks were obtainable locally, or expected to be delivered by submarine for some time, F.D. Pacana settled all outstanding obligations- incurred by the "mint" returned the press to Rev. Soto and paid off all employees except the two technicians who had come from Agusan.  Pacana kept these two key men with him in order that they would be immediately, available when printing operations could be resumed.

            I will go into more detail regarding the subsequent printings under Pacana further on, but in order to keep events in a chronological order, let us now return to the "mint" at Loreto in Agusan province.

            The supply of currency previously printed at Loreto having become exhausted, and the Japanese threat having abated, instructions were issued to resume the printing of currency.  Ubaldo D. Laya and the press personnel returned to Loreto on Oct. 24, 1944.  As soon ass soon as the presses could again be assembled and the buried supplies retrieved, printing was resumed.  As this was but a continuation of the printing brought to a halt the previous July, serial numbering continued from where it had previously left off.  Printing operations got underway on 4 November but were brought to a halt around the middle of the month on orders received from Col. Fertig.  MacArthur had returned to the Philippines

American liberation forces had landed at Leyte on Oct 20, bringing with them the new VICTORY currency which was placed under a Proclamation issued by Gen. MacArthur.  Col  Fertig expected that this currency would be sent to Mindanao in as much as the guerrilla forces had officially been recognized by MaeArthur as part of the U.S. military forces.  Accordingly, Fertig wired MacArthur on Nov. 26:

            “No further emergency currency will be printed as we understand you will supply our needs with the new Victory currency.”

This was followed up in another message in which Fertig requested 600,000 pesos monthly for western Mindanao delivery to F.D. Pacann and 700,GW pesos monthly for eastern Mindanao (delivery to Ubaldo D. Laya).  The requested amount included 500,000 pesos monthly for the operation of the free civil governments.

The request was ignored.  MacArthur had no intention of: financing the guerrilla forces with U.S. Army funds.  He was perfectly content for that burden to be shouldered by the Commonwealth government. Finally, after repeated requests, for funds in which Fertig emphasized the urgency of the situation.  MacArthur on Dec.' 22, curtly replied: “No provision has been made to substitute Victory pesos for local emergency currency, until the respective areas come within the perimeter of our operation."

Stunned, Fertig realized that as far as Mindanao was concerned, the U.S. Army was just as remote as it had been before the Leyte landing took place.  If the 10th Military District was to have the necessary currency to finance operations, they would have to print it themselves.  To do so they would need paper.  Fertig therefore radioed MacArthur requesting that 150 reams of paper be delivered monthly to -F.D. Pacana in Zamboanga and 60 reams monthly for Ubaldo D. Laya in Agusan.

Since there was still a small stock of paper at Loreto.  Fertig instructed Ubaldo D. Laya  to resume printing of currency.  This printing got underway an Jan. 2, 1945.  The same plates -were used as in the previous printing except that the year date was changed from "1944" to "1945".  Serial numbering started with 000001, and thus all notes have six-digit serial numbers. Theoretically, the

same minor variations in type in "Series 1945" could occur, as the same plates were used, but due to the small amount printed this is unlikely to have occurred in all denominations. The only one I have noticed is "'Series" and "SERIES" on the 10 centavo notes. On Jan. 15, the supply of paper ran out and printing operations ceased. As no additional supplies of paper were ever received, this terminated the printing of currency in eastern Mindanao.

Apparently MacArthur's headquarters did not function as smoothly as one would expect.  On Jan. 6, 1945, Fertig, receved a radio message asking him for the dimensions of the paper he needed.  Since MacArthur had been supplying Fertig with paper to print currency since 1943, new personnel must have been handling things.  Fertig promptly answered, and emphasized that 100% rag bond paper was needed. time passed, and nothing further was heard about the paper.  The, need grew increasingly urgent.  On Jan. 21, Fertig radioed a reminder.

"Paper for printing currency, has not been received.  Our, payroll is now three months behind and it is difficult to explain that we have no funds when Leyte is land of plenty."

That, at least, got a reply:

"No paper for currency available in Leyte.  Some is on order from Brisbane."

At the time those messages were exchanged, the paper had already arrived.  It was part of the 45 tons of supplies unloaded at Pagadian Bay by the USS Nautilus on the night of Jan. 20.  It took some time for it to be transported overland to Dipolog.

F. D. Pacana, who had returned to Misamis Occidental and resumed his duties as Provincial Treasurer, was contacted and instructed to return to Zamboanga to resume his duties there as Executive Secretary of the M.E.C.B. He made the trip in a small banca,

Accompanied by the two printing technicians, arriving at Dipolog the first week in February.

            The press of the Rev. Soto was again obtained, and set up in the Public School building in the barrio of Estaka, municipality of Dipolog. Printing was resumed on Feb. 27, 1945.  A squad of soldiers were assigned to the “mint" for security.

            On March 8 the first elements of American liberation forces arrive in Mindanao landing at the Dipolog air strip on C-46 transport planes.  This consisted of two companies of the __ Infantry, 24th Division to strengthen the guerrilla garrison.  The same day, 16 Coursairs of Marine Air Group 12 began to use the airstrip as their operational base.  The Corsairs provided air cover for the amphibious assault force which was even then leaving L___d Mindoro and which landed unopposed at Zamboanga on March 10.

The American landing in Zamboanga stirred to action the Japanese forces in western Mindanao who had previously been content to remain in their garrison strongholds where they felt much safer from guerrilla attack.  On March 25, Japanese troops were observed in mountains near Dipolog, and it was expected that attack might be imminent. Two guerrilla officers visited Pacana suggesting that the "mint" ___ated to to a more secure ___d said they had a sail boat available if needed.  As they had on hand over a million pasos in newly printed currency for which he alone was responsible he lost no time in following their suggestion. As ___ the selection of a new ___ the “mint” entirely up to the his discretion.  Pacana elected to return to his home providence Misamis Occidental.

Printing was resumed April __ 1944 in a rented two-story, __ the barrio of Calamba, principality of Occidental.  The __ floor housed the printing operations while the second floor became the quarters of ___ and the press personnel.  Only three soldiers were available for guard duty.

            On April 22 orders were received from Col. Fertig to stop printing and await further instructions. Finally, on May 15, 1945, Fertig ordered that no further printing was to be undertaken, thus bringing to an end the printing of currency under the authority granted by President Quezon to the second Mindanao Emergency Currency Board, under the Chairmanship of Judge Florentino Saguin.-

            The following series designations were used for the printings under F.D. Pacana as Executive Secretary of the M.E.C.B.:

.20 (none)

15,000 notes

.50 (none) and "5"

71,800 notes

1.00 (none)

99,000 notes

1.00"V"and"V5"

57,700 notes

2.00 (none) and "5"

86,600 notes

5.00 (none) and "5"

99,000 notes

5.00 "T"and"TS"

88,600 notes

10.00 (none) and "5 "

99,000 notes

10.00 "S"and"S5"

99,000 notes

10.00"SA5"

4,200 notes

20.00 (none)

99,000 notes

20.00"R"and"RS"

99,000 notes

20.00"RA5"

70,300 notes

            Perhaps it will also be of interest to. the reader if we here give a brief resume of the various printings of the second M.E.C.B.

First Printing:  Matugas, Jiminez, Misaniis Occidental; April 5 to June 25, 1943, Series 1943; 2.721,520 pesos.

Second Printing: Uangan,  Kolumbugan, Lanao; Sept. 6 to Nov. 1, 1943; Series 1943;  2,689,400 pesos.

Third Printing: EsMalLa, .Agusan. Dec. 13 1943 to Jan. .22, 1944, Series 1943;  4,970,630 pesos.

Fourth Printing: Loreto, Agusan: March 18 to July 5, and Nov. 4 to 15, 1944, Series 1944; 4,058,075pesos,

Fifth Printing: Tookan, Ting. kugas, Zamboanga, Sept. 14 to Oct. 6, 1944; Estaka, Dipolog, Zamboanga, Feb. 27 to March 25, 1945; Calamba. Plaridel, Misaniis Occidental; April 1 to April 22. 1945; all Series 1944: 8,453,800 pesos.

Sixth Printing: Loreto, Agusan, Jan. 2 to Jan. 15, 1945, Series 1945;  794,125 pesos.

            All of the notes of the 1st printing, as well as the 5, 10, 20, 60 centavo and 1 peso notes of the 2nd printing were on brown wrapping paper, of various texture and thickness.  In fact, some of the peso denominations of the 1st printing are on paper so thick it is in reality a thin cardboard. All other printings were on, white paper delivered by -submarine. While 100% rag content bond paper was requested. most of the paper received was of inferior quality, which Ubaido D. Laya referred to as "cheap book paper."  The M.E.C.B. had no choice in the matter, they had to use whatever they received.  Some of the paper was of a decent bond paper, but certainly not up to the standard requested.  It is -easily distinguished from its inferior counterpart.  Some of this bond paper was watermarked "Linen Bond" in lower case letters, or "Premier Bond" in -upper case letters.  Portions of these watermarks! may be found on some of the notes.

            Of the 23,613,415.00 pesos printed by the second Minidanao Emergency Currency Board, 2,283,171.35 was turned over to the civil government, and 21,330,243.65 to the guerrilla force.

            There were also several issues of "local" currency in Cotabato, Bukidnon and, Zamboanga, which were authorized by local guerrilla units.  As none of these, were issued with either the knowledge or approval of Col. Fertig, Commanding, 10th Military District, they are outside the scope of this article.

            There is, however, one additional type of currency whose use was authorized by Col. Fertig, and which is probably unique.

            In 1943 the puppet Philippine government, at the urging of the Japanese military authorities, undertook the redemption of emergency currency issued

prior to the surrender of the USAFFE.  Regulations required that all notes turned in for redemption be stamped with the date, name and title of the provincial or Municipal, Treasurer to whom they were presented with an additional stamping in Japanese characters.  For the most part the: stamping in Japanese characters was not adhered to.  But in the providence of Lanao, the stamping in Japanese characters was prominently done.

            On Oct 8, 1944, guerilla: forces of 108th Division under command of Lt. Col. Charles W. Hedges. occupied, Dansalan the capital Of Layisto province.  The Puppet Officials were captured along with the Treasury of the puppet government.  In the Treasury they found 62,000 pesos in pre surrender emergency currency; which had been redeemed, and which bore the stampings in Japanese characters.  Due to the critical shortage of currency at that time, Col Fertig authorized the Provincial Treasure of the Free Provincial Government to use this currency to meet necessary expenditures.

            When the emergency and guerrilla currencies were finally redeemed after the war – the guerrilla currencies at a fraction of their farce value – those notes which had been stamped and redeemed during the Japanese occupation by the puppet Philippine government were specifically excluded.

Thus we have a unique "guerrilla currency that was, (a) originally issued by authority of commonwealth President Manuel Quezon prior to the. surrender the USAFFE. (b). redeemed by the Puppet Philippine government under authority of M/Gen Yoshide Hayoshi, Director General of the Japanese Military Administration, and stamped with the seals of Japanese officials in Lanao, then issued by the Provincial insurer of the Free Lanao Provincial Government under authority of Col Wendell W. Fertig USA, Commanding the 10th Military District, and finally a repudiation by the Republic of the Philippines pursuant to Republic Act. No. 369.

            American liberation forces did not land anywhere in Mindanao until March 1945 when when western Mindanao (Zambanga) was liberated. It was another month before American forces began the liberation of the rest of Mindanao with unopposed landings at Malabang and Parang (Cotabato) in areas which the guerrillas had already secured.  On June 30, 1945 the U.S. Army considered Mindanao to be liberated and left the “mopping-up" to the guerrillas.  Just how much “mopping up” remained to be done is shown by the fact that the Guerrillas were in continuous combat until Japan surrendered on August 14, after which 34,150 Japanese surrendered.

During this period the guerrilla’s and the free civil governments were financed entirely by guerrilla currency. Yet during the same period the U.S. Army refused to recognize the validity of the Mindanao notes, which led to their steady depreciation.  On April 14, 1945 Col. Fertig radioed MacArthur:

"Continued expansion of areas under American troops in Mindanao increases the, seriousness of the question of why require us to use emergency currency while paying your areas with Victory notes.  This is causing increased devaluation of emergency notes."

This and subsequent protests were ignored.  In the mountains the guerrillas fought on receiving their partial pay in notes which were steadily depreciating in value. In the American areas former collaborates rushed to obtain employment with the American army for which they were paid in new Victory currency.  There are many seamy sides to the American liberation of the Philippines but perhaps the sorriest at all was the official repudiation of MacArthur's headquarters of the guerrilla currencies. -MacArthur's Allied Intelligence Bureau would later, boast of how little their intelligence operations in the Philippines had cost, but would carefully omit any reference as to how it was accomplished.

MacArthur's Intelligence Bureau did send Fertig by submarine, $39,200 in U.S. currency, 625,000 pesos in Philippine Treasury Certificates, and 1,650,000 pesos in counterfeit Japanese military (occupation) notes.  (The latter cost the U.S. Army only the small cost of, printing them.)

As an example of how the Filipinos were rewarded for their unswerving loyalty to -the States, I quote from a; letter written. by Mr. Ubaldo D. Laya to Col. Fertig, Oct. 11.

"I deposited P21,001.25 and received only P5,216.74. My deposit included the salary of my deceased son (3rd Lt Francisco Laya), my salary and the proceeds of my products sold to our Tenth MD, USFIP, consisting mostly of corn grain.  After waiting for four years, these notes are redeemed at 15%."

Col Fertig replied, "You and I must have been on the wrong side.  However, we can both sleep peacefully since we do know that we did the right thing."

The author is deeply indebted to Col Fertig, Sam Wilson, U. D. Laya and F. D. Pacana for an enormous amount of help in researching the Mindanao currencies.

Col Fertig never did got the star of a Brigadier General, which he certainly deserved.  After the war he returned to his home in Colorado where he became a Professor of Military Science and Tactics at the Colorado School of Mines.  After retirement he was appointed Director of the Alunini Association.

A decade after the war he returned to Mindanao on what he imagined would be a routine business trip.  Instead, it became a triumphal procession with flags and banners and welcoming committees in every city, town an barrio he visited or passed through.  From all over Mindanao the people gathered to welcome the "General" who had led them during the bitter years of the Japanese occupation.

Lt. Samuel J. Wilson (USNR) became Fertig's Chief of Staff with the guerrilla rank of L/Col.  In November 1944, he was flown to layte at the request- of President Osmena to serve as an advisor to the Commonwealth Government.  He entered Manila with the American liberation forces who liberated his wife and two sons from the Japanese Internment Camp at Santo Tomas.  After the war he resumed his business in the Philippines until ill health necessitated his retirement to California.

Some years ago the author corresponded with Capt. Wilson (USNR, Ret.) who courteously assisted my research even though his health was so poor that the letters were written by his wife. Because of this I hesitated to impose further upon him and lost touch.

The author also corresponded for several years with Ubaldo D. Laya and Filemino D. Pacana. Both served as Executive Secretary of the Mindanao Emergency Currency Board (in addition to other duties), a title that fails to convey the enormous responsibility imposed upon them. Their responsibilities entailed everything from such mundane tasks as hiring of press personnel arranging for kitchen staff and, food supplies, on up to being solely responsible for the printing, safeguarding, distribution and accounting for the Mindanao currency.  They were also the official representatives in Mindanao of the Common-, wealth Government, and were so regarded by Col Fertig.  To them both I am indebted for the enormous amount of help they gave me, often at considerable sacrifice.  Both lived into their eighties and were active, right up to the time they passed away, Mr. Laya in 1974, Mr. Pacana last year (1977).

 

 

Left & Right are front and back of the same bill, printed on available paper

 

Left & Right are front and back of the same bill, printed on available paper

1000 peso Japanese note printed in Australia; US 10 cent Victory note printed in Australia

Left & Right are front and back of the same bill, printed on available paper