Miguel Cuaderno, an Oxford-man, ex PNB manager and President of the New Bank of Commerce, has an idea on how to solve our financial ills. In order to prevent the currency from crashing when the Americans start bombing us, the government should replace it with new Filipino notes issued by the Central Bank. The Japanese have agreed to redeem military currency at one Yen per Peso credited in Tokyo, and curtail spending. To meet their needs here, the Japanese would borrow Pesos from the Central Bank and credit us with Yen in Tokyo. The idea could restore some confidence in the currency, but there's no way to limit Japanese borrowing. I don't think the Japanese will go for it.

Cuaderno said that in Tokyo, Laurel begged off Japanese demands that the Filipinos declare war by insisting that we wouldn't stand for it. He asked for time that the Filipinos might get to know the Japanese better. They finally agreed. Well, we know them better now, but it doesn't change anything.

Yesterday, 296 Americans interned in Davao for two years arrived in Santo Tomas. Some 30 priests, three nuns and several scholastics were among them. "I've had my taste of Purgatory already," said one.

News: The Russians are less than 10 miles from the Polish border; the British are bombing suspected rocket sites in France; and the Americans landed virtually unopposed near Madang.