Manila

One of the principles of war has always been to not allow your enemy to capture your money. This has been true from ancient times when armies would bury their treasury before battle, to modern times when special banknotes are issued to be demonetized if the territory is lost. One of the more interesting modern examples is the Philippine treasury and the Japanese invasion.

Ten hours after the attack on Pearl Harbor on December 8, 1941, the Japanese invasion of the Philippines began. Much like Pearl Harbor, American aircrafts were damaged in the initial Japanese attack, leaving General Douglas MacArthur to make the order to withdraw. With the withdrawal, an effort was made to try to ensure that the Japanese wouldn’t capture money and resources they could use in the war effort against the United States and its allies. Orders were given to record the serial numbers for hundreds of millions of dollars in paper currency and it was burned. In February, two million dollars in gold bullion and $360,000 in silver was shipped to San Francisco but the remaining 17,000,000 silver Philippines pesos, valued at $8,500,000 at the time, were unable to be transported in time.

The order was given for the coins to be loaded up and dumped into the deep crater south of Corregidor in Manila Bay before the Philippines was surrendered to the invading Japanese. The silver was loaded into wooden boxes each holding 6,000 pesos. The boxes were then loaded into ships at night and were dumped at the selected site. The task took 10 nights to accomplish but when it was finished, 425 tons of silver sat at the bottom of the sea.

By April, the Japanese had captured, and were in occupation of, the Philippines. Japanese intelligence had been aware of the silver dump and efforts were made to recover it and make it a gift to the emperor. The issue that the Japanese ran into was that the silver laid at a depth of 120 feet and deep-water recovery was difficult. The Japanese used Philippine prisoners of war to try and recover the treasure. But the POW’s were inexperienced and when diving before the occupation, only worked in depths of 30-40 feet. Two of the divers died of the bends and a third in a diving accident. The Philippine divers were able to recover 18 boxes of the silver showing it could be done. Not wanting the credit to go to the Japanese Imperial Navy divers, the Japanese army started recruiting American POWs to dive who were given greater privileges than their Philippine counterparts. The American divers were more skilled at deep water recovery but wanted to hinder the Japanese from capturing the treasury. This was greatly aided by the wooden boxes now rotted and silver spilling in the water and on the ship during recovery. This would allow the Americans to steal the recovered coins from the Japanese. The silver was used by the POWs to pay off Japanese guards, get goods and services and supply other American POWs with supplies. The amount of silver taken by the American’s was dramatic enough that the occupation currency that Japan had implemented in the Philippines had completely diminished value as silver Philippine pesos began to flow back into Manila, allowing merchants the choice in silver or valueless currency.

The recovery effort for the silver was ended by the Japanese when a typhoon hit Manila Bay. By then the economy had been destroyed in Manila because of the influx of silver. When the Philippines were retaken by the Americans, efforts to recover the silver were made. In 1947 two American’s got contracts with the Philippines government to recover the silver. About $250,000 in silver was recovered from this effort. Other efforts had been made to recover the treasure but its estimated about four million dollars worth is still down at the bottom of the sea.