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The Philippine Independence Act, also known as the Tydings-McDuffie Act of 1934, guaranteed the Philippines self-governance and independence from the United States following a 10-year transition period. During American colonization, Filipinos entered the United States primarily as pensionados, who were government scholars attending schools in the United States or as low-paid migrant workers for Alaskan fisheries and farms and plantations in California, Hawai'i, and other states. Under the Philippine Independence Act, Filipinos could be newly defined as aliens or immigrants. Under the act's provisions, the year following the passage of the Philippine Independence Act marked the institution of the Philippine Commonwealth government and a new constitution to be effective during the transition to Philippine sovereignty. The constitution formed the basis of the Philippines’ constitution after independence. However, the nature of the interim government— and particularly of its immigration and foreign policy, currency, and overseas trade—remained at the discretion of the United States during the this period, the end of which was actually delayed until 1946 because of complications relating to Philippine campaigns during World War II.

Drafted by Representative John McDuffie and Senator Millard Tydings, the Philippine Independence Act is partly a revision of the Hare-Hawes-Cutting Independence Bill, which, despite being approved by Congress in the face of President Herbert Hoover's veto, was subsequently defeated in the Philippine legislature because of what were deemed to be overly strict clauses relating to trade and immigration, as well as the presence of stipulations—particularly the establishment of a high commissioner and permanent American military bases in the Philippines—that would have resulted in merely a semblance of independence. Manuel L. Quezon, who would eventually become the second president of the Philippines, traveled to Washington, D.C., in order to ensure new terms under the Tydings-McDuffie Act, obtaining more promising conditions relating to American military presence and certain aspects of foreign policy.

Other terms were not as easily negotiated, nor could the terms of the Philippine Independence Act be deemed wholly egalitarian. For example, the annual quota of 50 Filipino immigrants to America not only represented a drastic decrease in Filipino movement to and from America but also contrasted with American immigrants, whose entry and residence in the Philippines were unrestricted. This disparity mirrored the proviso that American goods enter the Philippines without tariffs or other restrictions, while Filipino goods— most notably sugar, coconut oil, and cordage— were taxed beginning in the second half of the transition period.

The Philippine Independence Act allowed continued American sovereignty in the Philippines on multiple levels. For example, the U.S. government had to approve all loans to the Philippines from other nations, and the U.S. Supreme Court could review all Filipino court rulings. Despite these and other restrictions, the Philippine legislature believed the bill represented the most favorable agreement that could be attained at the time, with the understanding from President Franklin D. Roosevelt that the Philippine government could later renegotiate the conditions.

While allowing for Filipinos to be considered immigrants, the act's immigration quota limited travel to and from the United States to the Philippines and would later open the way for Filipinos to be included in the restriction placed against all Asian immigration (with the exception of a 1946 clause allowing sugar plantation laborers to immigrate to Hawai'i if needed). These limitations created problems for those Filipinos in the United States, who had to either choose to remain in America, indefinitely severed from their family members in the Philippines, or risk returning to the Philippines without hope of employment or return to the United States. One year after the Philippine Independence Act was passed, Congress passed the Filipino Repatriation Act of 1935, allowing free passage for Filipinos back to the Philippines. Only around 2,000 Filipinos took advantage of the offer.

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