It is island of Luzon in the Philippines, January 1942. Another Philippine island, Corregidor, trembles under Japanese bombs as American and Filipino defenders wait for help that will not come.

The U.S. War Department wants Philippines President Manuel Quezon evacuated from Corregidor to avoid capture, but Gen. Douglas MacArthur, the commanding general of the U.S. Army Forces in the Far East, says it's too hazardous to attempt.

A month later, Quezon hands, the general $500,000 from the Philippine treasury. MacArthur accepting the money in violation of Army regulations, changes his mind. Quezon and his family leave Corregidor by U.S. submarine.

The story is fact, and it has been known and debated among MacArthur historians for the past year, although it has not been widely known outside academic circles.

The exact meaning of the MacArthur-Quezon transaction is uncertain. However, its discovery in war records poses new questions about one of America's war heroes.

The issues were raised in an account by historian Carol M. Petillo in last February's edition of the Pacific Historical Review, based on records she uncovered during research for her doctoral dissertation.

The Pacific Historical Review, published by the University of California Press, is the official publication of the Pacific Coast Branch of the American Historical Association.

[prof. Norris Hundley, editior of the historical review, says that before articles are published, they are sent to other scholars in the field who check for accuracy.]

The documents Petillo found in the National Archives showed that on Jan. 3, 1942, Quezon directed by executive order that $640,000 from the Philippine treasury be conveyed to the personal bank accounts of MacArthur and three members of his staff "in recognition of outstanding service to the Commonwealth of the Philippines."

Quezon said that the "recompense and reward" was for "distinguished service" from Nov. 15, 1935, to Dec. 30, 1941.

The transactions, made by radio grams from Corregidor to the Chase National Bank of the City of New York, placed $500,000 in MacArthur's account according to the records. Major Gen. Richard K. Sutherland, MacArthur's chief of staff, received $75,000; Brig. Gen. Richard J. Marshall Jr., the deputy chief of staff, received $45,000 and Lt. Col. Sidney L. Huff, MacArthur's personal aide, recieved $20,000.

Petillo wrote that records indicate that President Roosevelt, Secretary of War Henry Stimson and Secretary of the interior Harold Ickes knew about the transaction but apparently did not interfere with it.

Now on the faculty of the history department at Boston College, Petillo said it would be "simplistic" to interpret the money as a "bribe" by Quezon to get MacArthur to evacuate him, but that MacArthur's acceptance of the money appears "morally questionable."

Several historians familiar with the war period and MacArthur, who died in 1964 and whose 100th birthday anniversary was Saturday, said in interviews that they are convinced that Petillo's research is accurate. But some cautioned that her conclusions about the Quezon gift are nebulous and cannot be substantiated.

William Manchester, author of the popular biography of MacArthur, "American Caesar" said he was "skeptical" of her findings, although he admitted he had not read her account of the story.

During 52 years of often brilliant, sometimes controversial military service, MacArthur became a national hero. His firing by President Truman in 1952 for disobeying orders in the Korean War brought a storm of protest in America.

Evidence of the Quezon gift did not surface until Petillo's research in 1977-78. She said she picked up "hints" of the transaction, but did not understand their meaning until she found Quezon's "Executive Order No.1" among Sutherland's in the National Archives.

"It was not unusual, given the Spanish tradition in the Philippines of paying for whatever you got," she said. "So it was not unusual, from Quezon's perspective, and he would probably have wanted to bring pressure to bear wherever possible on Corregidor."

According to Petillo's research, orders for the transfers of funds were not transmitted to the War Department until Feb. 15, 1942. The War Department assured the Chase bank that the transfers should be made, and Roosevelt, Stimson and Ickes were informed, according to Petillo. Word was sent to Corregidor about Feb. 19 that the transfers had been completed, she said.

"It is significant that after several statements arguing that Quezon could not safely be evacuated, MacArthur, one day after the transfer of funds was ordered, reversed his position and decided that president's evacuation indeed could be achieved," Petillo wrote. "On Feb. 20, just after he received verification of the transfer, this decision was carried out and Quezon headed south toward the unoccupied islands."

Records show that on Feb. 19, Quezon apparently gave MacArthur 1,280,000 Phlippine pesos to cover the payments in the case the orders radioed to the bank were not carried out.

On Feb. 25, after the transfers were completed, MacArthur returned the pesos to Lt. Col. Manuel Roxas, who was in charge of the Philippine treasury.

Roxas remained in the Philippines and during the Japanese occupation collaborated with the enemy. When the Philippines were recaptured, MacArthur arrested several other collaborators, but allowed Roxas to remain free, Petillo notes.

"Perhaps Roxas' signature on the sheet attached to Executive Orders No. 1 was a reminder of the recipients of the $64,000 of the confidential exchange which Roxas had witnessed on Corregidor," Petillo wrote.

MacArthur went to the Philippines in 1935 as military adviser, remaining on active duty with the Army. But in 1937, he retired from the Army, rather than be reassigned in the United States. With World War II approaching, MacArthur and his staff were transferred back into the Army in July 1941.

MacArthur and the three officers thus, were again subject to regular Army rules that apparently would have prohibited them from accepting the gift, according to Petillo.

Dr. Forrest Pogue, biographer of Gen. George C. Marshall, said he doesn't question that the transaction occured.

"There has always been some talk that MacArthur got a very good thing out of that," he said. "She [Petillo] is the first to really get into it. I don't think there was anything illegal about it, nothing corrupt. And by modern standards of pay it was not all that much."