Foreign Relations of the United States Diplomatic Papers, 1935, The American Republics, Volume IV

711.1928/383a

The Assistant Secretary of State (Welles) to the Assistant Solicitor General (MacLean)

Washington, May 22, 1935.

My Dear Mr. MacLean: In further discussion with the Panamanian Commissioners concerning the matter of the Canal annuity, they have, under instructions from their Government, raised objection to the draft of Article VIII of the proposed General Treaty on the ground that it makes reference in blank to a projected law to be enacted in the future by the legislature of Panama.

After further consideration of this matter we have agreed with the Panamanian Commissioners to deal with it as follows: to include in the notes on coinage to be exchanged between the two Governments a reference to the fact that the existing Monetary Agreement between the two Governments of June 20, 1904, shall be modified to make provision for the reduction of the gold balboa so that the legal standard units of value of Panama and of the United States shall be equal; and that, accordingly, for the purpose of Article VIII of the General Treaty, the balboa shall be regarded as defined to consist of 987½ milligrams of gold of 0.900 fineness. We further agreed with the Commissioners of Panama on certain minor modifications in the draft of Article VIII.

I am enclosing herewith for your information copies of the draft note on coinage and of the draft of Article VIII of the General Treaty.⁴²

The Treasury Department has approved these drafts, and I should be glad to have your views thereon.⁴³

Sincerely yours,

Sumner Welles

42. Not printed. The settlement of the Canal annuity question was taken up as part of the negotiations for the revision of the treaty of November 18, 1903 (see pp. 889 ff.). The article concerning this matter was changed to article VII in the General Treaty of Friendship and Cooperation signed at Washington on March 2, 1936; Treaty Series No. 945, pp. 12–13.
43. No reply found in Department files.