The Minister of Panama to the Secretary of State.
Washington, D. C., December 31, 1903.
Dear Sir: The treaty of the 18th of November, 1903, provides for the payment to the Republic of Panama of the sum of $10,000,000 after the exchange of ratifications.
The Government of the Republic of Panama has always been anxious to insure a proper and useful employment of said sum. The delegates of the Government, Doctor Amador and Señor Don Frederico Boyd, have repeatedly told me that the principle which the Government intended to carry out for the employment of said sum was, not to invest any part of the capital in anything but consistent works which would permanently represent the counter value of the expenses incurred.
According to this principle the Government expressed the desire to take only $2,000,000 out of the $10,000,000 from the United States Treasury after exchange of ratifications, leaving the remaining $8,000,000 in the United States Treasury to be later on employed according to the necessities of the future and to the principle which I explained above.
At the same time the Government desired that this sum should be productive of interest in order to help to obtain the equilibrium of the budget.
According to the recommendations that were made to me by the Government of the Republic, I was requested to ask the Government [Page 282] of the United States if it would accept to pay an interest of 3 percent on the sum remaining in its hands out of the total sum of $10,000,000 provided for in the treaty of the 18th of November.
The interest to be paid on the $8,000,000 that the Government intends now to leave in the American Treasury would be $240,000.
The expression of this desire of my Government came by mail after the signature of the treaty, and I did not feel justified at that moment to call your attention to this point on account of the more important matters which required your attention, but now that the situation has progressed and that the Treasury Department may be considering the measures to be taken in the event of a prompt ratification of the treaty, I feel justified in submitting the case to your excellency, so that if the United States Government thinks the intentions of the Republic of Panama in harmony with its own, a special convention maybe drafted to settle this particular point.
I am, sir, with great respect, your very obedient servant,
His excellency John Hay,
Secretary of State, Washington, D. C.