Mr. de Obaldía to Mr. Hay.

No. 7.]

Excellency: I have the honor to transmit to you the statement with regard to the difficulties which have arisen in Panama owing to the interpretation given to some obscure points in the Bunau-Varilla-Hay treaty. In this statement I have endeavored to clear up these points, which, after being elucidated, seem to me to show that the conduct observed by the governor of the canal zone is not in conformity with the letter and spirit of the treaty.

When your excellency shall have studied this statement in detail, you will find that the Republic of Panama is clearly and unmistakably right in demanding of this nation that its rights be recognized, which, if denied it, would bring upon it ruin and dishonor as an autonomous entity.

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I do not doubt that your excellency, being guided by justice and equity, will determine this incident, as I hope to have demonstrated it in the acompanying statement.

My Government trusts that your excellency’s decision will be in accord with the conduct with which you have always observed and which reflects such great credit on your industrious public life.

With feelings of the highest regard, etc.,

J. D. de Obaldía.