Mr. Adee to Mr. de Obaldía.

No. 10.]

Sir: Referring to the Department’s note of the 18th, and in further reply to your two notes of the 11th and one of the 19th instant, all [Page 611] relating to the differences which have arisen between the governments of the United States and Panama, growing out of the establishment by the United States, in virtue of the stipulations of the treaty between the two republics, of cerain ports and custom-houses in the canal zone, I have the honor to say that it has been deemed expedient by the President that the discussion of the questions raised, which has begun at Panama, should continue there, where the means of ascertaining the pertinent facts are more within the reach of the American legation and the Government of Panama.

This Government is also disposed to believe that this disposition of the question would be preferred by your Government, and I have, therefore, the honor to suggest that you may advise your foreign office in the sense above stated.

The Department will at once instruct Mr. Barrett in the sense above suggested.

Accept, etc.,

Alvey A. Adee,
Acting Secretary.