Mr. Barrett to Mr. Hay.

No. 31.]

Sir: I have much pleasure in reporting that the Government of Panama has finally accepted the suggestion submitted by me to the minister for foreign affairs on August 9 (see my No. 14 of August 9) for the purposes of settling the differences which have arisen over the port question, that negotiations should be begun for the protection of the revenues of Panama, regulation of customs duties, and perfection of reciprocal trade relations between Panama and the zone, as outlined in sections 8 and 9 of the President’s order of June 24, 1904. * * *

I have, etc.,

John Barrett.
[Inclosure 1.]

Mr. Barrett to Mr. Arias.

Mr. Minister: In your excellency’s esteemed note of the 23d instant replying to my letter of the 16th, in which I had the honor to cite a letter of Minister Bunau-Varilla to Mr. Hay as practically clearing up the disputed question of the ports and to suggest that we should proceed to negotiate an agreement covering the revenues, customs laws, and trade relations of Panama and the canal zone, as outlined in sections 8 and 9 of the President’s order of June 24, you stated that you deemed it best to await discussion of the main question in Washington before continuing further the discussion in Panama.

Acting in accordance with this intimation, in due deference to the desire of your excellency, and having in mind the import of our informal conference, I cabled my Government the position taken by the Panama Government.

I now have the honor to communicate to your excellency that I received a telegram from my Government to the effect that it had informed the minister of Panama in Washington that it was the wish of the President of the United States that the discussion of the question should take place in Panama. This telegram further states that the minister of Panama was requested also to inform the Panama Government that I had been instructed accordingly.

While my Government fully respects the suggestion made by your excellency [Page 613] about consideration of the question in Washington, and while it has, in a spirit of perfect fairness, given careful heed to the representations of Panama’s diplomatic representative in Washington, it frankly believes that the best place for discussion is on the ground where the actual interests of both Panama and the zone are constantly before our eyes and where all the commission, except one, are now present and ready to take whatever action is best, without the long delay and consequent depletion of Panama’s revenues incident to the discussion in Washington and the approaching departure of the commission, which must pass upon any laws for the zone.

I await your excellency’s pleasure, as suggested in my informal note of this morning, in designating an hour when we can meet in interview for the purpose of exchanging preliminary views along lines intimated in my communication.

Accept, etc.,

John Barrett.
[Inclosure 2.]

Mr. Arias to Mr. Barrett.

Mr. Minister: I have received your excellency’s esteemed note of the 31st of August, in which you inform me that on the 30th of that month you received a telegram from your Government in which the wish was expressed that the discussion which has arisen regarding the application of some of the stipulations of the Isthmian Ship Canal treaty may be settled in this capital, as being the most suitable place on account of the facilities here for arriving at a prompt solution. My Government readily accepts the desire expressed by your excellency, and prepares for the discussion.

I hope that your excellency will fix a convenient time and place to talk over the matter and to exchange ideas respecting the subject referred to in your excellency’s communication relating to customs duties and the regulation of the same, and commercial relations between the canal zone and Panama.

I should prefer that the exchange of these ideas, because of the importance of the subject, be carried on in writing, and so I beg to suggest to your excellency with the request that you favor me with your views.


Tomas Arias.