Office of the Historian

Mr. Bunau-Varilla to Mr. Hay.

Legation of the Republic of Panama,
Washington, March 3, 1904.

Sir: In our conference this morning you notified me that the moment had come to deliver to the Government of Panama, according to Article XIV of the treaty of the 18th of November last, the $10,000,000 fixed by said article as a part of the price of compensation, and that it was the desire of the Government of the United States to settle this question without delay.

You further asked me if anything had taken place that would modify the notification I made to the Department of State by letter of December 10, 1903, to the effect that Messrs. J. P. Morgan & Co. had been apointed financial agents of the Republic of Panama for one year, with full and exclusive power to collect for the account of the Republic any sum the Government of the United States may have to pay to Panama for any cause whatsoever. You added that if nothing had modified this power the Secretary of the Treasury was going immediately to transmit to you a check of $10,000,000, payable to Messrs. J. P. Morgan & Co. for the account of the Republic of Panama.

I beg to confirm what I had the honor to answer to you:

  • First. That the Government of the Republic was undoubtedly ready to comply with Article XIV of the treaty, as well as with any other.
  • Second. That the appointment of the firm of J. P. Morgan & Co. as financial agents, with the power above mentioned, had been explicitly ratified by the junta, whose acts have been in their turn ratified by the constitutional convention; that such appointment with such power was definitive, and that therefore the check of $10,000,000 could be prepared, payable to J. P. Morgan & Co., for the account of the Republic of Panama. I added, though, that according to my letter of December 10, 1903, to the Department of State, any withdrawal of funds by the financial agents from the United States Treasury had to be preceded by a specific order of the Government of Panama, and that I was going to cable to Panama to this effect. In the meanwhile, I respectfully request your excellency to keep the check of $10,000,000 pending the transmission of said order.

I am, etc.,

P. Bunau-Varilla.