Mr. Loomis to Mr. Russell.
Washington, May 19, 1904.
(Mr. Loomis instructs Mr. Russell to inform the minister of foreign affairs of Panama that the United States Government declines to modify the arrangement made with Panama concerning the payment of the $10,000,000 due under the canal treaty.
The direction to pay it to Panama’s fiscal agent here was accepted by this Government and acted upon after the exhibition by Morgan & Co. of its written authority from the Government of Panama to receive the entire amount due from the United States.
The suggestion of such an unusual course as to hand over so vast a sum to individual commissioners, who may present themselves for that purpose, can not be accepted by the Government as a substitute for the conventional method agreed upon.
The suggestion by the Panama Government that it has appointed a commission to receive the money because of this Government’s statement that it would, as a favor, defer paying over the nine millions to Panama’s fiscal agent here until the arrival of its minister can not be acquiesced in by this Government as deducible from the facts.
The suggestion to wait until the arrival of Panama’s minister was accompanied by representations that a plan of safe investment was being considered that might obviate the necessity of handling the money twice, hence this Government’s expressed willingness to retain possession of the balance until the minister’s arrival.
Upon the whole, it is deemed best by this Government to adhere to the original arrangement, and it has accordingly paid over the nine millions to J. P. Morgan & Co. for account of the Republic of Panama, being balance in full of amount due under the treaty.
The representation to this Government by Panama, made prior to the ratification of the treaty, that at least eight millions of this fund should be safely invested to secure the stability of Panama’s finances, this Government will expect to be carried out in good faith.)