File No. 312/71–73.

The Acting Secretary of State to Minister Squiers.

No. 78.]

Sir: I inclose copy of a letter from the President transmitting one from the chairman and chief engineer of the Isthmian Canal Commission stating that the Panaman Government construes Article II of the treaty of November 18, 1903, in such a way as to deprive the United States of jurisdiction over the waters of Manzanillo Bay and over the waters affording entrance to the canal.

I also inclose a copy of my reply to the President.1

You will advise the Government of Panama that this Government holds that Panama has no jurisdiction whatever, of any kind, over the waters through which ships must pass in entering the Panama Canal.

[Page 680]

The department on August 24 last advised the Panaman minister at this capital, touching the right of the Central & South American Cable Co., to lay a cable through Manzanillo Bay beyond mean low-water mark, that “the cable has been laid in waters which by the terms of Article II of the convention of November 18, 1903, are comprised in the grant to the United States, for its use, occupation, and control.”

A copy of that note is also inclosed.1

I am, etc.,

Robert Bacon.
  1. Not printed.
  2. Supra.