File No. 819.77/135.

The American Minister to the Secretary of State.


I have just obtained copy of contract signed a few days ago by the Panaman Government with Basil Barnes [Burns] Duncan, an American residing here, which now requires approval of Assembly to become law, providing for construction within five years of a railway [Page 1082] starting from west side of mouth of Chagres River and running more or less in southwest direction at least fifty kilometers. Concessionaire may construct at any time such branches of such length and direction as he may consider necessary to the enterprise, previously requesting consent of Executive. He may establish wharves at Chagres and other places which he may consider suitable. Authorization to be granted in accordance with Law 82 of 1904 and he shall execute at his expense necessary works at Chagres or another port to allow entry of larger ships. Government grants all necessary Government land including strip of fifty meters for main line and three hundred hectares per kilometer of main line in alternate sections; also right to operate necessary telegraph lines. Concessionaire must deposit $10,000 guaranty, allow connections to other railways and allow Government to use railway whenever it considers it to be desirable. He surrenders right to make diplomatic claim and agrees to pay percentage of receipts after ten years. Concession for seventy-five years, Government reserving the right to purchase main line after thirty years. Contract may not be assigned at all without the consent of Government and may not be assigned to foreign Government.

Have obtained from Panaman Government postponement of further action upon this contract pending an opportunity for consulting my Government.