File No. 819.77/137.

The American Minister to the Secretary of State.

No. 281.]

Sir: Referring to my telegram of January 8, I have the honor to enclose herewith the text of this contract as furnished to me by Señor Acevedo, and a translation.1

I became aware by chance a few days ago that some railway contract of this nature had just been signed but notwithstanding frequent requests I was unable to secure a copy of it until late last evening. Upon examining this contract it appeared to me that its nature and provisions made it one which the Department would desire to have an opportunity of considering before it became law notwithstanding that the nominal concessionaire is an American; for, especially, the concessionaire is to construct a railway to start from a point a very short distance from the Atlantic entrance of the Canal; the length of line which he is allowed to build is entirely left to his discretion, providing he builds at least 50 kilometers; he is also allowed to construct as many branches as he likes at any time and running in any direction; he is to establish wharves at various places near the Canal and to improve the mouth of the Chagres River so that it can be entered by large ships, etc. Certain provisions of the contract appear favorably, as the system of land grants in sections, alternately for the Government and the concessionaire; the fact that the concessionaire must, under reasonable conditions, allow connections with [Page 1083] other railways (as the Pan-American) and allows the Panaman Government to use the line whenever it considers this desirable; and the provision that the contract requires the Government’s consent to be assigned and cannot in any case be assigned to a foreign Government.

I accordingly called this morning upon President Porras and after stating my opinion as above, I requested him to delay further action upon this contract until I had been able to consult my Government, I added that although the Department’s instruction No. 89 of September 20, 1911,1 which I had especially brought to his attention in August last, was particularly written in view of a railway contract with foreigners, it seemed to me to apply also to the present case. President Porras replied that, as he had read this instruction, it appeared to apply only to railway contracts made with foreigners but that nevertheless if I desired it, he would be happy immediately to stop further proceedings until I had had an opportunity of consulting my Government as I desired. He wished me however to address my request in writing to Señor Lefevre, Minister for Foreign Affairs, in order that he might justify his action. This I agreed to do and I enclose a copy of my note2 to Señor Lefevre. President Porras then said that I had made this request at the right moment, as he had been about to send the contract to the Assembly for its approval.

I have [etc.]

H. Percival Dodge.
  1. Not printed.
  2. For. Rel. 1912, p. 1171 et seq.
  3. Not printed.