File No. 819.77/153.

The Secretary of State to the American Minister.


The following cable has been received by the Secretary of War from Colonel Goethals:

Referring to correspondence, Duncan’s concession for railroad from point near Chagres River: Report forwarded by American Minister. Under proposed [Page 1091] contract a port can be created near mouth of Chagres River, and if sufficient to permit entrance of large vessels, change in plan of defence of Canal will be necessary. This feature and the branch roads that are stipulated are objectionable from military standpoint. The contract also interfaces with rights of the panama Railroad.


From this you will perceive that the Duncan contract as it stands is considered objectionable from strategic and other standpoints, and you will therefore direct an appropriate communication to the Minister for Foreign Affairs, referring to the Legation’s action on Department’s instruction to your Legation of September 20, 1911,1 and say that under the circumstances this Government considers that the contract should not be permitted to become effective by the Panaman Government.

You will at the same time say that this Government, possessing every desire to assist the Government of Panama in the promotion of the growth, development, and welfare of that Republic, would be glad to approve this contract if it were possible to have it so amended as to meet the views its duty imposes upon this Government and the objections which have been made thereto by your commission and by Colonel George W. Goethals, or to approve any other railroad contract which will not be detrimental to the construction, maintenance, and operation of the canal, matters in which the two Governments should take an equal interest, and which promises to bring about the proper development of the resources of Panama.