File No. 819.77/154.

The American Minister to the Secretary of State.

No. 314.]

Sir: Referring to my despatch No. 310 of the 30th ultimo, and to my telegram of February 7, I have the honor to enclose a copy and translation of a note from Señor Lefevre, Minister for Foreign Affairs, dated January 31, 1913. This note is in reply to mine of the 21st ultimo, referred to in my despatch No. 310.

In a conversation last evening with Señor Lefevre, he mentioned this note, casually intimating the opinion that the only ground upon which the United States could properly object to this bill was in case it violated the provisions of Article V of the Canal Treaty. In reply I expressed my surprise to Señor Lefevre and briefly mentioned other possible and proper grounds of objection, referring him to the Department’s instruction No. 89 of September 20, 1911,1 of which a [Page 1098] copy had formerly been furnished to his office under instructions from the Department.

I also enclose, with a translation, a clipping from the “Gaceta Oficial” of the 30th ultimo, which appeared several days later, giving the text of President Porras message to the Assembly which accompanied, evidently, the former of these railway bills. The message states that the principal reason for the failure of Law 2 of 1911, authorizing the Executive to contract for the construction of the Panama-David railway, was the limitation to ten million dollars gold of the loan which the Executive was authorized to contract for this purpose, this sum being too small.

I have [etc.]

H. Percival Dodge.
[Inclosure 1—Translation.]

The Minister for Foreign Affairs to the American Minister.

Mr. Minister: In reply to your excellency’s esteemed communication No. 295 of the 21st instant, I have the honor to inform your excellency that “the project of law relative to the construction of railways and the authorization of the Executive Power to contract a loan,” was submitted to the consideration of the honorable National Assembly on the 14th of the present month. Nevertheless, as a mark of courtesy to the Government of the United States, the project in question will not be debated on second reading before the second week of February.

I avail of this opportunity to inform your excellency that the branches of the railway to David, which are mentioned in the project in question, will be constructed in the Province of Los Santos and on the Pacific slope of the Province of Chiriqui; and none of them will affect in any way the rights acquired by the United States under the Canal Treaty, signed between the Republic of Panama and the United States.

I avail [etc.]

E. T. Lefevre.
[Inclosure 2—Translation.]

Message of the President of Panama to the Congress.

Honorable Deputies: Law 2 of 1911, of January 2, relative to the construction of a railway from Panama to David, with branches to the Provinces of Los Santos and the town of Anton, remains ineffective, as you know, because the call for public bids for these works which the Government was obliged to make within two months after its approval according to the provisions of Art. 1 of this law gave no results.

And as the construction of this railway is of incalculable benefit for the country and especially for the Provinces which the main line and branches will cross, I consider that the proposal of putting into effect this important project should be insisted upon, endeavoring to suppress in the new law to be passed the obstacles and inconveniences which impeded the effective accomplishment of the former law.

On this account I request the Honorable Assembly, if it thinks proper, to confer upon the Executive as wide powers as possible to construct the railway to David, Los Santos and Anton either through the Government itself or by contract, all together or in sections, endeavoring always to attain the quickest completion of the whole work relatively to the resources which the country can dispose of.

It is reasonable to suppose that one of the most serious obstacles, if not the principal one, which prevented the execution of Law 2 of 1911 was the one relative to the authority given to the Executive for contracting a loan up to [Page 1099] the sum of ten million balboas for the cost of works so difficult and valuable as are those of the railway in question. Careful and prior studies show that an undertaking of such size and technical difficulty cannot be completed with only ten million balboas; and on this account it is indispensable to enlarge the power of contracting the loan up to the amount which may be indispensable for the conclusion of the railway, under the same securities and terms as are contained in the law concerning this matter.

The Executive will begin this colossal work, so advantageous for the Republic of Panama, as soon as it is fully authorized to contract the loan and to secure the construction of these railways either altogether or in sections which will be connected together as soon as the resources of the country allow.

In order to secure these results I place before you Honorable Deputies the accompanying project for a law.

The President of the Republic,
Belisario Porras.

The Secretary for Public Works,
R. F. Acevedo.