File No. 819.77/156.

The Secretary of State to the American Minister.


Your telegram February 22. As outlined in Department’s May 31, 1912,1 this Government would be unwilling to consent to the [Page 1103] pledging of future installments of the annuity payable under Article 14 of the Treaty of 1903. From the inception of negotiations first with Colombia and later with Panama it has always plainly appeared to be the intention of the Governments concerned to create by means of the annuity a fund which would assure a permanent revenue for the maintenance of a stable Government on the Isthmus. The permanent investment in New York City of the six million dollars was also provided for a like purpose.

It is obviously the desire of the Government of the United States to see Panama prosper and develop, and it will omit no proper effort to that end, but just as obviously this Government feels bound to caution the Government of Panama against any unwise or ill-advised use of these funds, and this Government is of opinion that it would be imprudent to discount these future revenues of the Republic.