File No. 819.77/174.
Minister Price to the Secretary of State.
Panama, February 9, 1914.
Your February 7. After a consultation with Colonel Goethals the railway under the Hebard contract is not objectionable from a military standpoint. Contract provides for issue of bonds of the Republic of Panama whose value will be arranged by mutual agreement. While it does not pledge the annuity of the two hundred and fifty thousand dollars or income from six million dollars permanently invested undoubtedly an effort will be made to accomplish this. Hebard leaves for United States to-morrow to take up the matter with the Department of State having the foregoing in view. We agree that the Department of State should require the bonds to be floated in the United States and should continue in its stand relative to the annuity and interest heretofore mentioned. Contract forwarded by last mail is complete and final except financiering. Railway is a government project and Panama assumes control on completion by contractors.