File No. 419.11D29/90.

The Secretary of State to Minister Price.


Your April 26, and despatch 484. In Department’s opinion next to last paragraph Foreign Office note April 24 indicates Panama will expect arbitrator to entertain evidence and pass upon questions thus raised in considering indemnities to be paid by Panama. The question to be submitted to arbitrator if appointed should merely be amount of damages sustained by injured parties and it should clearly appear in agreement that Panama undertakes to pay indemnities without regard to circumstances affecting riot. If Panama now ready to pay indemnities, however, it appears appropriate to Department that the two Governments should first discuss amount of award, having in view an agreement, before the necessity of appointing arbitrator is considered. Report earliest possible moment.