File No. 819.77/251
The Minister of Panama to the Secretary of State
Washington, July 28, 1916.
Excellency: Referring to several conferences had by me with Mr. J. Butler Wright, Chief of the Latin-American Division of the Department of State, at which we discussed the Chiriqui Railway built by the Government of Panama and the necessity of and advantage in extending that line to the point where a colony of American citizens under the direction of Mr. E. W. Staton started a settlement, I have the honor to inform your excellency that my Government, considering the interest shown by your excellency’s Government through [Page 1180] Mr. Wright in the extension of the railway and convinced of the unquestionable utility of such an extension, has decided to undertake the work, provided it may in this count upon the effective cooperation of the Government of the United States.
The Chiriqui Railway undertaking, now carried to a successful end, could only be achieved with the moral and financial support extended to the Republic of Panama by your excellency’s Government, and my Government hopes that in this matter of extending the line and bearing in mind the results already achieved, that support will be even more decided and efficacious than in the case of the building of the main road.
According to the arrangements made for the construction of the railway which are on file in the Department of State, the Republic of Panama contracted a loan of three million dollars redeemable in thirty years bearing five per cent interest per annum and secured, with the assent of the Government of the United States by the $250,000 annuity belonging to the Republic under the Canal Treaty. The bonds were to be issued in instalments to pay for the work as it was progressing and there were accordingly three issues of seven hundred and fifty thousand dollars each, aggregating $2,250,000. For the service of the interests and amortization of the loan, the Government of Panama assigned to the Farmers’ Loan and Trust Company of New York a part of the Canal annuity amounting to $190,258.61 and your excellency’s Government agreed to the assignment and punctually paid the said sum to the assignees.
As the constructing engineer of the railway estimates the extension of the road by 18 miles will cost between $400,000 and $450,000, my Government wishes to know whether your excellency’s Government is disposed to agree to an assignment of so much of the annuity as may be needed to meet the interests and amortization of the new issue for the extension of the railway.
With sentiments of the highest consideration, I am [etc.]