File No. 819.77/277

Minister Price to the Secretary of State

No. 1290

Sir: I have the honor to enclose a copy of the translation of the concession2 awarded to Mr. Basil Burns Duncan for the construction [Page 1188] of a railway on the Atlantic side of Panama extending from the month of the Chagres River in the direction of Chiriqui Lagoon. This became a law on last Monday.

The concession is, with the exception of a few changes, the same as was evidenced by what was known as Contract No. 70, of December 30, 1912, and which was an enclosure with despatch No. 281 of this Legation of the date of January 8, 1913.5

Article 2 of said concession, which was quoted in my cablegram of yesterday 5 p.m., relating to the construction of branch lines will be found included in said original contract.

The Department’s instruction No. 346 of February 14 was not received by this Legation until the 28th day of February, which was after the law mentioned had passed the National Assembly in all three debates. I made inquiry again and was again assured that the law contained no authorization for the construction of the branch line mentioned, to which the Department was not favorable.

The Article 2, referred to above, would seem broad enough to authorize the building of a branch line to Penonomé or constructing them anywhere else. Mr. Duncan, with whom I have conferred again since the receipt of the Department’s cable of March 8, 4 p.m., declares to me that said article was inserted in the original contract and retained for the purpose of authorizing the construction of short side lines to banana plantations or lumber camps and that he expressly left out any authorization for a specific branch to Penonomé or its vicinity. I reminded him of his assurances to me that the bill contained no provision authorizing a branch line to Penonomé or its vicinity and I expressed the opinion that this article left in the bill was quite broad enough to cover such a construction. He declared that such was not the intention and that he was willing to enter into any satisfactory arrangement with our Government by writing or otherwise which would prevent the concession being construed as authorizing the branch line referred to and as would limit the branch lines authorized to short side lines for the purposes set out above.

I have [etc.]

Wm. Jennings Price