File No. 819.77/280
The Secretary of War to the Secretary of State
Washington , April 30, 1917 .
1. I am in receipt of a letter from the Counselor of your Department dated April 4, 1917,2 inclosing a despatch from the American Minister at Panama, with which he forwards a copy of a translation of a concession awarded by the Republic of Panama to Mr. Basil Burns Duncan for the construction of a railroad on the Atlantic side of Panama, extending from the mouth of the Chagres River in the direction of Chiriqui Lagoon.
2. The concession includes the privilege of constructing branch lines of any length and in any direction; also the privilege of establishing ports, wharves and landing places.
3. As stated in my letter to you dated January 26, 1917, the War Department believes that the construction of branch lines in certain localities might prove detrimental to the defenses of the Canal.
4. The copy of the concession granted to Mr. Duncan, forwarded with the American Minister’s despatch, grants to the contractor a much more liberal and comprehensive authority for the construction of branch lines, ports, wharves and landing places, than has heretofore come to the notice of this Department.
Under it, the contractor may build such lines at any time, of any length, and in any direction, subject only to the restriction that each line must first be authorized by the Executive Power of the Republic of Panama.
He may establish ports, wharves and landing places in connection with the railroads and branch lines of which the contract treats, subject to the restriction that authority to establish same shall be granted by the Panama Government to the contractor by means of a special contract, in accordance with the stipulations of Law 82 of 1904.
5. In my letter to you on this subject dated March 27, 1917, I suggested that an agreement be made, if practicable, with the President of Panama, whereby the American Minister to Panama, the Governor of the Canal Zone, and the Commanding General, U.S. troops, Canal Zone, acting together in the interest of the Government of the United States on these matters, should be permitted to pass on all projects for the construction of branch lines, before the President of the Republic should grant authority, under the terms of the concession for such branch lines.
6. At the time of writing the above-mentioned letter, the full text of the concession was not at hand.
It is therefore now suggested that the agreement heretofore proposed be made to include not only questions concerning the construction of branch lines, but also questions concerning the establishment of ports, wharves and landing places, and such other questions as may arise, from time to time, in the development of the project under the terms of the concession, the character of which, in the opinion of the officers named to represent the United States, assume aspects prejudicial to the interests of the United States.[Page 1192]
7. The War Department believes that the agreement proposed is essential to the proper protection of this Government’s interests and to the future amicable relations between our Government and the Republic of Panama.
- Not printed.↩