File No 819.77/284

Minister Price to the Secretary of State

No. 1420

Sir: I have the honor to report that, in compliance with the Department’s instruction No. 362 of April 4, directing me to attempt to obtain from the President of Panama an agreement in writing that no branch roads would be approved by him under the railroad concession granted by the last National Assembly to Basil B. Duncan without the approval of our authorities having been first obtained, I took the matter up with the Foreign Office first verbally, feeling that was the best method of explaining and of obtaining the consent desired. I later addressed a formal note, a copy of which I enclose.

While Secretary Garay has indicated to me that he believed there would be no hesitation on the part of the President in complying with the wishes expressed by the Department, I have not as yet received a response to my note.

I have [etc.]

Wm. Jennings Price

Minister Price to the Minister for Foreign Affairs

Excellency: Adverting to our conversation upon the same subject, I have the honor to refer again to the matter of the authorization contained in the concession granted to Mr. Basil Burns Duncan by the last National Assembly for the construction of a railway along the Atlantic side of the Isthmus and in the section of Panama lying between the Panama Canal and Costa Rica.

It will be remembered that considerable negotiation and correspondence have taken place in the past between our respective Governments relative to this concession, and that one quite similar was withdrawn on two occasions from the National Assembly in past years, as the result of the same being then considered by my Government inimical to the proper defense of the Canal and contrary to our treaty rights.

In a correspondence between Mr. Duncan and my Government last year objection was waived to the granting of the concession conditional upon there being eliminated the authorization to construct branch lines in a manner, which might be objectionable from the standpoints mentioned above. It would seem that Mr. Duncan refrained from asking to have incorporated in the concession the right specifically to construct a branch to Penonomé, but there was included in the concession, as will be seen from Article 2 thereof, an authorization for the building of branch lines of such a general character that the construction of same “at anytime and of any length and in any direction” is permitted, a solicitation of the authorization of the Executive Power of Panama in writing being first made.

My Government feels that the provisions of Article 2 under the recognition of its interest and rights in this matter, already heretofore accorded by your excellency’s Government, entitles it to request that there may be formally noted, [Page 1193] as was done for instance in the note from the Foreign Office of Panama No. S 5556 of January 30, 1915, relative to the use of certain funds authorized by the National Assembly of 1914–1915, that the use of the authorization embodied in said Duncan concession for the construction of branch railway lines will not be permitted by His Excellency, the President of Panama, without the consent of my Government through this Legation being first obtained. There, of course, can be no objection to such short branch lines as may be known as working branches for reaching banana, sugar and other plantations in the general neighborhood of the railway.

I enclose a copy of a letter from Mr. Duncan expressing his willingness and his good intentions with reference to this matter.

I am instructed to say, therefore, that it will be most pleasing to my Government if His Excellency, the President of Panama, may find it agreeable to have your excellency make reply that the use of the prerogative accorded him by Article 2 of said concession will be exercised only in accordance with a joint concurring action on the part of my Government.

I avail myself [etc.]

Wm. Jennings Price