Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 4, 1917

File No. 819.77/285

Minister Price to the Secretary of State

No. 1431

American Legation,
Panama , June 16, 1917 .

Sir: Supplementing my despatch No. 1420 of June 9, enclosing a copy of my note to the Panaman Foreign Office requesting an agreement on the part of the President of Panama not to approve the construction of branch roads in connection with the railroad concession to Mr. Basil Burns Duncan, which was sent pursuant to the Department’s instruction No. 362 of April 4, I have the honor now to enclose a copy and translation of a formal note from the Panaman Foreign Office by which it is agreed that the Executive Power will not make use of the prerogative granted to it in Article 2 of the said concession, that is to authorize the construction of branch lines, without having first come to an agreement with our Government.

I have [etc.]

Wm. Jennings Price

[Inclosure—Translation]

The Minister for Foreign Affairs to Minister Price

Panama , June 15, 1917

Mr. Minister: I have the honor to acknowledge the receipt of your kind note F. O. No. 427, of the 2d instant, in which your excellency again refers to the concession granted by the last National Assembly to Mr. Basil Burns Duncan, authorizing him to construct a railroad along the Atlantic coast of the Isthmus, crossing the section of Panama situated between the Panama Canal and Costa Rica.

Your excellency declares that in the correspondence which took place last year between Mr. Duncan and the Government of the United States, the latter agreed not to oppose the making of this contract, to which it had objected on two previous occasions, on condition that there be eliminated therefrom the authorization to construct branches which might be undesirable from a certain point of view; and your excellency calls attention to the fact that, although nothing was discussed as to the building of a branch to Penonomé, the right to carry this out appears in Article 2 of the concession granted to Mr. Duncan, mentioning later that you do not wish by this remark to indicate that the Legation does not agree to the general sense of the concession which permits the construction of branches at whatever time, and in whatever direction for whatever length, provided that a written request be made to the Executive Power of Panama.

Your excellency ends by stating that your Government understands that the provisions of Article 2, bearing in mind the recognition made by this Government on previous occasions of the interest of the United States of America in this matter, give it the right to ask for a formal declaration that the use of the authorization incorporated in said concession for the construction of branches will not be permitted by His Excellency the President of Panama, without his having come to an agreement with the Government of the United States.

In reply, I have the honor to inform your excellency formally, complying with instructions of the Most Excellent President of the Republic, that the Executive Power will not make use of the prerogative which appears in Article 2 of the concession under discussion, without having first come to an agreement with the Government of your excellency.

I thank your excellency for the copy of the letter of Mr. Duncan which you kindly sent me, and gladly avail myself [etc.]

Narciso Garay