File No. 819.77/270
The Acting Secretary of War to the Secretary of State
Washington, January 31, 1917.
Sir: Referring further to my letter of December 26, 1916,2 in acknowledgment of your letter of December 16,2 enclosing for my comment a copy of a dispatch from the American Minister at Panama forwarding a copy and translation of a bill introduced in the National Assembly of Panama authorizing the President of Panama to construct railroads and wagon roads throughout the Republic by means of a special understanding with the United States:
I have consulted with the officials of the Panama Canal with reference to the desirability of taking advantage of the offer of Panama for cooperation in the construction of wagon roads and railroads and am advised that while the construction of highways and railroads in the Republic of Panama would obviously be of much assistance in the development of that country under proper circumstances, it does not appear essential that the United States should make any considerable expenditure for those purposes at the present time except such as might be found desirable from a military point of view. The formulation of a scheme for the land defense of the Isthmus is now under consideration and I have no doubt that such roads and railroads as may be considered by the military authorities as essential to the land defense of the Canal will be recommended and estimated for in their final report.
I am of the opinion that it would neither be proper nor desirable that the Republic of Panama should cooperate with the United States in the construction of such roads as may be found desirable for military purposes. Such roads in my opinion should be constructed and paid for wholly by the United States. Any lines of communication that are not essential for the defense of the Canal but which are advisable for the developments of the Republic of Panama should, in my judgment, be constructed and maintained wholly at the expense of Panama.