File No. 819.154/19

The Panaman Commission to the Department of State


The present European war and its spreading to the American continent by involving the United States has brought into evidence the pressing necessity for Panama to develop her agricultural production in order not only to free her from dependence on some other distant country for the food of her people but also to turn her into a safe reservoir of provisions of all kinds for the armies that defend the Canal.

Panama is a tropical country where land may be found fit for the most varied cultivation, as plants of the temperate zones may be acclimated at various altitudes. Its soil also permits of cattle raising on a large scale. (As to these points, see Appendix A.2)

Notwithstanding these favorable conditions of climate and geographical situation, Panama produces but very little and her population is not growing at the rate that was to be expected from the proximity of the Canal, because of the lack of ways of communication.

Some American authorities who do not know the country and whose opinions are based on what they see on the map insist that [Page 1197] the sea must be Panama’s best and cheapest Way of communication. That opinion is in a large measure erroneous. Along the whole of the Pacific Coast the country has but three or four small sea ports of little consequence. All the other ports so called are but channels of sounds or rivers which no vessel can enter except at high tide which on the Panaman coast is eighteen feet higher than the low tide.

On account of this lack of harbors and the hampering effect of the tides, navigation in Panama cannot be as easy and cheap as in other countries. If, for instance, a steamer had to call at the ports of Pedregal, Horconcitos and Remedios, but a few miles distant from one another in the province of Chiriquí, it would have to leave the first port at high tide on any day, cast anchor in the open sea, and proceed on her way so as to arrive at Horconcitos with the first high tide of the next day; if she has to land or take cargo there she will be compelled to wait for the next high tide in order to leave and again lie at anchor in the open off the entrance to the port of Remedios until the next high tide brings her the opportunity to arrive at destination. To leave that port she has again to wait for the high tide. Thus the distance between those ports which on land could be traveled in a few hours by rail means a long delayed trip by sea, and the delay adds to the cost, dangers and uncertainties of the traffic.

The result of this peculiar condition of the Panaman coast is that certain regions of the country are entirely cut off from one another. A resident of Chepo, a town lying near the Bayano River, never has the facility or opportunity to visit the town of Puebla, near the Costa Rican border, and on account of this absence of contact the useful beneficent interchange of commodities between those regions is never created.

Now what the country needs is not the intermittent and uncertain contact afforded by vessels occasionally calling at certain ports; what it needs is the daily contact with the great center of consumption and exportation furnished by the cities of Panama and Colon and such a daily contact can only be brought into being by a railroad laid in the Isthmus along the Pacific slope. Of course there must also be built cart roads converging on the railway line which they are to feed, and also another highway lengthwise so as to reach the final result of establishing a dual system of transportation by rail and automobiles connecting all the sections of the country.

In considering these remarks the Government of the United States might inquire: Of what interest is it to the United States whether or no Panama has railways and cart roads? Why does not the Republic of Panama try and solve for itself those questions in which it is directly concerned?

Panama’s answer is easy and in our judgment conclusive.

The United States of America has assumed the solemn obligation to maintain and guarantee the sovereignty and independence of the Republic of Panama upon which lies the corresponding duty to provide for its own defense so as to lighten the fulfilment of the duty to protect assumed by the United States, and to cooperate with all its resources in the defense of the Panama Canal so as to maintain intact that great highway of commerce in the service of the world.

But how can the two countries perform their reciprocal obligations of protection, common defense and cooperation if Panama lacks ways [Page 1198] of communication over which troops and implements of war may be safely and speedily carried to any threatened point? How could the country and the canal be defended and protected if the country has not at its disposal public highways on land which would foster its industrial and agricultural output with the result that a large store of foodstuffs of all kinds would be at hand within the country.

The United States may contend that it is easy and practicable for it to send victuals over to Panama but it must not dismiss the contingency of a war with one maritime Power or more which would at least involve the provisioning of the Canal Zone in doubt and danger, nor from a human standpoint can it leave out of consideration the fate that may befall the Panamans left isolated in the interior and exposed to starve to death or to being overpowered and annihilated by an invader whose sole aim would be possession of the Canal.

The most elemental notions of the theory of defense for the Panaman territory and the Panama Canal coincide in establishing for the two countries an absolute and complete unity of interest and purpose. The United States can have no other interest in respect to Panama than that of seeing our country turned into a producing center of food products and into a prosperous and strong nation which its population and own resources would make an appreciable element in the defense of the Canal. To the Republic of Panama it is of vital interest that the nation which protects its sovereignty and independence should possess effective means of reaching any point of the national territory that may be threatened, and its ambition cannot be gratified as long as the country lacks railways and cart roads.

Inspired by these ideas and actuated by what it deems to be the harmonious interest of both countries the National Assembly of Panama enacted Law 44 of 1916 (Appendix B) which authorizes the Executive Power to conclude with the Government of the United States an agreement under which the railways and cart roads that the two countries need for economic, industrial and strategic purposes may be built.

Having made this brief statement, the Panaman Commission separately submits to the Government of the United States the propositions which in its judgment meet the situation in which the two countries are placed. If these propositions are accepted they will tend to producing between Panama and the United States a sentiment of fraternity stronger and firmer than that which now happily prevails.

  • Belisario Porras
  • Eusebio A. Morales
  • Julio Arjona


Art. I. The Republic of Panama and the United States of America declare it to be in the common interest of both countries to build railways and certain cart roads in the Panaman territory and therefore agree to contribute in equal shares to the cost of building the said works, under the terms of this convention.

Art. II. Immediately upon ratification and the exchange of ratifications of this Convention, the Government of the United States will appoint from its service a commission of military engineers who shall decide upon the best route for [Page 1199] a railroad running lengthwise over all the Panaman territory on the Pacific slope from the Costa Rican frontier to the Colombian frontier.

The same commission will also survey for cart roads connecting the capital of Panama with the other provinces of the country that may have strategical importance for the defense of the Canal.

The Government of Panama will deliver to the said military commission all the surveys, plans and estimates of the Panama-David Railroad made in 1910 by the Panama Railway Company.

Art. III. The commission of engineers referred to in the foregoing article will, when the best route for the longitudinal railroad shall have been determined and adopted and the cart roads to be built shall have been surveyed, report its conclusions to the Government of Panama with which it will perfect the arrangements requisite for the earliest possible start.

Art. IV. The Government of Panama will place at the service of the commission, with suitable guard and safeties, all the prisoners and convicts that may be put on public works, Panama assuming exclusive charge of the feeding, outfitting, quartering and transportation of the said prisoners and convicts and their guards.

Art. V. The commission of military engineers shall give employment on such construction work as may be undertaken to the Panaman engineers recommended by the Panaman Government so that they may gain experience in that class of work.

Art. VI. In order to enable the Republic of Panama to meet the payment of its share in the work contemplated by this Convention, the High Contracting Parties agree that the United States of America will advance to the Republic of Panama forty of the $250,000 annuities which Panama is receiving under Article [XIV] of the Treaty of November 18, 1903, for the construction of the Canal. The said sum shall be considered as deposited in the Treasury of the United States of America from the date of the ratification of the Convention and, under the deduction hereinbelow stated, shall be payable to the order of the commission of military engineers in charge of the constuction works, in the manner which will be agreed upon by the two Governments through an exchange of notes as to the method of payment.

As the Republic of Panama has pledged the said annuity of $250,000 to secure a loan of $3,000,000 out of which bonds for $2,250,000 only have been issued, the High Contracting Parties agree that out of the aggregate of the annuities advanced as provided by this Article there shall be held in reserve in the Treasury of the United States the amount required for the amortization of and interest on the loan in the manner agreed on in the contract signed by the Republic of Panama and the Farmers’ Loan and Trust Co., under date of November [2], 1914.

Art. VII. The United States of America undertakes to contribute to the building of the longitudinal railroad of Panama and cart roads recommended by the commission of military engineers in the amount of one-half of the cost of the said work, for which purpose it will appropriate a sum equal to that which may be left available of the advance to Panama of the annuities referred to in the foregoing Article. If upon completion of the work there should remain a surplus out of the half contributed by the Republic of Panama still in deposit in the Treasury of the United States, the said surplus shall be delivered to Panama.

Art. VIII. The railway when built shall be the property of the Republic of Panama but will be managed by the High Contracting Parties through a board composed of four members, the Presidents of the two countries each appointing two. The board shall appoint a manager who may or may not be one of its members.

In the event of an international war in which the United States of America or the Republic of Panama is a belligerent, the United States of America will be at liberty to take military possession of the railroad in order to facilitate the defense and protection of the Panaman territory and Canal of Panama. As soon as peace is restored, the railroad will revert to civilian management.

In the event of military occupation, the United States will be responsible for any damages done to the road by reason of such occupation and will cause all needed repairs to be made at its expense and without any delay.

Art. IX. The cart roads built out of the common fund which the two Governments may agree to create in accordance with Articles * * * shall be the exclusive property of the Republic of Panama, but the United States shall have free use thereof at all times.

  1. Not printed.