819.51/235: Telegram

The Minister in Panama ( Price ) to the Secretary of State

Following is sent for Fiscal Agent Ruan:

“Panaman Chargé d’Affaires, Washington, sent a cablegram August 30 stating that at the request of Doctor Owens he had not up to that time initiated negotiations for million dollar loan which he had been empowered by Panama to contract for payment of interior debt. On September 1st he was instructed by Secretary of the Treasury, under authority of the President, to proceed immediately with negotiation of this loan. On September 6 he cabled that situation is favorable to obtaining loan necessary for the reorganization of fiscal and economic conditions in the Republic, but haste will prejudice negotiations to this end and that he will have further conference with Doctor Owens. It is evident that Owens is influencing Panaman Chargé d’Affaires in the interest of his proposals for larger loan [Page 693] which will also afford capital for proposed agricultural bank. Fiscal situation already has been recommended [reorganized] by Secretary of the Treasury and myself and only needs million dollar loan for payment [of] internal debt to put Government on sound fiscal basis. Project of bank has nothing to do with fiscal reorganization and should be determined later. As a proposition I request respectfully that the Department make clear to Panaman Chargé d’Affaires that it has confidence in my recommendations; that it appreciated the million dollar loan as recommended by Secretary of the Treasury and myself and will lend its good offices toward obtaining it immediately but that project of Doctor Owens must [a] wait future consideration. Secretary of the Treasury and myself both feel that the work we have done in reorganizing fiscal situation will be to a large extent nullified unless our promises of early liquidation of internal debt through the medium of this loan can be fulfilled.”