The Secretary of State to the Minister in Panama ( South )
Sir: The receipt is acknowledged of your despatch No. 352 of November 17, 1923, transmitting a note from the Secretary of Foreign Affairs of Panama regarding the abrogation of the so-called Taft Agreement.
The Department desires that you make the following reply to the note in question:
“I have the honor to acknowledge the receipt of Your Excellency’s note, dated November 14, 1923, in reply to my note of the sixth of [Page 680] the same month informing you of my Government’s intention to abrogate the so-called Taft Agreement on May 1, 1924.
“Your Excellency states that, inasmuch as the Taft Agreement was entered into on behalf of their respective Governments by the President of Panama and the Secretary of War of the United States, it is a true public treaty and cannot, therefore, be abrogated without the consent of the Republic of Panama. You add that, although our two Governments are at present engaged in considering the bases of a new arrangement better suited to conditions on the isthmus, now that the canal has been constructed, it is impossible to determine the period of time which will be occupied by the negotiations of such an arrangement and that for this reason the Government of Panama is obliged to make express reservations as to the sufficiency of the period at the termination of which the United States Executive has determined that the Agreement shall cease to operate.
“You state, furthermore, that in the event it shall prove possible prior to May 1, 1924, to replace the present agreement with one more responsive to the interests and aspirations of both parties, your Government will make no objection to the abrogation of the Agreement on that date, but that if the negotiations incidental to the new arrangement contemplated shall not first have reached a successful conclusion in the form of a pact formally accepted by both Governments, the Government of Panama cannot admit that the United States Government may on its sole authority declare the Agreement abrogated.
“I have been directed by my Government to make the following reply to Your Excellency’s note under acknowledgment. The Government of the United States finds itself unable to concur with the construction which the Government of Panama has sought to place upon the temporary agreement, or modus vivendi, embodied in the Executive Orders of December 3, 6, 28, 1904, January 7, 1905, and January 5, 1911, the first of which was the subject of an agreement accepted by the President of Panama and the Secretary of War of the United States following conversations held at Panama from November 28 to December 3, 1904.
“The Government of the United States is constrained to call the attention of the Government of Panama to the fact that it was not the understanding of this Government either before or after the negotiations preliminary to the establishment of the Agreement that it was anything other than a modus vivendi to serve as a temporary basis for the settlement of difficulties outstanding between the two Governments during the construction operations of the Panama Canal. This was made clear to the representatives of Panama by Mr. Taft at the conference which met in the President’s Palace at Panama on November 28, 1904, at 10 a.m., the day following his arrival on the isthmus. In discussing the purpose of his mission to Panama, Mr. Taft said, in the presence of President Amador and Mr. Santiago de la Guardia, Panaman Secretary of Foreign Relations:
‘Now, as I have said already, it is not for me to enter into a discussion, because I have not the power to vary the position taken by Secretary Hay with reference to the extent of the powers which the United States might lawfully exercise in the Zone.
‘But my attitude must be this: Assuming the power to the extent declared in Secretary Hay’s note, how far can I go in waiving the exercise of these [Page 681] powers and withholding the exercise of powers already exercised, so as to assure the Government of Panama that we wish to exercise no powers that we do not deem necessary in the construction, maintenance and protection of the Canal?
‘Now, I am not in a position to waive absolutely—I mean to give up the right to exercise—those powers, but I am given authority by the President to establish now, subject to action by Congress, a nonexercise of those powers, such as I hope will be satisfactory to the Government of the Republic, and will continue indefinitely until the construction of the canal shall so affect the relations and conditions existing as to require a new adjustment of the relations between the two Governments.
‘Now, that I may make myself plain: With the present Government, with President Amador and these gentlemen as his advisers, it might very well be that we should allow to lie dormant the exercise of powers that in case of the election of a Government whose personnel would not be so friendly to the United States we might have to use, and thus to protect our construction and maintenance and control of the Canal by the exercise of greater powers than those we desire not to exercise.
‘I must make my position clear with respect to this, so that there will be no misconception of the extent of my powers. What I am here for is to see what now can be done in our actual conduct and by the issuing of an Executive Order which shall repeal or effect or modify orders already issued, which shall suit your views with respect to the points you have mentioned.’
“Acting under this conception of the powers conferred upon him by the President of the United States, Mr. Taft succeeded in arriving at a complete understanding with the high authorities of the Republic of Panama; but prior to submitting his draft of the prepared [proposed?] settlement for final acceptance by the Government of Panama, he addressed on December 2, 1904, a telegram to the Department of State28 containing a summary of the provisions of the suggested settlement. In that telegram he expressed the following opinion concerning the transitory nature of the order which he proposed should embody the provisions of the agreement:
‘The order is of course revocable at will, and its operations can be suspended by Panama by refusal to continue compliance with any of its conditions, but I believe from conference that, adopted, it will continue satisfactory basis of relations between parties until opening of canal.’
“That it was not the intention of my Government, acting through its Secretary of War, to bind the United States to any definitive interpretation of its rights under the Treaty of 1903, is further emphasized by the following statement of Mr. Taft before the Committee of Interoceanic Canals of the United States Senate on April 18, 1906:
‘The stenographic account of our first conference shows quite clearly the attitude which I felt under the instructions of the President it was proper for me to take, namely, that I was there not to construe the treaty, not to assert the full powers of the United States, but to make a modus vivendi which should bind neither party to any permanent construction of the treaty.’
“An examination of the provisions of the Executive Order of December 3, 1904, reveals, in the opinion of my Government, the transitory character of the Agreement, but it is believed sufficient for present purposes to cite in this connection the concluding section of the Order:
‘The operation of this Executive Order and its enforcement by officials of the United States on the one hand, or a compliance with and performance of the conditions of its operation by the Republic of Panama and its officials on the [Page 682] other, shall not be taken as a delimitation, definition, restriction or restrictive construction of the rights of either party under the treaty between the United States and the Republic of Panama.’
“Inasmuch as the non-exercise of certain rights conferred upon the United States by the Treaty in question was stipulated in the Agreement, the meaning of the foregoing section XII is clear in the sense that the United States Government reserved to itself entire freedom of action in case it should at a subsequent time desire to withdraw from the Agreement. The Agreement, since it was intended as a temporary arrangement to cover the period of the construction of the Canal, is thus deemed to have served its purpose. It no longer provides a suitable basis for the adjustment of questions arising out of the relations between the Canal Zone authorities and the Government of Panama.
“The Department has noted the expressions of the Panaman Government’s opinion that the period of approximately six months, at the termination of which this Government has announced its intention to abrogate the Taft Agreement, will prove to be insufficient for the consideration of the more permanent arrangement by which it is proposed to supersede that Agreement. In this connection my Government desires me to invite your attention to the fact that it has already expressed in its note dated October 15, 1923, to the Panama Legation in Washington, its willingness to enter into negotiations with the Government of Panama for an agreement by which it is hoped to settle all matters in controversy between the two Governments. The Government of the United States, relying upon the announced intention of the Government of Panama in entering upon such negotiations to deal with the United States openly and frankly as a staunch friend, and not to assume the attitude of a nation whose interests are antagonistic to those of the United States, entertains the hope that these negotiations will not be protracted beyond the date specified.”
I am [etc.]
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