819.51/357: Telegram

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

66. The following project to provide legislation anticipated by article 138 of Panama Constitution was introduced in the National Assembly on 11th instant and passed first reading on the following day with one dissenting vote.

  • “Article 1. According as each mortgage, in which the six million treated of by article 138 of the Constitution are now invested, fall due and are canceled, the Secretary of Finance and Treasury shall order that they be placed in the National Bank. The sums which it receives in fulfillment of this law shall be invested in national securities in the form wherein said institution transacts such business.
  • Article 2. The sum which is at present deposited to the order of the Panaman Government in the Metropolitan Trust Company of the United States, is ordered to be used for the amortization treated of by law 41 of 1915.

The remainder of the loan shall be paid from the national funds.”

Department’s attention is directed to vagueness of concluding sentence of first article by virtue of which practically no limitation is imposed upon manner in which sums may be invested. Save for changes in wording and omission of phrase providing that funds “should augment capital of national bank” project is similar to a bill recently approved by Assembly but vetoed by the President on the ground of unconstitutionality implied in the phrase quoted. It is their opinion present measure has administration’s approval and Ruan believes that it will pass.

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