819.51/386
The Panaman Minister (Alfaro) to the Secretary of State
Mr. Secretary: I have the honor to reply to Your Excellency’s note of the 18th instant in regard to the loan of $4,500,000 which the Republic of Panama intends to contract in the United States for the construction of roads.
The Panaman Government is deeply thankful to your Excellency’s Government for the interest shown in the welfare of the Republic, and being animated by this sentiment I will proceed to reply to the various points which you propound to me in the communication in question.
Your Excellency asks to be informed as to what arrangement the Panaman Government contemplates making for the purpose of settling its debt with the Canal, arising from the deficit which is said to exist in the water tax collected in the cities of Panama and Colon for the amortization stipulated in the Canal treaty. In this respect I am pleased to inform Your Excellency that on Saturday last, the 19th instant, the Government remitted the sum of $121,456 United States coin to the Canal authorities, through the American Minister at Panama, on the debt arising from the deficit in the water account up to March 31 of this year, which was the date of maturity of the last quarter settled, this payment being made subject to the claims which Panama has in connection with the system employed for settling her portion of the expenses of maintaining and operating the aqueduct, and which leaves the Republic of Panama free of indebtedness to the Canal on this score.
[Page 693]With respect to the second point of the note which I am answering, I likewise take pleasure in informing Your Excellency that the contracts for the construction of roads will be let to public bidders, being examined and accepted by the Central Roads Board, and the work done by the contractors being subject to the approval of the said Board, which, in giving its approval will authorize the payment of the sums due. The Government furthermore proposes to deposit separately the funds proceeding from the loan, in order that all disbursements may be made under the supervision of the Central Roads Board so that the purposes of the law authorizing the loan and of the law creating the Central Roads Board may be more fully and efficiently attained.
The Executive Power has the authority and intends to issue any Executive decrees that may be necessary for the accomplishment of the main purpose of the Government, that is, that the funds received from the loan may be devoted solely and exclusively to the construction of roads and bridges, and that the investment may be as advantageous as possible.
In this connection I likewise take pleasure in stating to Your Excellency that Doctor Eusebio A. Morales, Secretary of the Treasury of Panama on Special Mission, has instructions and full power to enter into a contract with a person in fiscal matters to serve as Fiscal Agent of the Republic, in accordance with the provisions of the Panaman law on the subject. The Secretary and I have given special attention to this matter and we believe we shall be able to obtain within a few days the services of a person who possesses the qualifications required for the discharge of this delicate office, for it is our desire that the new Fiscal Agent may enter upon his duties not later than next month.
With regard to the final question propounded to me by Your Excellency as to whether the Government has considered the question of calling for bids for the loan, the Secretary of the Treasury on Special Mission informed me that the method employed by him was to investigate the probable offers to be made by the most reputable banking houses of New York City which had shown interest in this loan, and that he became convinced through this investigation that the highest and most advantageous offer which the Republic could receive was that made by Messrs. W. A. Harriman & Company, and the Guaranty Trust Company, with which two firms it has signed a contract for placing the bonds of the loan.
I avail myself [etc.]
- File translation revised.↩