Papers Relating to the Foreign Relations of the United States, 1926, Volume II

711.192/205

Minutes of the Twenty-third Meeting of the American and Panaman Commissions, July 27, 1926, 5 p.m.²

July 27, 1926, 5 p.m.

The draft of the treaty agreed upon in informal conversations between members of the two Commissions from June 18, 1925, to date was submitted to final consideration of the Commissions.

With reference to the Preamble, Doctor Alfaro inquired if the use of the word “sovereign” with reference to the rights granted to the United States by the Treaty of 1903³ is meant to imply an extension of such rights or only a recognition thereof.

Mr. White replied that this was meant only as a recognition of all the rights granted to the United States by Article III of the Treaty of 1903.

Doctor Alfaro replied that this was satisfactory; that Panama stands by all her obligations and recognizes all those rights.

Doctor Alfaro requested the American Commissioners to confirm the agreement that the words “substitute Justices” in paragraph second of Article I are meant to include the substitute Justices known in the Republic of Panama as “suplentes”, as well as those known as “conjueces”. Mr. White confirmed the agreement between the two Commissions that the words “substitute Justices” are intended to include the substitute Justices known in the Republic of Panama as “suplentes”, as well as those known as “conjueces”.

Doctor Alfaro inquired in connection with paragraphs 3 and 4 of Article IV if private merchants renting space in the Canal wharves or in a bonded warehouse operated by the United States Government, or distributing merchandise by means of consignments in the terminal ports of the Canal “for orders” are included in the category of persons entitled to live in the Canal Zone.

Mr. White replied that the activities referred to by Doctor Alfaro would not, of themselves, entitle the persons mentioned by him to reside in the Canal Zone.

Doctor Alfaro asked the American Commissioners to confirm the arrangement agreed upon with reference to the provisions of paragraph 3 of Article IV and paragraph 2 of Article VI of the draft treaty. Mr. White stated that he was glad to confirm that it is of course understood that nothing therein contained affects the right of the Republic of Panama to collect customs duties or to impose sales or other taxes in the cities of Panama and Colon on goods imported, sold or consumed in those cities or in other parts of the Republic of Panama.

Referring to the term “enforce” used in Article VIII, which in the Spanish text has been translated “poner en vigor”, and the term “enforcement”, which in the Spanish text has been translated “ejecución”, Doctor Alfaro requested that there should be an understanding as to the use of such terms in the English text of the treaty. Mr. White stated that it is the intention of the United States to continue substantially the same system that has been in force in the cities of Panama and Colon since 1904, namely: sanitary rules and regulations prescribed by the United States sanitary officers will be promulgated by decree by the President of Panama. The sanitary officers in the cities of Panama and Colon will supervise the observance of the sanitary ordinances and will prescribe for transgressors thereof the proper penalties and such penalties or fines or arrests will be executed by the administrative or police authorities of the Republic of Panama.mr. White stated however that it is of course understood that this agreement in no wise curtails the rights of the United States under the penultimate paragraph of Article VII of the Treaty of 1903. Doctor Alfaro agreed.

Mr. White confirmed on behalf of the American Commission with reference to paragraph 1 of Article IX of the draft treaty, that it is not the intention of the United States to discriminate against the importation of radio sets and materials of any description because of their origin or country of manufacture. He stated that the provision agreed upon by the United States in the matter of licenses is for the purpose of the protection and operation of the Panama Canal.

With reference to Article X of the draft treaty Mr. White stated that the American Commission had agreed at the request of the Panaman Commission to take out of the penultimate paragraph reference to flying over the Canal Zone because the Panaman Commission had pointed out that this Article of the treaty referred to aviation in the Republic of Panama and not in the Canal Zone where it is of course understood control vests with the United States.

Doctor Alfaro confirmed the understanding that this reference was taken out as the treaty refers to aviation in the Republic of Panama and not in the Canal Zone where of course the United States prescribes the regulations for aviation.

Doctor Alfaro stated with reference to the last paragraph of Article XI of the draft treaty, by which Panama agrees to permit the armed forces of the United States to have free transit through the Republic for manoeuvres and other military purposes, that it was the understanding of the Panaman Commission that the provisions of Article VI of the Treaty of 1903 respecting compensation for damages caused the owners of private lands and private property by reason of the operations of the United States, its agents or employees, or by reason of the construction, maintenance, operation, sanitation and protection of the Canal, shall apply in the case of damages caused by the armed forces of the United States in manoeuvres or other military operations. Mr. White replied that the American Commission concurred with the understanding of the Panaman Commission that the provisions of Article VI of the Treaty of 1903 respecting compensation for damages caused to the owners of private lands and private properties by reason of the operations of the United States, its agents or employees, or by reason of the construction, maintenance, operation, sanitation and protection of the Canal would apply in the case of damages caused by the armed forces of the United States for manoeuvres and other military operations.

With reference to Article XII of the draft treaty Doctor Alfaro requested that the American Commission state in what proportion subsidiary silver currency is legal tender in the United States, in order to have established officially the proportion in which American silver coins shall be legal tender in Panama, in conformity with the monetary agreement. Mr. White stated that the extent to which the subsidiary silver coins of the United States are legal tender is governed by the provisions of Section 3 of the Act approved June 9, 1879,^3a reading as follows:

“That the present silver coins of the United States of smaller denominations than one dollar shall hereafter be a legal tender in all sums not exceeding ten dollars in full payment of all dues public and private.”

Standard silver dollars, whose weight and fineness were established by the Act of January 18, 1837, at 412.5 grains .900 fine, are legal tender at their nominal or face value in payment of all debts, public and private, without regard to the amount, except where otherwise expressly stipulated in a contract.

Doctor Alfaro stated that in various Articles of the treaty the English words “all” or “every” or other all inclusive terms are used. These had been translated into Spanish by the use of the definite article as such is the practice in the Spanish language where the definite article is used as all embracing and its use is not to be considered as making exceptions possible, unless specifically expressed, as might be understood if only the definite article were used in the English text.

Mr. White stated that the American Commission had been willing to agree to the translation into Spanish of the words “all”, “every”, et cetera, by the definite article in view of the explanation above made by Doctor Alfaro on behalf of the Panaman Commission.

Doctor Alfaro stated that it was the understanding of the Panaman Commission that the exception made in the first paragraph of Article VI permitting the United States to levy dues or taxes upon merchandise introduced into the Canal Zone for use or consumption therein does not conflict with Article V of the treaty providing that there should be granted reciprocal free importation of goods, wares and merchandise from the territory of the Canal Zone into that of the Republic of Panama and from the Republic of Panama into the territory of the Canal Zone. In other words, merchandise introduced from Panama into the Canal Zone for use or consumption therein would not be taxed by the United States. Mr. White stated that this also was the view of the American Commission.

Doctor Alfaro stated that it was the understanding of the Panaman Commission that the United States in the exercise of exclusive jurisdiction over radio station sites, the property thereon, and the personnel engaged in operating such stations, as well as the members of the military and naval forces of the United States supplying such stations, in accordance with the penultimate paragraph of Article IX of the treaty, would not exercise civil or criminal jurisdiction over other persons than those enumerated in that paragraph, who might be in the territory occupied by such radio stations. Such other persons would be turned over by the United States to Panama as the sovereign of the territory. Mr. White confirmed that this was also the understanding of the American Commission.

Doctor Alfaro stated that the Panaman Commission understood that Article XI of the Treaty, by which Panama agrees to cooperate in all possible ways with the United States in the protection and defense of the Panama Canal, does not impose on Panama the obligation to raise an army or establish a military service for the defense of the Canal. Mr. White concurred in this view on behalf of the American Commission.

The Panaman Commissioners said that they desired to state in connection with that part of Article I of the General Claims Convention⁴ that refers to the so-called Colon Fire Claims, that in agreeing to submit to arbitration the question of the original liability of Colombia for the damages sustained in the fire that took place in Colon on March 31, 1885, and also the question of the extent to which the Republic of Panama may have succeeded in such liability in case any should be found to exist, it must be understood that the Republic of Panama has made it an invariable principle of her international relations to assume a share of the external debts of Colombia in proportion to her population in November 1903; that consequently and inasmuch as such claims originated in an event that took place when Panama did not exist as an independent Nation, but on the other hand the damages sustained in the Colon fire would constitute today an unliquidated debt of Colombia, assuming that Colombia had any responsibility, it must be understood that Panama takes and will maintain, when the discussion of the proposed tri-partite agreement comes up, the position that the arbitration of the second question of the proposed compromis should be confined to the decision of two propositions (in case it be found that Colombia had the original liability), to wit: the Panaman proposition that Panama is under no obligation whatsoever to pay any part of the damages and a contrary proposition that Panama should pay a proportional share of the claims as in the case of the external debt of Colombia; and it is with this understanding that Panama agrees to the terms of the Claims Convention in this matter. The Panaman Commissioners added that while Panama agrees to cooperate with the Government of the United States in the negotiation of an arbitral agreement between Panama, Colombia and the United States, Panama reserves the right to join Colombia in her contention that she has no liability in fact or in law on account of the Colon fire of 1885, inasmuch as Panama has always denied that such original liability has ever existed on the part of Colombia.mr. White stated on behalf of the American Commission that it had taken due notice of the position of the Panaman Commissioners.

The meeting adjourned until July 28, 11 a.m., for the signing of the treaty.

• Francis White
• Joseph R. Baker
• R. J. Alfaro
• Eusebio A. Morales

2. The Commissions as originally constituted convened on Mar. 17, 1924, and adjourned sine die on Aug. 5, 1924, after holding 21 meetings. The Commissions as reconstituted in 1925 convened on July 18, 1925, and adjourned on July 27, 1926, after holding two formal meetings.
3. Foreign Relations, 1904, p. 543.
4. 21 Stat. 7.
4. Signed July 28, 1926, p. 865.