Procès-verbal of a Conversation Held on December 8, 1926, Between the Panaman Minister (Alfaro), Representing the Government of Panama, and the Chief of the Division of Latin American Affairs (Stabler) and Mr. Stokeley Morgan, of the Same Division, Representing the Department of State

Mr. Stabler stated that the Department had given careful consideration to the Memorandum presented by the Minister of Panama on October 14th, on the subject of Article II of the treaty concluded between the United States and Panama the 28th of July, 1926, and that it was the conclusion of the Department that it would be impossible to obtain from Congress an appropriation that would enable the American Government to undertake the construction of the roads north of Alhajuela on the basis suggested by the Minister in his memorandum, that is to say, Panama contributing to its cost the sum of $1,250,000 and the United States contributing the balance, which according to estimates made, will amount to about two million six hundred thousand dollars. Mr. Stabler added that the War Department has stated that the roads in reference do not have special military importance and that they have to request from Congress appropriations for other works or expenditures that are more urgently needed. Therefore, it is thought by the State Department that a plan involving an actual modification of Article II of the new treaty [Page 860] cannot be contemplated but that the United States Government is willing to do what it can to facilitate the carrying out of its provision about roads in a manner that is satisfactory to the Republic of Panama and in accordance with the provisions of the treaty.

Doctor Alfaro took up with further extension the reasons adduced in his Memorandum of October 14th and laid stress on the situation that would arise if the United States should require from Panama provisions for the reimbursement of the cost of the road in excess of the sum of $1,250,000 that would prove impracticable or difficult for Panama to make. In such a case, remarked the Minister, Panama would not receive for an indefinite time the compensation agreed upon in Article II for the special benefit of the Province of Colon and said article would impose an uncertain obligation on the United States while Panama is assuming a certain, definite and immediate obligation.

The Minister also adverted to that part of his memorandum where he speaks of the great financial effort already made by the Republic for the construction of highways and said that funds are still needed for the completion of the present road program; that it might be found difficult to make provisions for an additional expenditure of $2,672,000 for the roads north of Alhajuela and that if for that reason the construction of these roads could not be undertaken at once it would be very desirable to have $1,250,000 available for other roads urgently needed in other parts of the Republic instead of having that amount of money laid up in the United States Treasury.

Mr. Stabler stated that he was not in a position to make a formal proposal at this time but that he thought it would be possible to make an agreement before the treaty was ratified to the effect that in the event the Government of Panama does not desire to undertake the construction of the highways north of Alhajuela, and provide for reimbursement to the United States of the cost of construction of such highways in excess of the sum of $1,250,000 as contemplated in Article II of the treaty, the Government of the United States will undertake, should it be found practicable, the construction of such highways and public works as the Government of Panama may desire to have executed in any part of the Republic of Panama to the extent of $1,250,000, which sum is referred to in Article II of the Treaty signed between the United States and Panama July 28, 1926, or should the construction through its own agencies of such highways or public works be considered by the United States impractical it will place to the credit of the Republic of Panama the sum of $1,250,000, to be applied to the construction of highways and public works in a manner to be decided upon by the Government of Panama.

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Doctor Alfaro stated that he would inform his Government the position of the State Department and that after he received definite instruction on the subject he would again communicate with the Department.

The conference ended at five-thirty p.m., December 8, 1926.

For a permanent record of this conversation this procès verbal is signed by the officials named herein.

  • Jordan Herbert Stabler
  • S. W. Morgan
  • R. J. Alfaro