819.154/233

The Secretary of State to the Panaman Minister ( Alfaro )

Sir: I have received your note of December 18, in which you state that, with reference to Article II of the Treaty signed between Panama and the United States on July 28 last, you wish to inquire on behalf of your Government the nature of the provisions satisfactory to the United States Government which the Government of Panama should take to reimburse the United States for the cost of construction of the highways north of Alhajuela in excess of the sum of $1,250,000 referred to in the Treaty.

In reply I have the honor to inform you that this subject has been given most careful attention by the officials of the United States Government directly concerned with the carrying out of the obligations imposed upon the United States by Article II, all of whom are keenly desirous of assisting Panama so far as may be possible to reap the advantages of the road construction program envisaged in the Treaty. Therefore, in reply to your note I am pleased to be able to inform you that the Government of the United States will undertake as soon as possible after the ratification of the Treaty by both parties the construction of the road from Colon towards Puerto Bello or from Colon to Alhajuela whichever the Government of Panama may prefer, expending thereon the sum of $1,250,000. From the point thus reached the United States Government will continue the construction of the road as soon as funds are deposited by the Republic of Panama to the credit of the Panama Canal using those funds as they accrue until the road program is completed.

Sincerely hoping that this will meet the desires of the Government of Panama I beg [etc.]

Frank B. Kellogg