Memorandum by the Chief of the Division of Latin American Affairs (Morgan)

Doctor Alfaro6 called for the first time since his return from Panama to discuss the treaty. He went over the whole history of the negotiations explaining various contentions of the Panaman delegates which had not been accepted by the United States. He said that the Panaman Government had hoped that the new treaty would clear up the difficulties which had arisen between Panama and the United States through the difference in interpretation of the Treaty of 1903 but to their great disappointment the Panamans had found the Department insisting absolutely on the American interpretation of the Treaty of 1903. The points on which the Panamans felt most keenly, namely, the establishment of bonded warehouses in the Zone, the wide extension of commissary privileges and the sale of supplies to ships transiting the Canal, had all been insisted upon by the Department [Page 489]although in the opinion of the Panamans they were absolutely contrary to Article XIII of the Treaty of 1903.

Mr. Morgan then went over with Doctor Alfaro the list of advantages accruing to Panama from the treaty which Mr. Morgan had drawn up some time ago and discussed them in detail with the Minister. Doctor Alfaro contended that some of these advantages were mere acts of justice which the United States could not possibly withhold, others were reciprocal and the rest amounted to very little. In short, Doctor Alfaro said that the Panaman Commissioners had been greatly disappointed and dissatisfied with the treaty but that they had met with such a firm attitude in the State Department that they had finally, after two years negotiations, been confronted with the alternative of either signing the treaty as it was or going on without it under the Treaty of 1903 as interpreted by the United States. Thus they had nothing to hope for except the choice of two evils. Faced with this dilemma they had signed the treaty and then gone to Panama and explained to the people the situation telling them that in the opinion of the Government it would be best for Panama to accept the new treaty, unsatisfactory as it was and unjust as it was to Panama, rather than to continue under the American interpretation of the Treaty of 1903. However, much to the surprise of the Commissioners and the Panaman Government the people of Panama had absolutely refused to have anything to do with the new treaty saying that they gained nothing by it; that it put it out of the question that they should ever be able to improve their condition or get what they considered justice and fair treatment from the United States. In short, if they signed it the country was hopelessly ruined; they would prefer to go on with the Treaty of 1903 struggling against the American interpretation thereof and still hoping for a fairer treatment some time in the future. Doctor Alfaro was particularly impressed by the fact that the merchants of Panama, whom he had expected to favor the treaty, were almost unanimously against it. They did not feel that the comparatively unimportant assurances granted them under Article IV anywhere near balanced the grave injustices done them in confirming the right of the United States to establish bonded warehouses and to make sales to ships. Furthermore, they were very bitter at the wide extension of the commissary privileges. Above all, Doctor Alfaro said, the people of Panama had been much incensed at the language of the treaty which they felt was not only unnecessarily harsh but in some cases practically insulting to the Panaman people. They felt, as Doctor Alfaro explained it, that the language of the treaty was “rubbing it in”. The Minister had a good deal to say about the complete lack of sympathy of the United States Government and [Page 490]the absence of any sign of a desire to show any friendship or helpfulness to Panama.

Mr. Morgan then asked the Minister what the Panaman Government desired to do, what concrete proposal, if any, he had to lay before the Department. The Minister said that he had not worked this out yet, he wanted to discuss the whole subject with the Department and try to work out some plan together; he was preparing a memorandum on the subject which he hoped to lay before the Department in a few days. Mr. Morgan said that the Secretary was out of town for two weeks but that Mr. Morgan would be glad to have the memorandum and study it before the Secretary returned and then he and the Minister could take the matter up with the Secretary when the Minister had some definite suggestions to make.

[Stokeley W.] Morgan
  1. Dr. Ricardo J. Alfaro, Panaman Minister at Washington.