819.6156 T 61/–

The Minister in Panama ( South ) to the Secretary of State

No. 1301

Sir: I have the honor to report that a contract has recently been signed by the Panaman Government and Mr. Henry Blair, representing the Tonosí Fruit Company, a subsidiary branch of the United Fruit Company established according to the laws of the State of Delaware. According to the terms of this contract, which will soon be presented to the National Assembly for its consideration, the Tonosí Fruit Company will establish at the port of Tonosí in the Province of Los Santos a port similar to the one maintained by the United Fruit Company at Almirante. The Tonosí Fruit Company will expend large sums in construction work in the Tonosí Valley. This work will include the erection of a concrete wharf capable of accommodating steamers drawing as much as 26 feet of water, oil storage tanks with a capacity of 50 or 60 thousand barrels of crude oil, and the construction of a 60 or 70 kilometer railway line, with a steel bridge across the Tonosí River. A large number of dwelling houses will also be constructed to house the four or five thousand laborers who will be employed by the Company. A large village similar to that already erected at Almirante will thus be established in the Tonosí Valley.

Extensive irrigation work including the construction of a dam in the upper Tonosí River will be undertaken. This irrigation work is necessitated by the annual dry season on the Pacific side. After full development about 15 or 16 thousand hectares with an annual production of about four million stems of bananas will be under cultivation.

The banana cultivation at Tonosí will be sufficient to load at least one steamer a week. Developments which the Tonosí Fruit Company contemplates involve an expenditure of from 9 to 12 million dollars.

Mr. Blair informs me that the United Fruit Company is anxious, through its subsidiary, to establish large plantations on the Pacific coast of Panama because their production on the Atlantic coast, particularly in the Bocas del Toro District, is rapidly declining. The United Fruit Company has large areas of reserve banana lands in [Page 500] other countries but desires to continue business in Panama where its relations have always been so satisfactory with the Government. The United Fruit Company has already carried on extensive explorations in other parts of the Republic of Panama in an attempt to find other regions suitable for large scale agricultural developments.

The text of the Tonosí Fruit Company’s contract is transmitted herewith in clipping from El Tiempo of January 14th.15

I have [etc.]

J. G. South
  1. Not printed.