The Chargé in Panama (Muse) to the Secretary of State

No. 2027

Sir: With reference to my telegram No. 55 of May 19, 6 P.M.,8 and previous correspondence concerning the Panaman protest against certain sales made by the Canal Commissaries, I have the honor to transmit herewith copies of the Legation’s correspondence with the Panaman Secretary of Foreign Relations on the subject9 since Despatch [Page 722] No. 1998 of April 22, 1929, to the Department, together with an English translation of Señor Arosemena’s note.

. . . . . . .

I have [etc.]

Benjamin Muse

The Panaman Minister for Foreign Affairs (Arosemena) to the American Chargé (Muse)

D. D. No.

Mr. Chargé d’affaires: I have received your courteous Note No. 956 of the 14th instant,10 relative to the sale made by the Cristobal Commissary of various articles to three officers of the English ship Tritonia, to which I had the honor to call the attention of that Legation in Note No. 646 of April 11th last.

Replying to my communication above-mentioned requesting that in the future similar privileges should not be granted in the Commissaries of the Canal or the Panama Railroad to persons not connected in some way with the enterprises referred to, you inform me that you have received instructions from your Government to point out to me that there is nothing in treaties now in force which prohibits the Government of the United States from making sales in the Canal Commissaries to any one to whom it may wish to extend the privilege of purchasing in them. And you add that although, since the abrogation of the Taft Agreement, sales at the commissaries have been restricted to certain classes of persons, changes in this policy or the authorization of particular sales in special cases are questions which are entirely within the discretion of the United States Government so long as the treaty signed July 28, 1926, is not ratified.

Permit me, Sir, in my turn, to point out the nonconcurrence of the Government of Panama in the thesis sustained in your note to which I refer. The Government of Panama maintains, on the contrary, its constantly expressed opinion that there does exist a treaty in force which prohibits such sales and that that treaty is the one signed in Washington on November 18, 1903, by Plenipotentiaries of Panama and of the United States, ratified in due course by both countries, since this treaty establishes expressly in Article XIII who are the persons for whom the Government of the United States may import free of duty the articles therein mentioned, namely, “officials, employees, laborers and workmen in the service and the employ of the United States and their families”. This clause cannot be understood otherwise than as a limitation of the rights granted by Panama to the United States by the treaty in question, because otherwise it would be unnecessary and useless, and it is not conceivable that two plenipotentiaries [Page 723] would stipulate ineffectual clauses in an international convention of such great transcendency.

To admit that the United States availed itself of a right when it made sales in its Commissary at Cristobal to officers of the English ship Tritonia and that it is entirely within its discretion to extend to whomever it wishes the privilege of purchasing in these establishments, would lead likewise to the acceptance of the theory that this privilege could be extended, for example, to all the inhabitants of the Isthmus of Panama, and that in this way the United States would come to constitute virtually, under certain circumstances, the only salesman in the country; and would also be tantamount to converting the Canal Zone into “a competing and independent community which should ruinously affect their business and reduce their revenues”, diminishing at the same time the prestige of Panama as a nation; precisely what ex-President Roosevelt declared on a solemn occasion that it was not and could not be the desire of the United States to do; a promise which the Panaman people have steadily trusted, because of the confidence which the word of that great statesman, who then ruled over the destinies of the United States of America and who was at the same time the most characteristic exponent of the American people, must necessarily merit.

With reference to the treaty signed on July 28, 1926, permit me, Sir, also to express my opinion that that agreement should not be considered as pending ratification in its present form, since the National Assembly, upon examining it, suspended consideration of it until the Executive Power should have the opportunity once more to take steps conducive to the attainment of solutions which should fully satisfy the Nation’s aspirations, to which the representations made by our Legation in Washington following the aforementioned decision conform, representations concerning which the Panaman Government awaits the reply of the Department of State.

I avail myself [etc.]

J. D. Arosemena
  1. Not printed.
  2. Only the note of May 16 from the Panaman Minister for Foreign Affairs is printed.
  3. Not printed; it is based on telegram No. 33, May 13, noon, to the Minister in Panama, supra.