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

No. 767

Sir: The Department has received your despatch No. 2027 of May 20, 1929, enclosing a note of May 16 from the Minister for Foreign Affairs in answer to your note of May 14, regarding the sale of certain articles by the Cristobal Commissary to officers of the English Ship Tritonia.

You will please address the following note to the Minister for Foreign Affairs in reply thereto:

“I have the honor to acknowledge the receipt of Your Excellency’s note of May 16, 1929, relative to the sale made by the Cristobal Commissary [Page 724] of various articles to three officers of the English Ship Tritonia.

“In reply, I am instructed by my Government to say that the position of my Government upon the point you raise regarding Article XIII of the Treaty of 1903 was clearly and definitely set forth in the note of Mr. Hay to Mr. de Obaldía of October 24, 1904.11 As to the authority of the United States in the Canal Zone, your attention is directed to the note of the Secretary of State, Mr. Hughes to the Panaman Minister in Washington on October 15, 1923,12 in which he stated that ‘in view of the treaty provisions above [before] referred to (provisions of the Treaty of 1903), the provisions of Article 3 of the Panaman Constitution, the laws passed by the Panaman Assembly, the decisions rendered by the Supreme Court of Panama, and certain acts of the Executive branch of the Republic of Panama in the matter, the question of the exercise of jurisdiction by the Panaman Government over the Canal Zone, as stated in Mr. Hay’s note of October 24, 1904, to Mr. de Obaldía, can no longer be considered as open to discussion between the two Governments’.

“You state that to admit that the United States availed itself of a right when it made sales in its Commissaries to officers of the English Ship Tritonia, which sales were made, be it noted, under peculiar circumstances of stress, as a humanitarian measure, would lead to the acceptance of the theory that this privilege can be extended to all the inhabitants of the Isthmus of Panama and that the United States would come to constitute under certain circumstances virtually the only salesman in the country and would be tantamount to converting the Canal Zone into a competing and independent community which would ruinously affect their business and reduce their revenues which ex-President Roosevelt declared it was not the desire of the United States to do. In reply I desire to point out that ‘under existing Treaties there is no prohibition against the United States selling to all the inhabitants of the Isthmus of Panama. The United States has not done so, however, and as President Roosevelt stated, it is not its desire so to do. In making this statement, President Roosevelt gave expression to the policy of this Government,—a policy to which it has closely adhered—but the statement will not admit of such a broad construction as to imply any intention on President Roosevelt’s part to limit the rights definitely accorded to this Government by the Treaty of 1903.

“Finally, you state that the Treaty signed on July 28, 1926, should not be considered as pending ratification as the National Assembly suspended consideration of it until the Executive Power should negotiate further and you refer to the steps taken by the Panaman Legation in Washington in the premises.

“I am instructed to point out that many of the apprehensions expressed regarding the provisions of the Treaty appear, on close examination, to be due to a misunderstanding of the intent of its provisions. My Government feels that certain of the misapprehensions of Panama may be definitely set at rest by an exchange of notes should such be the desire of Panama.

“With respect to the suggestions for fundamental changes in the Treaty, such as the elimination of Article II, regarding the cession [Page 725] of a portion of Colon, it may be remarked that the Treaty of 1926, as in the case of most treaties, is the result of a mutual accommodation of interests. Long and tedious negotiations were conducted during which all the points embodied in the Treaty were most minutely considered and discussed from all points of view. It may be pointed out that correspondence leading up to the negotiations in which the viewpoints of the two Governments were set forth carefully in exchange of notes began the latter part of the year 1922. The actual negotiations opened in March, 1924, and the Treaty was signed on July 28, 1926. There was no haste in the consideration of the points at issue. Seldom has a Treaty been gone into more carefully, minutely and painstakingly, and few Treaties have taken so long to negotiate. All points were carefully considered and weighed and an accommodation of interests was finally arrived at. Should Panama now desire to change the Treaty in such a way as to delete therefrom certain benefits conferred by the Treaty on the United States, it would, of course, be necessary for the United States to reconsider the whole Treaty with a view to deciding what benefits accorded to Panama by the Treaty must likewise be deleted if a true accommodation of interests is to be arrived at.

“The Treaty of 1903 forms the charter of the relations between the United States and Panama and the United States, before undertaking the vast enterprise of constructing the Canal, assured itself that it had ample rights, power and authority to justify such an undertaking. The Treaty of 1903 accomplishes this and provides, therefore, in the view of my Government all the essential elements for satisfactory relations with Panama. My Government, however, was happy, in view of the Panaman representations that the exercise by the United States of some of the rights obtained by it in the Treaty of 1903 would work a severe hardship to Panama without commensurate advantages to the United States, to review the situation and to forego certain of its rights in order that Panama might obtain certain additional benefits. The Treaty of 1926 was the result. As that Treaty accorded most generous treatment to Panama and met its requests in a most ample manner, the United States Government learned with great surprise that Panama was not satisfied with the provisions of that Treaty. It feels, however, that much of the apprehension of Panama is groundless and is the result of criticism directed against the Treaty before that Treaty has been given a trial. This trial can be given only after the ratifications of the Treaty when the provisions thereof enter into effect. As stated above, the United States Government is satisfied to base its relations with Panama on the Treaty of 1903. It made very generous concessions to Panama in the Treaty of 1926 and it feels that a trial of those provisions will prove that the apprehensions of Panama are groundless, especially if, as stated above, an exchange of notes should be made to clear up points, the interpretation of which may appear doubtful to Panama. Should Your Excellency’s Government have further views to express in the matter, they will of course be carefully and sympathetically considered in all their aspects by my Government.”

I am [etc.]

Henry L. Stimson