The Minister in Panama (Gonzalez) to the Secretafry of State

No. 543

Sir: I have the honor to report that at an informal interview had today with the Secretary of Foreign Relations he voluntarily spoke regarding the progress of the treaty.

He stated that conversations were continuing on more or less minor matters in Washington, but that the objection made by the Panamanian Government as to the provisions of Article II of the Treaty of 1903 being inserted into the new treaty seemed to be meeting with obstacles. He said that Panama felt it had already complied with that provision of the treaty and that it was no longer necessary to incorporate it in any new treaty and that that was holding up further progress. That the same question had been raised by Mr. Louis Anderson, an international lawyer of Costa Rica, in connection with the boundary matter upon the ground that since the United States could take over any land which it might require in defense of the Canal, that under those conditions Costa Rica could not accept any land from the Republic of Panama in the settlement of its boundary dispute as it was not free to dispose of any land, which was at all times subject to be requisitioned by the United States Government. For this reason, the boundary conversations with Costa Rica had come to a sudden termination instead of, as expected, being adjusted and settled. Under the circumstances the Foreign Secretary stated that unless the United States was willing, particularly in time of peace, to [Page 610] refrain from taking over any further land of the Republic of Panama that that in itself would prevent the negotiation of a new treaty.

Further, that as a condition for the construction of the transisthmian road, the United States had suggested that it be permitted to erect along said road any and all fortifications and gun emplacements which it deemed necessary and that, regardless of the fact that Panama was anxious to build this road, it could not be considered if it was to be a military area, particularly that portion of the road located within the territory of Panama. Furthermore, the Secretary stated, that the conditions as to construction of this road were so severe in character that it would necessitate a $3,000,000. investment on the part of Panama which it could not afford and, in conclusion, since the main benefit of this road would enure to the United States and not to the Panamanian people, that if such provisions were to be insisted upon, Panama would abandon the idea of constructing the trans-isthmian road.

He further stated in conclusion that if the United States insisted on its right to take over further property of Panama that he presumed that the ultimate conclusion would be to withdraw the commission and continue under the old treaty until such time as other arrangements might be made. He informed me further that regarding the Madden Dam road, that it has been tentatively agreed that the Republic of Panama would turn over to the United States the jurisdiction thereof in exchange for permission to build the trans-isthmian road but that the conditions above mentioned made that impossible.

He further stated that in connection with the matter of radio, that regardless of the fact of whether the United States made a radio agreement or not the Panamanian Government intended to proceed with radio broadcasting under its recent laws, and the Madrid Convention25 which it had signed, as well as the United States.

It is quite apparent, insofar as the Panamanian Government is concerned, that they do not seem to be willing to grant any rights to the United States, whether they relate to the maintenance, operation and/or defense of the Canal or not, and that their sole theory is based upon the fact that it has already turned over to the United States all the land and waters which the United States required for the defense of the Canal.

I inquired from him as to what was the objection of Panama for the United States having whatever land was necessary for the proper defense of the Canal, and his reply was that without any limitation being made the people of Panama were of the opinion that under an unlimited provision as to further acquisition of land the United [Page 611] States might be able some day to extend its jurisdiction even to the Costa Rican border.

This afternoon I interviewed the President for the purpose of inquiring from him whether or not in his opinion he believed that a treaty which might be agreed upon in Washington and presented to the National Assembly could be passed. He stated that in his selection of Dr. López and Dr. Garay he had two views in mind, one, to obtain a representative of the Chiarista Party by the appointment of Dr. López and, secondly, from the Panamanian Society of International Action in the person of Dr. Garay, and that if they agreed in Washington to terms for a new treaty that he was positive that the Assembly would ratify it. On the other hand, he stated that there had been some delay caused in the conversations in Washington, first, owing to the fact that Dr. Garay had been ill and then Mr. Edwin Wilson having become ill, as well as the Christmas holidays, all of which had slowed up conversations.

However, the question of incorporating in the new treaty the provisions contained in Article II of the Treaty of 1903 was objectionable, and that unless the Government of the United States would be willing to eliminate that provision, Panama would be unable to continue conversations as to any new treaty; that as yet his Government had not received definite advice on this question from the State Department. His commissioners in Washington had written for further instructions as to whether or not they should remain any longer in Washington, and he had advised them that they should remain until the end of January before returning.

This information seems to be in accord with what is heretofore reported as to the conversation with the Secretary of Foreign Relations.

The President then stated that in addition to the objection on the part of his Government, to the subject matter of Article II of the treaty of 1903, that Louis Anderson, international lawyer in Costa Rica, was making much to do over the question of whether or not Panama was able to cede any land to Costa Rica in the boundary dispute, because the United States, under Article II, would be able to follow the land and claim it, which the President stated was of course an exaggerated view but, however, had been made authentic enough in Costa Rica to bring about the secession [cessation?] of all further conversation regarding the determination of the boundary.

I inquired of the President as to his opinion concerning the pending banking bill. He stated that it was his understanding that when the original bill was presented to Mr. Manuel José Diez, of the Chase National Bank, that he made no objection to it, but that he, the President, understood that the amendments which had since been made by [Page 612] the Assembly had changed the complexion of the bill; that the bill was coming up today for second debate in the National Assembly and for further amendments and that he as yet was not familiar with the context of the bill.

In speaking of the free port bill, the President stated that he intended to circularize the advantages of that bill among the exporters of the United States through the medium of his consuls, since he believed that sufficient advantages would be found for exporters under it and he wanted to have them fully advised through the medium of his consuls, who would be supplied with copies of the bill.

He also stated, in referring to the Blandin rubber contract, that he believed that contract would not only be beneficial to his people, since it would give rise to employment and to a product of exportation, but also to the Goodyear Tire and Rubber Company who, in time of war, would have a plantation accessible to the United States for its needs and that he was ready to re-execute the contract as amended just as soon as a representative of the Goodyear Tire and Rubber Company would come to Panama.

Respectfully submitted,

Antonio C. Gonzalez
  1. Signed December 9, 1932, Foreign Relations, 1932, vol. i, p. 873.