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

Dr. Alfaro telephoned me today that he had just received a cable from his Government that at the meeting of the Panamanian cabinet yesterday the question of the payment of the gold annuity was considered. The cabinet decided that the Fiscal Agent would be authorized “to turn over to the trustees of the loans the total of the proceeds of the gold payment in terms of lawful currency.” In other words, Dr. Alfaro said, the Government of Panama now desires to devote to the service of its loans the additional payment which it expects to receive in legal tender representing payment of the annuity on a gold basis. Dr. Alfaro said that he was issuing a statement to the press in these terms but wished us to know of it first.

He added that he had heard from the Fiscal Agent that the latter was returning the Treasury check to the State Department today.

Edwin C. Wilson