711:1928/475: Telegram
The Secretary of State to the Chargé in Panama ( Flexer )
83. Legation’s telegram No. 169, December 14, noon. The surcharge of 25 percent referred to in paragraph 1(c) of the memorandum itemizing the points agreed upon by Presidents Roosevelt and Arias is on the basis of retail commissary prices to employees. The Department understands that this 25 percent surcharge over retail prices to employees is at present being imposed by the commissaries when such articles, that is, “articles of other classes” as defined in the minutes of the 14th meeting, are sold to ships. The Panamanian Commission has requested that this surcharge of 25 percent over retail prices to employees be also applied to sales to ships of articles classed as “sea stores”, but the Department has made no commitments in this respect beyond the general policy outlined in Article III, Section 7, of the proposed treaty, and in the clarifying exchange of notes to accompany [Page 908] the treaty, as forwarded to the Legation in the Department’s instruction No. 65 of September 4, 1935.16
The 25 percent surcharge referred to above is not to be confused with the surcharge of 25 percent on landed cost (plus 5 percent procurement surcharge) which the Department is informed is now being applied by the Panama Canal Storehouses to sales to ships of goods classed as “ships stores”. Since the United States is reserving the right to continue to sell “ships stores” as at present, no discussion of such sales appears necessary.
- Not printed.↩