711.1928/319½
The Panamanian Minister ( Alfaro ) to the Chief of the Division of Latin American Affairs ( Wilson )
Dear Mr. Wilson: I acknowledge receipt of your kind communication dated yesterday whereby you are so good as to advise me that the subject of which I treated in my aide-mémoire of the 14th day of the current month was duly considered, and that it has been stated to you that in accordance with the laws of the United States the provisions of the budget law relating to the payments which must be made in foreign currency could not be applied, by analogy, to the payment of the annuity stipulated in the Canal Treaty.
With reference to the suggestion, repeated several times, that the Government of Panama accept the payment in the manner offered on February 26, 1934, “on account” and with reservation of all its rights, I must advise you that, after giving the subject due consideration, my Government has reached the conclusion that it does not comport with its interests to accept payment in that manner, and that an endeavor should be made to arrive at a complete and definitive solution on this subject.
At the meeting which we Panamanian Commissioners held with representatives of the Department of State on the 11th day of the present month, I referred to the fact that Panama could not agree to accept a payment on account because the United States was refusing to recognize the specific obligation of paying the balance which would bring up the total payment to the present equivalent of 250,000 gold dollars of the weight and fineness in force until the 31st of January, 1933, and I suggested that if in an exchange of notes reference was made to what was agreed upon in the negotiations relating to the payment of the annuity, possibly the difficulty could be obviated but on [Page 915] my Government’s measuring and weighing all the circumstances, the conclusion expressed above was arrived at.
I note that in your letter you make no reference to the additional aide-mémoire dated on the 16th day of the current month in which I referred to what was provided regarding the deposits made in the United States by the Government of the Philippine Islands and I repeat the opinion that just as that measure was adopted in favor of the Philippine Islands as an “act of friendship in recognition of their semi-sovereignty” so also the United States could, as an act of friendship towards a sovereign Republic with which it has such strong and special bonds, adopt some other measure which would permit Panama to receive the total amount of annual compensation stipulated for in the Canal Treaty without subjecting such payment to the inevitable delays and contingencies of the negotiations in course for the conclusion of a new treaty regulating the relations created by the pact of 1903.
I am [etc.]