711.1928/345

The Acting Secretary of the Treasury ( Coolidge ) to the Secretary of State

My Dear Mr. Secretary: Reference is made to your communication of February 21, 1935,31 concerning the Panama Canal Zone Treaty Annuity. You state that the Minister of Panama has now inquired whether the recent opinion of the Supreme Court on the so-called gold clause cases would not permit this Government to make the payment of this annuity on the basis of the former value of the dollar. The officers of the United States can, of course, make payments only in the amounts appropriated by the Congress. The Act of April 7, 1934,32 carrying appropriations for the Department of State and other Departments for the fiscal year 1935, makes the following provision for the current Panama Canal Zone Treaty Annuity:

“For payment of the annual contributions, quotas, and/or expenses, including loss by exchange, in discharge of the obligations of the United States in connection with international commissions, congresses, bureaus, and other objects, as follows: … Government of Panama, $250,000 …; in all, $579,948, together with such additional sums due to increases in rates of exchange as may be necessary to pay in foreign currencies the quotas and contributions required by the several treaties, conventions or laws establishing the amount of the obligation for the fiscal years 1934 and 1935.”

Inasmuch as the obligation of the United States under the treaty with Panama, is to pay in money of the United States, not in a foreign currency, it would appear that there is at present authority to pay to Panama only $250,000. If this view is correct, the recent decisions of the Supreme Court would not seem to have any bearing upon the amount which the officers of the Government are authorized to pay to Panama on February 26, 1935.

Sincerely yours,

T. J. Coolidge
  1. Not printed.
  2. 48 Stat. 529, 534.