819.51/950: Telegram
The Secretary of State to the Chargé in Panama (Flexer)
58. Your 108, October 21, 10 a.m. and the Department’s telegram No. 57 October 20, 7 p.m.
Messrs. Lancaster8 and Reynolds9 representing respectively the National City and the Chase Bank have just called on the Under Secretary to express their extreme concern over the provisions of the “guarantee bond bill”.
They were informed in confidence of the informal representations he had already made to the Panamanian Minister on October 18, the substance of which the Minister had agreed to despatch immediately by airmail to President Arosemena. Mr. Welles also informed them of the substance of the instructions sent you last night.
After outlining their objections to the measure, Messrs. Lancaster and Reynolds stated that their banks had come to the reluctant decision that the present situation left them no alternative but to instruct the managers of the National City and Chase Banks in Panama to present a formal statement to the Panamanian Minister of Finance tomorrow informing him that if the law were enacted as passed in second reading the parent companies would seriously have to consider whether the banks could continue to operate in the Republic. They stated that the Royal Bank of Canada concurs fully in this decision and will take similar action.
You are requested to discuss the matter immediately with the Panamanian Minister for Foreign Affairs and to express to him the hope of this Government that before further action is taken on the bill, an opportunity will be afforded the National City Bank and the Chase National Bank to discuss the situation with the appropriate Panamanian authorities for the purpose of seeking some fair and reasonable solution. In this connection please telegraph whether in your estimation it would be desirable for the American banks to send special representatives to Panama for that purpose.