819.52G31/23: Telegram

The Chargé in Panama ( Flexer ) to the Secretary of State

57. Referring to the Department’s No. 28, July 1, 5 p.m. the Minister for Foreign Affairs was shown the above mentioned telegram in discussing Pinas Bay matter this afternoon. On Tuesday the President had specially instructed him to assure the Legation categorically that the sale of these properties will not be permitted by Panaman Government. He said that the President throughout has not hesitated in recognizing the obligation to cooperate with the United States under the new treaty.

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The Minister for Foreign Affairs stated that Company’s representative here will be instructed to inform Elliott at once that the Panaman Government will not permit pending transaction to be consummated and to request that Stockholm negotiations be abandoned until Elliott has heard the Panaman Government’s views and proposals on his return to Panama from Europe. Pressed concerning nature of intended proposal to Elliott, he said that while purchase or expropriation has been mentioned no proposal has yet been formulated and that the Government’s course will probably be determined in conversations with Elliott. He insisted repeatedly that the United States Government need not be concerned that the properties will be permitted to pass to potentially unfriendly alien interests.

While the assurance so given must be accepted perforce, the Department’s further instructions are requested. Canal Zone military authorities informed.