711.1928/882

The President of the Foreign Bondholders Protective Council, Inc. ( White ), to the Secretary of State

Dear Mr. Secretary: I enclose herewith, for the information of the Department, a copy of the cable10 which the Council has to-day sent to the President of Panama requesting the return of the $860,000 of the canal annuity paid directly to Panama last week. The Council feels that these funds are unquestionably pledged to the service of the Panama dollar bonds and that this sum should be paid by the Panamanian Government to the proper paying agents for the service of the dollar bonds of Panama.

As I have said orally to members of the Department in the past, the Council feels that the full Canal annuity of 430,000 Balboas a year is pledged for the service of the bonds and should, under the terms of the bond contracts and related documents, be paid directly to the Fiscal Agents serving these bonds, and I have the honor to request that the Council be given a hearing, on behalf of the American holders of these bonds, regarding this matter before any further Canal annuity installments are paid.

I trust you will agree with me that the bondholders have a very real interest in knowing the terms and conditions which the Government of Panama requested should be attached to the two payments of $1,500,000 and $220,000 to the Chase National Bank and that you will therefore be willing to advise the Council, as set up to represent the bondholders’ interests, what were, if any, such terms and conditions.

Needless to say, the officers of the Council are at the disposal of yourself and other members of the Department to discuss the matter of the Canal annuity payments at such time as may be most convenient to you or to the other officers of the Department.

Faithfully yours,

Francis White
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