711.1928/882
The Secretary of State to the President of the Foreign Bondholders Protective Council, Inc. (White)
My Dear Mr. White: The Department has received your letter dated September 26, 1939 enclosing a copy of a cablegram which the Foreign Bondholders Protective Council, Incorporated, has addressed to the President of Panama, requesting “the return of the $860,000 of the Canal annuity” recently paid by this Government to the Republic of Panama. It is noted that 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.
You request that the Council be given a hearing, on behalf of the American holders of these bonds, before any further Canal annuity payments are made. In reply, you are advised that the Department will be pleased to receive the officers of the Council at their convenience and to hear their views with respect to the proper disposition of the Canal annuity payments. It may be stated in advance, however, that the Department considers that the instructions regarding these payments which have been received from the Panamanian Government are in conformity with instructions which had previously been received, and that this Government’s obligations will have been discharged upon their execution.
The payments have been subject to no conditions or terms other than that they represent full payment of the sum due from this Government on account of the Canal annuities for the period 1934–1939 inclusive.
Very sincerely yours,
Assistant Secretary