711.1928/893
The President of the Foreign Bondholders Protective Council, Inc. ( White ), to the Assistant Secretary of State ( Berle )
Dear Mr. Berle: Referring to the conversation on October 17, 193911 between yourself and Messrs. Finley and Butler of the Department of State and Messrs. Clark and White, representing the Council, [Page 755] and to the understanding then reached that we should write you a letter setting forth certain questions concerning the Panama Canal annuity which it would be helpful for the Council to have answered before it undertook a presentation of the rights of the bondholders, to the end that the Council might more directly address itself on behalf of the bondholders to the particular problems raised thereby, I have the honor to submit the following:
- (1)
- Is the Treaty of 193612 to be regarded as amending the Treaty of 1903,13 leaving the latter as the fundamental instrument creating the Canal Zone and the obligations incident thereto except as amended by the Treaty of 1936, or is the Treaty of 1936 to be regarded as a superseding treaty, hereafter to be considered as the fundamental instrument upon and by which all rights and obligations, direct, indirect, and ancillary in and to the Canal Zone are to be wholly measured?
- (2)
- If the Treaty of 1936 is regarded as a superseding treaty then does it extinguish all rights founded upon or growing out of the old treaty, particularly the rights of American citizens which are based upon the provisions and obligations of the Treaty of 1903, as also the obligations of Panama incurred thereunder or having to do with the subject matter thereof?
- (3)
- Specifically, if the Treaty of 1936 is regarded as a superseding treaty, was it intended to wipe out the rights of the bondholders to the Canal annuity created and provided for in the Canal Treaty of 1903?
- (4)
- If the Treaty of 1903 is regarded as still the fundamental instrument creating the Canal Zone and governing all matters connected therewith which are not specifically amended by the Treaty of 1936, then is the annuity provided for in the later treaty to be considered as the equivalent of the annuity of the Treaty of 1903, or, if the new annuity be not the equivalent of the old, then what part of the new annuity is equivalent to the old annuity and is the excess to be regarded as an additional gift or grant to Panama?
- (5)
- Would the Department be good enough to furnish us with a copy of any directions or instructions or requests which it received from the Panamanian Government touching the matter of the accrued annuity payments and also a copy of the instructions which were sent by the Department to the Chase Bank in connection with its delivery to the Bank of the two checks sent to the Bank on account of the payment of the Canal annuity? These would be most helpful to us in understanding the questions involved in connection with this Canal [Page 756] annuity issue. We understood from you that it might be possible to send us a copy of these instructions.
A knowledge of the Department’s position on these matters, would enable the Council, representing the bondholders, to make to the Department a better presentation of the rights of the bondholders than would otherwise be possible.
Faithfully yours,