The War Department and this Department have now agreed upon a draft of
lease on the basis of which it is believed negotiations with the
Republic of Panama may commence. A copy is enclosed. Before instructing
you to begin such negotiations, the Department would like to receive any
comments you may wish to make regarding the draft and the propitiousness
of the present time for such negotiations. The War Department has
indicated its desire to obtain the desired leasehold on the Río Hato
tract without delay since it is urgently necessary to begin certain
construction work on that property. It is hoped, accordingly, that your
comments may be expedited.
Should you find the draft satisfactory and the present time propitious,
the Department is prepared to authorize you by telegraph to
proceed.3
[Enclosure]
Draft of Proposed Lease Agreement
Between the United States of America and the
Republic of Panama for the lease to the United States of lands in
Panama for use by the military forces in the defense and protection
of the Panama Canal.
Whereas, the United States of America and the Republic of Panama,
recognize that the utilization of additional lands and waters is
necessary for the maintenance, sanitation, efficient operation of
the Canal, and for its effective protection, and are desirous to
execute fully the provisions of the second paragraph of Article II,
of the Treaty of March 2, 1936,4 which provides:
“While both Governments agree that the requirement of further
lands and waters for the enlargement of the existing
facilities of the Canal appears to be improbable, they
nevertheless recognize, subject to the provisions of
Articles I and X of this Treaty, their joint obligation to
insure the effective and continuous operation of the Canal
and the preservation of its neutrality, and consequently,
if, in the event of some now unforeseen contingency, the
utilization of lands or waters additional to those already
employed should be in fact necessary for the maintenance,
sanitation, or efficient operation of the Canal, or for its
effective protection, the Governments of the United States
of America and the Republic of Panama will agree upon such
measures as it may be necessary to take to insure the
maintenance, sanitation, efficient operation and effective
protection of the Canal, in which the two countries are
jointly and vitally interested.”
Therefore, the undersigned, to wit: Narciso Garay, Secretary of
Foreign Relations and Communications of the Republic of Panama, and
Cordell Hull, Secretary of State of the United States of America,
acting by William Dawson, Ambassador Extraordinary and
Plenipotentiary of the United States of America, acting in the name
and representation of our respective Governments, by which we are
legally and sufficiently authorized, have concluded the following
contract:
- First. The Republic of Panama hereby leases to the United
States for a term of nine hundred and ninety-nine years,
beginning with the date of the passage of the decree-law
referred to in the tenth article hereof, the following
described areas of land situated in the Republic of Panama:
(Herein description of land as contained in the
Public Registry, Register of Property, Section of .
. . . . . .)
[Page 1074]
Add:
Excepting from said area a strip of land now used
as a part of section of the so-called National
Highway extending from (here insert east and west
termini and width of road), but with the right of
the United States to use said highway for
transportation purposes and to construct and
maintain road connections therewith, and to cross
said highway for access to the areas on either
side thereof, and to construct and maintain
thereunder, thereover or along the same, utilities
and installations necessary in connection with the
use of adjacent areas.
- Second. The grant of the foregoing Article shall include
the right to use the waters adjacent to said areas of land,
and to improve and deepen the entrances thereto and the
anchorages therein, and generally to do any and all things
necessary in connection with the utilization of the premises
to insure the efficient operation and effective protection
of the Canal.
- Third. Aircraft owned by the Republic of Panama and
aircraft of Panamanian registry owned by nationals of the
Republic of Panama may be permitted, under such rules and
regulations as may be prescribed by the United States, to
land and take off at any airport established within said
areas, but such permission shall be construed as occasional
and not exclusive and shall always be subordinate to use by
the United States; provided that the United States shall not
be responsible for any claims for injuries to persons in
such aircraft or damages to said aircraft or property caused
by the operation of said aircraft, or which may result
incident to the use of said areas by the United States;
provided further that such permission to land, take off,
and/or the use of the air space above said areas may from
time to time be regulated or suspended by the United States
when deemed by it to be in the interest of public safety or
necessary for the maintenance, sanitation, or efficient
operation of the Canal or for its effective
protection.
- Fourth. The Republic of Panama retains its sovereignty
over the above-described areas of land and water but
nevertheless consents that during the period of the
occupation by the United States of said areas under the
terms of this agreement, the United States shall have
complete use of said areas, exclusive jurisdiction over
military and civilian personnel of the United States, and
their families, and over all other persons within these
areas except citizens of the Republic of Panama. It is
understood and agreed by and between the parties hereto that
within a reasonable time after the signing of this agreement
the Government of the Republic of Panama will enact and keep
in force adequate legislation to insure the prosecution, and
severe punishment in case of conviction, of all citizens of
the Republic of Panama for offences committed within the
said areas and conferring [Page 1075] jurisdiction for the trial of offenders
upon the superior courts of the said Republic to the
exclusian of all inferior courts of the said Republic. It is
further understood and agreed that if this Article Fourth
does not prove satisfactory for the maintenance, sanitation
or efficient operation of the Canal or for its effective
protection, the United States reserves the right to request
of the Republic of Panama the exclusive jurisdiction over
the above-described areas.
- Fifth. The United States shall take such measures as may
be necessary to protect from injury by aircraft of the
United States persons and property passing over or upon said
National Highway.
- Sixth. The Republic of Panama covenants that the United
States shall peaceably hold and enjoy the said areas during
the said term without any interruption whatsoever by the
Republic of Panama or any person claiming under the Republic
of Panama.
- Seventh. All buildings and other improvements erected upon
said areas by the United States shall be and remain the
property of the United States and may be removed therefrom
by the United States prior to the expiration of this lease.
In the event of damage or destruction of said buildings and
improvements from any cause, there shall be no obligation on
the part of the United States or the Republic of Panama to
rebuild or repair such damage or destruction; or for the
United States to return upon the expiration of this lease,
the premises in the condition in which they were when the
United States entered into possession.
- Eighth. The Republic of Panama covenants that the above
described areas of land and property of the United States
therein; military and civilian personnel of the United
States and their families within said areas and their
property having its situs within such areas, shall be exempt
from all forms of taxation, assessment and levy by the
Republic of Panama during the term of this lease.
- Ninth. The Republic of Panama shall not, without consent
of the United States, permit the erection or maintenance of
any aerial lines or other obstructions constituting hazards
to flying in proximity to said areas or enact any
legislation curtailing or restricting the United States in
the use of said areas.
- Tenth. The price of rental for the entire stated period
shall be . . . . . . ., which the United States Government
shall pay so soon as a decree-law sanctioning this agreement
shall have been proclaimed by the President of the Republic
of Panama and published in the Official Gazette.
- Eleventh. No Member of or Delegate to the Congress of the
United States of America or Resident Commissioner shall be
admitted to any share or part of this lease or to any
benefit to arise therefrom. Nothing, however, herein
contained shall be construed to extend to any [Page 1076] incorporated company, if
the lease be for the general benefit of such corporation or
company.
Done at Panama, in duplicate, this . . . . . . day of . . . . . . .,
nineteen hundred and forty.
