Memorandum of Conversation, by the Ambassador in Panama (Dawson)5

The interview was held at the Presidential Palace on November 7, 1940, lasted from 11 a.m. to 12 m., and was participated in by President Arias, Secretary of Foreign Relations De Roux, Lt. General Van Voorhis, and Ambassador Dawson.

With the President taking the initiative, the conversation was conducted throughout in English, in spite of the circumstance that Secretary De Roux does not speak or understand this language. The President had before him a typewritten memorandum which he consulted from time to time.

He opened the interview with the statement that he had been advised by Dr. De Roux that the Army desired to utilize lands in the Republic for defense purposes; and that his Government was prepared to cooperate in the defense of the Canal and in hemispheric defense.6 At this point and later in the interview, he stated that the Government must take into account Panamanian public opinion. The following specific points were taken up by the President:

(1) He inquired of General Van Voorhis if the military installations contemplated by the Army would not constitute military objectives for the enemy in the event of war. General Van Voorhis replied that in general this would be true. The President pointed out that in consequence military objectives would be spread all over the Republic. (While the President did not specifically say so, it seems clear [Page 1077] that he brought this question up for the purpose of showing that compliance with the Army’s request for lands would subject various districts to the eventual danger of bombardment and would consequently represent a sacrifice on the part of Panamá.)

(2) The President stated that in general the Government was not in favor of the construction of new roads leading from the Canal Zone into the Republic. (In a previous interview with the Secretary of Foreign Relations, General Van Voorhis had pointed out that the establishment of observation posts in the vicinity of the Zone would be accompanied by the building of roads which would open up a good deal of land.) Dr. Arias said that roads from the Zone into Panamá would facilitate smuggling; that this was a serious problem; and that he had had under consideration the closing of certain streets leading from the Zone into the City of Panamá. (It would appear that here again the President was building up Panamá’s case.)

(3) The President suggested that, in order to make a clean slate, we might consider in conjunction with the proposed leases a number of other pending matters. He mentioned specifically Río Hato, Taboga, Taboguilla, and Paitilla; the aqueduct (presumably a reference to pending questions pertaining to water works and sewers); the Panamá Railroad Company (from his subsequent remarks it appeared that the President had in mind the possibility of arranging for the early reversion to Panamá of lots in Panamá and Colon owned by the Company); and the commissary problem (here the President mentioned as desiderata an increase in commissary prices and/or the limitation of sales to a certain percentage of employees’ wages).

Mr. Dawson said that, without implying any lack of willingness to discuss any of these problems, he wished to point out that the question of lands needed for defense was an extremely urgent one and that he hoped that it would not be linked up with other matters which would necessarily entail considerable discussion. The President said that he realized this but that some of the matters which he had mentioned were also very urgent from Panamá’s point of view.

(4) With respect to the period for which lands are to be leased, the President said that he was loath to commit succeeding administrations and that he would prefer a lease for a four-year period (or for six years in case the presidential term is extended to six years as is contemplated in the proposed new constitution now under discussion). General Van Voorhis and Mr. Dawson pointed out that four or six years was a very short period; and that as respects certain lands there were planned heavy expenditures the authority for which might make necessary a longer lease. The President said that it should prove possible to work out some satisfactory formula; and General Van Voorhis suggested that a solution might be found by making suitable provision for the renewal of leases.

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(5) As regards jurisdiction, the position first taken by the President was that Panamá must retain full jurisdiction. In this connection, he remarked in particular that all crimes must be referred to Panamanian judges. Mr. Dawson made it very clear that no question of sovereignty was involved and that Panamá would of course retain its sovereignty. He pointed out, however, that provision must be made for the maintenance of order and discipline and that our authorities would require a certain measure of jurisdiction. After some discussion, the President said that he would agree to the granting of jurisdiction over military personnel but that this was as far as he could go and that Panamanian courts must have jurisdiction over civilians. General Van Voorhis agreed in principle. The President said further that he would want it understood that the Panamanian Government would have the right to send (giving advance notice to the Embassy) duly authorized officials into the leased areas for the purpose of making inspections. General Van Voorhis replied that there would be no objection to this.

(6) The President requested that a battery (3B on General Van Voorhis’ map) to be situated in Panamanian territory very close to the Zone be moved into the Zone. He pointed out that public opinion would not understand why a battery so close to the border could not just as well be located within the Zone. General Van Voorhis said that he would study the matter.

(7) With respect to emergency landing fields (involving no permanent installations), the President inquired if it would not be satisfactory if such fields were to be maintained by the Panamanian Government itself, the United States to make suitable payment for the service and to provide the necessary expert assistance and supervision. General Van Voorhis replied that in principle he considered this feasible.

(8) The President expressed his interest in one road (P–8 on General Van Voorhis’ map) and said that this road if built and extended would give Panamá a useful and desired highway. He asked General Van Voorhis if we would be willing not only to extend the road but also to make it a concrete highway. The General made note of the matter and said that he would be willing to recommend compliance with the President’s request whenever funds became available.

(9) At one point, the President inquired if we had considered the question of the compensation to be given Panamá for the leases in question. Mr. Dawson replied that we had not. While he made no specific statement, certain of the President’s remarks were of a nature to indicate that he hoped that the compensation would be such as to mean some financial assistance to the country. For instance, he referred in passing to Panamá’s fiscal burdens mentioning in particular [Page 1079] the $2,500,000 loan for the Río Hato–Chorrera highway7 and the service on the foreign debt.8

(10) At the conclusion of the interview, the President said that he felt that the point had been reached where Dr. De Roux and Mr. Dawson could proceed with the discussion of further details.

William Dawson
  1. Transmitted to the Department by the Ambassador in Panama in his despatch No. 750, November 9; received November 13.
  2. The Ambassador in Panama, in his despatch No. 719, October 25, reported that he had re-opened negotiations with the new administration on October 11, 1940, when he handed Dr. Raul de Roux, the Minister for Foreign Affairs, the American draft of a lease and a complete list of tracts needed by the United States Army. Subsequently, the Ambassador spoke to De Roux of the urgency of the matter; on October 18, he requested an audience for General Van Voorhis and himself “with President Arias for the purpose of acquainting him in a general way with the defense problem and of furnishing any information which the President might desire.” In advising Ambassador Dawson on October 19 that the President would receive them “in due course”, the Foreign Minister suggested a preliminary meeting at the Foreign Office so that he might be able to brief President Arias on the matters to be taken up. On October 25, the two American officials had a “satisfactory interview” with De Roux lasting almost 2 hours. (711F.1914/154)
  3. For text of agreement regarding the Río Hato–Chorrera highway, signed at Washington, March 23, 1940, see Department of State Executive Agreement Series No. 449, or 58 Stat. (pt. 2) 1599.
  4. For correspondence on this subject, see pp. 1096 ff.