711F.1914/162: Telegram

The Secretary of State to the Ambassador in Panama (Dawson)

196. Your 231, December 2319 and previous. You are requested, after informing General Van Voorhis, to discuss with President Arias personally the question of the lease of additional lands for defense purposes [Page 1086] along the following lines, leaving an aide-mémoire20 in the following terms indicating the attitude of this Government:

“1) The arrangement between the United States and Great Britain involving United States over-age destroyers and the lease of bases in British possessions in the Western Hemisphere was based upon considerations of general hemispheric defense, of which Panama is a beneficiary. The only cash payments which may be involved are for the fair market value of any privately owned land within the areas leased. It may be pointed out again that these bases are available for the use of all of the American republics for purposes of hemispheric defense, as has been stated by this Government.

2) While the Department continues its study of the December 3 note of the Panamanian Government, it is desired to recall the pertinent provisions of the General Treaty between Panama and the United States. The last paragraph of Article II states that the two Governments recognize their ‘joint obligation to insure the effective protection of the Canal, in which the two countries are jointly and vitally interested.’

It is also the considered view of the Department that the present situation justifies the application of Article X of the General Treaty which provides that:

‘In case of an international conflagration or the existence or [of] any threat of aggression which would endanger the security of the Republic of Panama or the neutrality or security of the Panama Canal, the Governments of the United States of America and the Republic of Panama will take such measures of prevention and defense as they may consider necessary for the protection of their common interests. Any measures, in safeguarding such interests, which it shall appear essential to one Government to take, and which may affect the territory under the jurisdiction of the other Government, will be the subject of consultation between the two Governments.’

3) Any payments which may be made by the United States to Panama in connection with the contemplated leases will be based solely upon the fair value of the land and buildings in question.

4) With respect to jurisdiction over persons in the leased areas, the United States will, of course, exercise complete and exclusive jurisdiction over its own personnel. It is felt that a detailed statement regarding jurisdiction over other persons can await the drafting of the leases.

5) The period of the leases should be for so long as the tracts may be required for the purposes of defending the neutrality or security of the Canal in which both Governments have signified their vital interest. The Panamanian contention that the leases be renewed with each new Panamanian administration is totally incompatible with this requirement. However, the Government of the United States has already signified its acceptance of the principle that when the lands are no longer required, they will be relinquished by the United States and their utilization will revert to the Republic of Panama.”

In bringing the position of the Department to the attention of the Panamanian authorities, you should reiterate the advantages which [Page 1087] have accrued and will accrue to the Panamanian economy from the expenditures which have been made and the further expenditures contemplated by the United States Government. As the Panamanian Government is aware, the United States Government is now engaged in constructing an additional set of locks and other major works in the Canal Zone.

The United States has contributed directly to the construction cost of the Río Hato Highway and has financed the remainder thereof. Surveys are being made for the trans-Isthmian Highway, the whole cost of which will be borne by the United States Government. In this connection, you are authorized to inform the Panamanian authorities that the officials of the Canal Zone are prepared, upon the successful completion of the lease arrangements now under discussion, to submit to the Congress a request for additional funds for the construction of a 20-foot highway between Madden Dam and the City of Panama, which would be available for public traffic, as well as for defense purposes. This highway, known as Access Road P–8, would be constructed by the United States in large part within the territory of the Republic of Panama with the understanding that the maintenance of those portions of the highway within the Republic will be a responsibility of that Government in consideration of the use of the highway.

The Government of the United States is convinced that the economy and trade of the Panamanian people will benefit to a considerable extent, both during the time of construction and during the years to follow from the expenditures made by this Government in constructing these highways. The direct and indirect economic benefits to Panama deriving from the expenditures involved in the defense installations are also of considerable significance.

  1. Not printed; it reported the desire of President Arias to be informed of the American position on the main points in the Panamanian note of December 3 so that in his address of January 2, 1941, when the new constitution became effective, he could generally say: In return for leasing the defense sites, Panama would receive adequate compensation; American jurisdiction would cover only military personnel; the tracts would be leased for short terms and revert to Panama when no longer needed.
  2. For Spanish text of aide-mémoire as presented on December 30, 1940, by the American Embassy to the Panamanian Foreign Office, see Panama, Memoria … de 1943, p. 166.