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

No. 846

Sir: I have the honor to refer to the Department’s telegram No. 196 of December 28, 1940, concerning the leasing of lands needed for defense purposes, and also to my telephone conversation of December 2821 with Mr. Bonsai22 and my letter to him of the same date23 enclosing a summary of the remarks which President Arias desired to make regarding the matter in his address of January 2.

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On the evening of December 28, I met the Secretary of Foreign Relations at dinner, at which time the Embassy had received only the first section of the Department’s telegram. I told Dr. De Roux that from my telephone conversation with Mr. Bonsai it was apparent that there existed a divergence of views which would probably make it desirable to modify the draft of the President’s remarks, that a long telegraphic instruction was on the way, that in the first section thereof I was instructed to discuss the matter personally with President Arias, and that consequently I should be grateful if he would arrange an audience, if practicable for Monday morning (December 30).

The Foreign Office advised me early this morning that the President would receive me at 10:30 a.m. In the meantime, I had seen General Van Voorhis and had shown him the text of the Department’s telegram.

I enclose a memorandum24 covering in detail my conversation of this morning with the President, at which Dr. De Roux was present. Both gentlemen were, of course, disappointed at the Department’s reply. However, their attitude was friendly and in the course of a long conversation not a word was said indicating any feeling of hostility towards the United States. On the contrary they both expressed the desire of the Panamanian Government to cooperate with the United States and to cement the friendship uniting the two peoples. The President referred in cordial terms to President Roosevelt’s radio address of last evening.25

As stated in the concluding paragraph of my memorandum, the President said that the Government would consider the Department’s aide-mémoire and reply to it. He said that he had hoped that I would plead Panamá’s case with the Department. I assured him that I would report faithfully our conversation and the Panamanian point of view. I added that I did not want to raise any false hopes and that the Department’s aide-mémoire appeared quite definite (terminante).

Our conversation revolved largely around the question of compensation, the President and Dr. De Roux putting up a strong plea for financial assistance of some sort in return for the leases. I have repeatedly pointed out in my despatches that the Panamanian Government has from the outset hoped for generous compensation and that this would probably prove an important factor in determining how smoothly and rapidly we attain our objectives. In the light of my conversation of this morning, I believe this still to be the case. I do not mean by this that we cannot obtain the leases without making some financial concession. I believe that we can and that the Panamanian Government, however reluctantly, is prepared to yield to the inevitable.

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On the other hand, I feel that, if we can satisfy in some modest measure Panamá’s aspirations, the further negotiations should proceed smoothly and rapidly and the general effect on Panamanian opinion and on our future relations with Panama would be excellent. I believe that President Arias himself would be glad to negotiate the leases as rapidly as possible but that he desires also to be in a position to tell his people that he has obtained something substantial in return. Of late, there have been many indications of a more cordial attitude on the part of the administration towards the United States than appeared at the outset to be the case. In my relations with the President and his Foreign Secretary I sense a distinctly more friendly atmosphere and a greater readiness to adjust satisfactorily the many little matters which crop up almost daily. In spite of all that has been said regarding the President’s alleged pro-totalitarian tendencies, I know of no act since he has been in office which would seem to substantiate such charges; and on the other hand the British Minister has told me recently of two satisfactory and cordial interviews which he has had with the President.

The present despatch is being written hurriedly for tomorrow’s air mail pouch. I shall endeavor to submit by the following mail further comments on the situation together with suggestions for the Department’s consideration.

Respectfully yours,

William Dawson
  1. Memorandum of conversation not printed.
  2. Philip W. Bonsai, Acting Chief of the Division of the American Republics.
  3. Not printed.
  4. Not printed.
  5. Department of State Bulletin, January 4, 1941, p. 3.