819.852/6

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

No. 810

Sir: I have the honor to refer to the Department’s telegram No. 186 of December 7, 1940, directing me to advise the Panamanian Government of our attitude as respects the shipment of iron and steel scrap to Japan and the transfer of vessels to Japanese interests and to inquire whether Panamá would be disposed to cooperate with a view to preventing the transfer to Japan of vessels under Panamanian registry.

I discussed the matter orally and confidentially with the Panamanian Secretary of Foreign Relations this morning along the lines of the Department’s telegram.

Dr. De Roux said that Panamá was always desirous of cooperating with the United States in so far as this could be done without detriment to its sovereignty. He said that, while he was not prepared to commit his Government immediately, his impression was that in the present case our request would receive sympathetic consideration, particularly since the object pursued was to lessen the danger of an eventual attack directed against the Western Hemisphere. He pointed out, however, that Panamá’s shipping laws are incomplete in many respects and that it may well be that they afford the Government no effective means of preventing the cancellation or abandonment of Panamanian registry and the transfer of vessels to foreign interests, particularly in those numerous cases where vessels are not owned by Panamanians and do not visit Panamanian ports. Dr. De Roux said that, before discussing the matter further with me, he would have to inform himself in the premises.

As the Department is aware, the extreme liberality of Panamanian shipping laws and requirements has been taken advantage of by many foreign firms and individuals to place under Panamanian registry a considerable number of vessels which are Panamanian only in name. Even before my conversation with Dr. De Roux, it had occurred to me that in view of this situation the Panamanian Government would perhaps not be in a position to exercise any real control over transfers of vessels to Japanese or other foreign interests. In this connection, it has also occurred to me that, inasmuch as American consular officers are charged with the representation of Panamanian interests at a number [Page 1091] of posts, the Department might wish to communicate with such officers regarding the matter and might instruct them to report to it (for the information of the Panamanian Government and any action practicable) any cases in which the transfer to Japan of Panamanian vessels may be contemplated.

Respectfully yours,

William Dawson