819.51/1164: Telegram

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

220. My telegram 21843 and despatch 805 of December 9. The Panamanian Secretary of Finance told Train in confidence yesterday that at a Cabinet meeting on Tuesday it had been decided to transfer to [Page 1101] Washington further conversations concerning the debt readjustment plan. The Secretary said that the new Panamanian Ambassador would handle the matter and that in all probability he, the Secretary, would proceed also to Washington sooner or later to assist the Ambassador. In his conversation with Train the Secretary referred to the interest of the Department of State in the matter as expressed to the President by me. He referred also to the possibility of linking up a debt settlement with compensation to be received by Panama from the United States in connection with other pending questions. The Secretary pointed out that in any case any changes in the plan would have to be submitted to the National Assembly which will not convene again until January. He said that a further extension of the plan would be granted.

Train has sent by air mail a full account of his interview to his principals who will no doubt communicate with the Department.

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