The Department of State to the Panamanian Embassy
In July 194031 the Ambassador of the United States to Panama informed the appropriate Panamanian authorities that, in accordance with the Treaty of 1936 between the two countries, which recognizes their joint and vital interest in the effective protection of the Canal, the Government of the United States desired to reach an agreement with the Republic of Panama for the utilization for the defense of the Canal of a number of defense sites in the territory [Page 446] of the Republic. Exchanges of views have continued to take place regarding the conditions under which the sites would be utilized by the United States but final conclusions have not yet been reached. It is gratifying, however, to note that the Panamanian Government is turning over the sites as needed.
During February 1941 the Ambassador of Panama left with the President of the United States a document listing a number of points in the relations between Panama and the United States with respect to which suggestions as to positive action by the United States were made. These points have been discussed with the Ambassador by the Under Secretary of State and by other officers of the Department.32
In view of the disposition on the part of the Government of Panama to carry out wholeheartedly its obligations as a partner in the defense of the Canal, the Executive branch of the Government of the United States, in lieu of other compensation for the defense sites, is willing to initiate the necessary steps for the drawing up of an agreement between the two Governments along the following lines:
- The Government of the United States will turn over to the
Government of the Republic of Panama the water and sewerage
installations in the cities of Panamá and Colón and will make
water available to the cities of Panamá and Colón at the Canal
Zone boundary at a reasonable charge, provided that the Republic
of Panama will
- continue amortization and interest payments on the unamortized portion of the cost of the water and sewerage installations until these are completely paid for as provided in Article VII of the Treaty of 1903;33 and
- maintain the present sanitary standards in the operation of the water and sewerage installations, and if it appears desirable, employ experts in these fields which are of vital concern to the Government of the United States in view of the necessity for effective sanitation of the neighboring Canal Zone.
- The Government of the United States will transfer to the Government of the Republic of Panama all of its rights and those of the Panama Railroad Company to the lands now in the possession of the said company in the cities of Panamá and Colón which are not currently or prospectively needed for the operation, maintenance, sanitation and protection of the Panama Canal.
- The Government of the United States, subject to the working out of a satisfactory plan, will undertake the removal of the station of the Panama Railroad in Panama City in such a way as to facilitate Panamanian plans for civic improvement.
The Government of the United States is confident that, concurrently with the reaching of the above-mentioned agreement, it will be possible to come to an agreement with the Government of the Republic of Panama setting forth and describing the defense sites required under Article[s] II and X of the Treaty of 1936 and the conditions under which they are being made available. Such matters as length of tenure and the jurisdiction to be exercised by the United States are of particular interest.