Foreign Relations of the United States: Diplomatic Papers, 1942, The American Republics, Volume VI

711F.1914/482

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

No. 821

Washington, May 25, 1942.

Sir: Reference is made to the Department’s instruction No. 737 of April 29, 1942 and to the Embassy’s despatch no. 2160 of May 9,⁴⁰ regarding the advisability of proposing to the Panamanian authorities some type of management contract under which the water and sewerage systems in Colón and Panamá, when ownership is transferred to the Panamanian Government, would be operated by the Panama Canal Department.

There seems to be a definite consensus among the interested departments of this Government that the intimate association of the residents of the Canal Zone with the cities of Panamá and Colón makes it advisable and necessary that this Government continue to bear the responsibility for the operation of the water and sewerage systems, when the transfer of ownership to Panama is approved by the Congress. The Department is, therefore, of the opinion that you should discuss this matter with the appropriate Canal Zone authorities without further delay and request that they, in close consultation with you, formulate a concise proposal for a management contract under the provisions of which the Panama Canal Department would continue to operate the water and sewerage systems once the title to them has been placed in the hands of the Panamanian authorities. Such a contract should be arranged so as not to prejudice in any way the pertinent provisions of the agreement reached in Washington on May 18, 1942, a copy of which was transmitted to you in the Department’s instruction No. 807, dated May 21, 1942,⁴¹ and should definitely provide for increased participation of Panamanian personnel in sanitation activities in those cities as set forth in the exchange of notes accompanying the General Treaty of March 2, 1936, which in turn refers to the earlier proposal of October 1931.

The Department will appreciate being kept informed of any progress which is made on the drafting of such a contract and requests that before any proposal is made to the Panamanian authorities, the approval of the Department be obtained.⁴²

Very truly yours,

For the Secretary of State:

Sumner Welles

40. Neither printed.
41. Not printed.
42. The transfer of the water and sewer systems to Panama and the arranging of a management contract which left the administration of this public works in the hands of the Zone authorities, were not effected until December 1945.