711F.1914/736
Memorandum of Conversation, by the Ambassador in Panama (Wilson)38
Governor Edgerton and I called today by appointment on the Minister for Foreign Affairs and handed him for his consideration the attached draft of instrument of transfer to Panamá of the water and sewerage systems in the cities of Panamá and Colón and agreement respecting incidental and related matters (this draft is copied from the fourth draft enclosed with Governor Edgerton’s letter to me of July 7, 1943).39
We explained at the outset that this draft was prepared on the basis of transferring only the systems in the cities of Panamá and Colón, and retention by the United States of the New Cristobal systems. In this connection I referred to the various conferences I had had with the President and the Foreign Minister at which I had explained the reasons which made this appear advisable, and to conversations which Governor Edgerton also had had with the President on this subject. Dr. Fábrega said that he recalled that we had discussed alternative ways of handling this matter, one being a transfer to Panamá of the New Cristobal systems as well but with provision in the transfer instrument for continued operation and maintenance by the United States, the United States to assume all cost of such operation and maintenance and Panamá agreeing not to charge the United States for the water consumed in that area. He said that he preferred an arrangement along this line rather than that proposed in our draft, which provided for continued ownership by the United States of the [Page 661] New Cristobal systems. He said, however, that he would study the draft and would lay it before the Panamanian Government for consideration, advising us as soon as possible of the Government’s views in the matter.
With reference to paragraph 4 of the draft, Dr. Fábrega pointed out that the United States presumably would continue not only to maintain and repair the pavements in New Cristobal, but also to provide for garbage collection and street cleaning. We agreed to this—the omission of reference to these matters had taken place inadvertently in preparing the draft.
As regards the disposition of the surplus funds (paragraph 5 of the draft), we had some discussion. We went over familiar ground discussed in past conferences, Dr. Fábrega stating that it was his belief that the phraseology employed in the exchange of notes of May 18, 1943 [1942], had protected the right of the Panamanian Government to receive the surplus funds, and I pointing out the view of the State Department that the phraseology of the exchange of notes definitely relieved the Government of the United States of making any refund to Panamá. Dr. Fábrega said that he would appreciate having in writing a statement of the views of the Department of State so that such views could be considered by the Panamanian Government. I said that I would be glad to put these views in writing and send them to him.
It was agreed that Dr. Fábrega would let us know when he was in a position to discuss these questions further.
- Copy transmitted to the Department by the Ambassador in Panama in his despatch No. 4473, August 11; received August 18.↩
- A copy of Governor Edgerton’s letter of July 7 and its enclosures (memorandum of Acting General Counsel, dated June 16, 1943, and two drafts of instruments of transfer) were transmitted to the Department by the Ambassador in Panama in his despatch No. 4349 of July 15; none printed.↩