711F.1914/729: Telegram

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

411. Your 356, August 2, 11 p.m.40 The idea of a management contract has not been abandoned, paragraph 4 of the draft instrument for transfer of water and sewerage system transmitted with my despatch no. 4349 of July 15th40 was prepared on the basis that that document terminates the responsibility of the United States so far as existing obligations are concerned. Agreement on a management contract, if the Government of Panama desires one will constitute a new obligation which will be defined in the management contract itself and authority for the assumption of which by the United States would be conveyed by the proposed Executive Order.

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With reference to the final paragraph of my despatch no. 4349, Governor Edgerton and I submitted to the Foreign Minister on July 28th the first draft instrument of transfer covering the transfer of the water and sewerage systems in the cities of Panamá and Colon only. At our next conference with the Foreign Minister, which is subject to his call, we propose to submit a draft management contract.

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