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

No. 2702

Sir: Reference is made to your despatch no. 4369 of July 20, 194341 in which it is reported that the Government of Panama has raised the question, pursuant to the agreement reached by the two governments on item 10 of the Washington exchange of notes, dated May 18, 1942, of moving the Panamá railroad station and yards to a new site.

In its original memorandum, dated February 18, 1941,42 covering the twelve points in the relations between the two countries with respect to which positive action by the United States was requested, the Panamanian Government set forth its desires regarding the railroad station and yards in the following phraseology:

“That the Railroad move the station to another place within the territory under the jurisdiction of the United States and that the yard and other sites occupied by it remain free and pass to Panama so that communication between the residential districts and the center of the city may be improved.”

In a subsequent memorandum of June 23, 1941,43 following informal conversations in Washington between the Under Secretary of State and the Panamanian Minister of Foreign Affairs,44 the Panamanian Government developed its views on item 10 to the following extent:

“The Government of Panama sees with satisfaction the promise made by the United States Government to change the railroad station of the city of Panama, so as to facilitate the plans for urban improvement. It considers it advisable, however, that the Government of the United States undertake to change the said station to a spot within the Canal Zone, or under Panamanian jurisdiction, as the Republic of Panama may decide at the time. When the change of the railroad station is made, the present station, the patio used now by the Railroad Company, and the various buildings adjacent to the said patio and belonging to the said Company will pass to the possession of the Government of Panama.”

[Page 663]

In the final exchange of communications with the Panamanian Government on the twelve points this Government’s decision with respect to the transfer to a new site of the railroad terminal facilities in Panama City read as follows:

“The Government of the United States agrees to comply with the wishes of the Republic of Panama regarding the removal from their present site of the terminal facilities of the Panama railroad in Panamá including the station, yards and other appurtenances. This agreement, however, is subject to the making available without cost to the Government of the United States by the Republic of Panama of a new site deemed suitable for the purpose by the two Governments.”

From the foregoing it would appear that while this Government is definitely committed to remove from their present site the terminal facilities of the Panama railroad, subject to the making available by the Panamanian Government of a new site deemed suitable for the railroad station and yards, there was no agreement concerning the time when this project would be undertaken. However, as you are aware, and as Governor Edgerton has rightly pointed out to the Panamanian authorities, this Government has considered the removal of the railroad terminal as an undertaking for the future and as a matter not in any way connected with the transfer to Panama under the provisions of recent legislation of lands not needed for railroad purposes. This Department feels that the Panamanian Foreign Minister has no grounds whatsoever for believing that the deed for the transfer of the railroad lots, now being prepared pursuant to the provisions of United States Public Law No. 48 of May 3, 1943,45 should also include the lands now used in Panama City for the railroad terminal. In this connection it should be pointed out that in the Department’s description and maps of the lots which are to be transferred to Panama (see exchange of notes, dated May 18, 1942) there was no indication that a transfer of the lands in Panama City currently being used for railroad purposes, was contemplated. In fact, the documents show that the lots covered by the railroad station and yards were marked “Property necessary for railroad business.”

From the beginning of negotiations on the item discussed above the War Department pointed out that the necessity for handling large amounts of incoming freight consisting of defense materials makes it highly inadvisable to interrupt its transportation program by changing during the present emergency the location of the railroad station and yards. Furthermore, until a prudent interval has elapsed after the opening of the Trans-Isthmian and Inter-American Highways, [Page 664] it would seem almost impossible for the Canal Zone authorities to determine the exact requirements under normal peace-time conditions of the Panama Railroad Company for its terminal facilities on the Pacific side of the Isthmus. Then too, there is always the possibility that development in air transportation following the end of the present war may considerably affect the passenger and freight business of the Railroad.

In view of these circumstances this Department is definitely of the opinion that there is no possibility during the present emergency of complying with the Panamanian request for the change in location of the terminal facilities of the Panama Railroad Company in Panama City. For your own information the Department considers that it is highly ill-advised of the Panamanian authorities to raise this issue again at this time. Accordingly, at an early opportunity you are requested to discuss the Department’s attitude on this question with the Governor of The Panama Canal and thereafter, in his company, you are requested to make this Government’s position unmistakably clear to the appropriate officials of the Panamanian Government.

Very truly yours,

For the Secretary of State;
Sumner Welles
  1. Not printed.
  2. Foreign Relations, 1941, vol. vii, p. 430.
  3. Ibid., p. 453.
  4. Raul de Roux.
  5. This act provided Congressional authority for the Department of State to put into effect three of the twelve points in the agreement of May 18, 1942.