819.00/12–1844: Airgram

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

A–1126. On night of December 13 the Panamanian Foreign Minister left for Rochester by plane, after concluding a 3-day stay at [Page 1439] Blair House. While his visit was regarded as private and unofficial, it provided an opportunity to discuss various subjects of mutual interest to the two Governments. In accordance with the Foreign Minister’s request, this Government has not issued a press release regarding the conversations, but Foreign Minister issued one on the eve of his departure.

In regard to labor the Foreign Minister complained in a friendly way of unequal treatment and pay to Panamanians performing same work as Americans; unequal opportunity to fill skilled positions; use of gold and silver terminology; and the recent raise in the dividing line between gold and silver employees to 50 cents per hour from 48 cents per hour. In reply, Department made no commitments, but stated its desire as always to take remedial measures wherever justifiable.32

The Foreign Minister urged desirability of a commercial airport outside Canal Zone. He was told that priorities for construction materials could not now be obtained because they could not be justified ground of military necessity.

The Foreign Minister referred to Panama’s constitutional inability to continue Aviation Board established under agreement of 1929,33 as well as Panama’s desire to arrange for new international board; The Department did not concede Panama’s right unilaterally to terminate the 1929 agreement, but stated that the United States is disposed to negotiate with a view to replacing agreement of 1929 if a mutually satisfactory solution can be developed subject to necessary safeguards as to Panamanian sovereignty and requirements for protecting Canal, and that perhaps a new Board could be set up.

The Foreign Minister was informed that Panamanian cement project had been approved but that priorities would have to be sought later. He was told that due to importance of slum clearance project to war effort this Government would give Panama special facilities to purchase materials; that his request for unspecified materials to construct a tuberculosis hospital would be considered sympathetically; and that the National Housing Agency would make available to Panama an architect for the housing project, as Panama had requested.

The Foreign Minister did not deny the legal merits of the El En-canto claims34 but urged that Panama was poor and asked Department to justify the sum of $470,000 requested. This was done. In [Page 1440] reply to his inquiry whether Department would consider a counterproposal for a smaller sum, he was informed that claimants would hardly be willing to accept less than above-mentioned amount based on approximately $3 a hectare, when many of them had actually paid $12.50 per hectare for their land. He said Panama claimed the sum (understood to be $172,000) held by Panama Canal in a surplus water account, and wished that this be set off against amount of El Encanto claims. Department declared its unwillingness to link the two legally but expressed a disposition to consider the two matters simultaneously, and requested a memorandum from Panama on its claims.

The Foreign Minister expressed his Government’s desire to secure Patilla Point35 from the Army for a hotel site. He was informed that it seemed appropriate to discuss this when the general question of defense sites was reviewed after the war, and when materials were available. The Army has courteously placed a plane at the Foreign Minister’s disposal for his return to Panama. The whole visit went off in great cordiality. The Foreign Minister seemed particularly appreciative of the Secretary’s dinner and his remarks at the Pan American Union luncheon.

Lewis did not mention the Aviation Board or El Encanto claims in his statement to the press and suggested that these matters, being of political import, should not be mentioned in Panama for the time being.

Stettinius
  1. For correspondence on United States concern with labor problems in the Canal Zone, see pp. 1440 ff.
  2. Foreign Relations, 1929, vol. iii, p. 728.
  3. The Encanto tract of land, owned by American citizens, was confiscated through court and legislative action by the Panamanian Government. In the eyes of the American Government, the procedure employed in the case constituted a “denial of justice” to the American owners.
  4. A defense site.