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

No. 932

Subject: Assembly Passes on Nationalization of Commerce Law.

Sir: I have the honor to transmit clippings from the English and Spanish sections of the Panamá Star and Herald of February 23, 1946, which lists the qualifications under which retail commerce may be exercised in the Republic of Panama. These are as follows:

Native Panamanians.
Naturalized Panamanians, five years after obtaining their final papers.
Naturalized Panamanians who, on the date the constitution takes effect, are married to a Panamanian or have Panamanian children even though they have not completed five years of naturalization.
Any individual who is already engaged in trade when the constitution is promulgated.
Citizens of nations which maintain on the Isthmus activities in which Panamanians can obtain permanent employment provided that such citizens reside under Panamanian jurisdiction.
Corporations which are formed by Panamanians or by foreigners allowed to engage in commerce individually under the foregoing provisions.
Corporations which are engaged in commerce when the constitution becomes effective, regardless of their membership.
Corporations engaged in the sale of products manufactured by them in the country, regardless of their membership.

It will be noted that the change from the original proposal, reported in the Embassy’s despatch No. 2919 dated October 9, 1945,58 is that in paragraph 5 it is stipulated that “citizens of nations which maintain on the Isthmus activities in which Panamanians can obtain permanent employment provided that such citizens reside under Panamanian jurisdiction”. No requirement as to International [Page 1144] Treaty is included and of course the only ones who can qualify under this ruling are American citizens on account of The Panama Canal installations.

Undoubtedly this constitution will be unsatisfactory to other nations which cannot qualify under the clause referring to the employment of Panamanians. The Embassy wishes to emphasize that in all its conversations with Panamanian Government officials and businessmen during the period of discussion of the new constitution it has repeatedly and consistently maintained the position that it is the policy of the United States to encourage equal opportunities for all nations in matters of international trade and has promoted the idea that the Government of Panamá should eliminate trade barriers and restrictions in accordance with the principles outlined in the Chapultepec Conference59 and at the United Nations Conference in San Francisco.60 It has made every attempt to discourage discrimination as between Panamanians and all foreign nationals in the practice of internal commerce in Panamá.

The exclusion of Americans from all restrictions to the operation of retail business is undoubtedly the result of the Embassy’s insistence that the same treatment be accorded to American citizens in Panamá as that accorded Panamanian citizens in the United States. The Embassy believes that the exclusion of all other foreign nationals from retail trade in Panamá may not prove to be in the best interests of the Republic itself, but I do not feel that we can do any more than has been done, that is, to discourage all discriminations.61

The action of the Constituent Assembly on the question of wholesale trade in the Republic is being reported in a separate despatch.62

Respectfully yours,

Frank T. Hines
  1. Not printed.
  2. For the resolutions of the Conference, see Pan American Union, Final Act of the Inter-American Conference on Problems of War and Peace, Mexico City, February–March, 1945, (Washington, 1945).
  3. See Department of State Treaty Series No. 993, or 59 Stat. (pt. 2) 1031.
  4. For documentation on Panamanian charges of discriminatory labor practices, see pp. 40 ff., and pp. 1149 ff.
  5. Infra.