The Acting Secretary of State to the Panamanian Ambassador (Vallarino)

Excellency: I have the honor to refer to your Excellency’s note of September 21, 1945,66 regarding the desire of the Government of Panama to have minted in the United States the sum of one million silver balboas (B/1,000,000), in coin of the following denominations.

B/500,000 in B/1.00 pieces
 225,000 in 0.50 pieces
 175,000 in 0.25 pieces
 100,000 in 0.10 pieces
[Page 1147]

In the pertinent decree issued by your Government September 19, 1943, the contemplated issue is motivated by the consideration that an investigation carried out by the Comptroller General’s office has shown that there is a scarcity of Panamanian silver money and that a new issue is therefore necessary.

Having regard to the known scarcity of Panamanian silver currency in circulation, the Government of the United States will agree to the contemplated issue in the amount of one million balboas on the understanding that this does not prejudice or modify the conditions and limitations attaching to the issuance of silver currency under the Monetary Agreement of 1904, as modified, although it may be in derogation therefrom to an extent which cannot be determined with accuracy since it is not known what volume of Panamanian silver currency may be in circulation in Panama on completion of the new issue. It is understood that should it at anytime appear that the amount of Panamanian silver currency in circulation is in excess of $1,300,000 and that the parity of the coinage with the dollar may be impaired or other inconvenience is thereby caused in the fiscal operations of the Panama Canal, the Government of Panama agrees, when requested by the United States, to reduce the outstanding amount of its silver currency by the amount by which it may be found to be excessive.

Upon receipt of a note confirming this understanding on behalf of the Government of Panama67 the Department of State will be pleased to arrange for the Embassy to consult directly with the appropriate officials of the Department of the Treasury with a view to working out the details for having the coinage undertaken at the Philadelphia Mint.

Accept [etc.]

Dean Acheson
  1. Not printed.
  2. A note of June 17, 1946, from the Panamanian Ambassador indicated that the Panamanian Government agreed to this understanding (819.515/6–1946).