Memorandum of Conversation, by the Chief of the Special Projects Division (Clattenburg)

Ambassador Hines68 requested a conference which was held in his office in order to discuss his despatches regarding the desire of the Panamanian Government that we collect consular fees on its behalf. Ambassador Hines stated that the value of the representation of Panama by the United States for strategic reasons clearly exceeded the intrinsic cost of any services which can be performed for Panama and that it was important for the United States to keep on the friendliest [Page 1148] possible footing with Panama. He stated that the present refusal of the United States Government to collect consular fees for Panama caused concern to the Panamanian Government because of the loss of fees which the Panamanians were apparently unable to collect from the interested persons. He went on to point out that Panama would increase in importance with the opening of the national airport next year, and that the increase of trade and travel through Panama would make the Panamanians even more conscious of the loss of revenue arising from our policy. In the circumstances he wondered whether some other government such as Great Britain or Sweden might not be more than anxious to take over the representation of Panamanian interests on Panama’s terms.

Mr. Clattenburg pointed out that the United States Government now performs services of one kind or another for some twenty-six to thirty foreign governments, that this function will be most extensive for the Philippine Government and that it is expecting too much to ask the American Foreign Service to familiarize itself with and apply the tariffs and fees, laws and regulations, of so many foreign governments. He pointed out that there are alternative means which the Panamanian Government can apply to insure the collection of its fees, that the Panamanians stood to gain by the new practice if they could devise an effective collection procedure since they would no longer have to pay back fifty percent of all fees collected to the American officers concerned and that the action of the Department in collecting fees for Panama during the period 1903 to 1942 had obviously been based on incomplete information as to the status of the procedure under Panamanian law and lack of knowledge of Panamanian theory that officers performing services for Panama are Panamanian officers.

At the request of the Ambassador, Mr. Clattenburg promised to provide the Embassy with suggestions as to effective collection procedures to be followed by the Panamanian Government and also with a presentation copy for the Panamanian Foreign Office of the book on the representation of foreign interests, written by Mr. Franklin in SPD,69 as soon as it is published.

  1. The Ambassador departed for Washington on September 3 and returned to Panama on September 18, 1946.
  2. William M. Franklin of the Special Projects Division.