819.7962/11–2946: Telegram

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


612. Depts A–699 July 812 and previous. As in case May 1 agreement between PRA and Panama for preparatory work on airport including clearing, grubbing, grading, etc., Dept does not, on principle, favor current suggested agreement (Embs desp 2943 Nov 29 and urtel 750 Dec 1213) for paving runways on grounds U.S. Govt agencies should not operate abroad in suggested capacity due to possible criticism for alleged competition with local enterprises.

However, in view urgency of beginning paving,14 in interest assisting Panama complete airport as soon as possible and with Emb’s assurances that no local contractor is prepared to handle work, Dept interposes no objection PRA effecting agreement with Panama provided: (1) Agreement is identical in principle to May 1 arrangement under which supervision is under Ministry of Public Works with necessary equipment rented from PRA and necessary technical personnel lent by PRA on reimbursable basis and (2) provided written assurances are received from Panamanian Govt to effect it assumes all responsibility and saves U. S. Govt harmless with respect to any complaints which may be made by local contractors.

Dept has not seen copy proposed agreement and requests Emb make sure arrangements meet foregoing conditions.15

  1. Not printed.
  2. Neither printed.
  3. In telegram 750, December 12, 1946, 11 a.m., the Ambassador urged that agreement be reached speedily with the Public Roads Administration to avoid a loss of a year in completing the airport (819.7962/12–1246).
  4. In telegram 754, December 17, 1946, 1 p.m., the Ambassador indicated that the Panamanian Government agreed to the conditions (819.7962/12–1746).