The Ambassador in Panama (Davis) to the Secretary of State
Sir: I have the honor to refer to earlier correspondence regarding the possibility of reopening the question of defense sites because of the international situation, and to recommend that, unless the military authorities consider it essential to national defense to establish additional military areas in the Republic of Panamá in the near future, the Department release in Washington or through this Embassy a statement to the effect that the United States has no immediate intention of reopening negotiations for defense sites in Panamanian territory. The statement might take the form of an amplification of that made upon my arrival last May, a copy of which is enclosed1 for convenient reference. The timing of the release of this statement should, I believe, be left to my discretion and should occur whenever the Panamanian Government officially or publicly broaches the subject.
Ever since the rejection by the National Assembly last December 22 of the defense sites agreement negotiated with the United States, this question has been treated in Panamá as a political issue. Following the adverse action by the Assembly, the opposition to the Jimenez Administration claimed that the United States Government would not be disposed to consider negotiating another agreement with “the weak Administration in power.” It will be recalled that Arnulfo Arias, after his official candidacy was announced, capitalized on “his willingness to cooperate with the United States and reopen negotiations for defense sites immediately after he became President.” More recently, following the official announcement of the results of the elections, the incoming Díaz Administration also has been stressing its desire to resume forthwith negotiations for a satisfactory settlement of the defense matter, with “compensations”, of course. President Díaz has himself so indicated to me personally and to a member of my staff. Probably because Panamá’s economy is rapidly deteriorating, the belief is growing that it is now necessary for Panamá’s economic salvation and the maintenance of cordial relations with the United States to negotiate an agreement as soon as possible after October 1.
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If our Government does not intend to renew negotiations for new defense sites at this time, it would seem desirable to say so publicly and now, in order to disabuse the Government of Panamá and the Panamanian people of any false hopes they may entertain in that [Page 677] direction. While such hopes persist they will continue to impede any negotiations our Government may initiate on other matters.
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Needless to say, such a declaration should be so phrased as not to be mistaken as an indication of displeasure on the part of the United States Government or of its desire to apply pressure upon the Panamanian Government.