The Secretary of the Army (Royall) to the Secretary of State


Dear Mr. Secretary: Your letter, dated July 9, 1948, to the Secretary of National Defense, in which you recommend that an early [Page 696] decision be reached regarding the maintenance of the Trans-Isthmian Highway in Panama, has been referred to me with the request that I correspond directly with you on this matter.

The continued existence of the Trans-Isthmian Highway, maintained in a first class condition, is militarily important to the United States. The Department of the Army shares the view that the Republic of Panama lacks financial capability and technical ability to maintain this highway in proper condition. Accordingly, and since the United States must, in any event, bear a part of the cost of maintenance, it is considered preferable that the United States undertake continued maintenance of the entire Trans-Isthmian Highway, subject to certain stipulations indicated below.

I am, therefore, in agreement with the recommendation of Ambassador Davis, that the General Relations Agreement be renegotiated and recommend that negotiations be initiated to this end with the Republic of Panama as early as practicable. It is to be noted that this action has also been proposed by General Fleming of the Federal Works Agency as the most satisfactory solution of United States road maintenance problems in Panama.

It is recommended that the following stipulations be incorporated in the new agreement:

That the United States undertake, at its expense, long-term maintenance of the Trans-Isthmian Highway in the Republic of Panama as well as in the Canal Zone.
That in return therefor, the Republic of Panama provide maintenance, without cost to the United States, of all other roads lying within the Republic of Panama which are, or may be, used by the armed forces of the United States.
That the right to use all roads within the Republic of Panama be assured to the armed forces of the United States.
That each government will maintain in a usable condition, roads which are its maintenance responsibility, but that upon failure to do so, the other government will have the right to make essential repairs, charging the cost thereof to the government failing to perform the maintenance in question.

Upon the adoption of a new agreement, the Commanding General, United States Army, Caribbean, will be designated as representative of United States armed forces in road maintenance matters in Panama, and the Federal Works Agency will be requested to supervise the maintenance of the Trans-Isthmian Highway. The Commanding General, United States Army, Caribbean, has been notified of this letter and asked to be prepared to assist in negotiations if called upon.

In the interim, the Federal Works Agency is being requested to continue the present reduced maintenance of this highway pending the completion of negotiations.

Sincerely yours,

Kenneth C. Royall