Memorandum for the Files, by Mr. Fred G. Heins of the Division of Central America and Panama Affairs

The United States Army and the Canal Zone authorities were anxious to see the Panama National Airport completed, in order to relieve the congested traffic at Albrook Field. Ambassador Hines and Lieutenant General Crittenberger, Commanding General, Caribbean Defense Command, considered the new airport important to the defense of the Panama Canal. The project was financed by the Government of Panama through the sale of bonds. Estimates for the cost of the project varied from $5,000,000 to $12,000,000. In March 1947 it was estimated that the total cost would not exceed $7,000,000.

In June 1945 the Panamanian Government had awarded a contract to the American contractors, F. H. McGraw and Co., for the architectural and engineering design as well as the superintending of the entire project. By December Mr. Harry K. Fisher had been employed by the Government as a technical adviser and consultant. Both of these contracts, however, were terminated long before the completion of the project. Mr. Carl A. Posey, airport engineer, formerly with CAA, was also a consultant during the early stages of construction, and in [Page 698] December, 1946 after the termination of the McGraw’s [and] Fisher’s contracts, was employed by Panama as Supervising and Managing Engineer in charge of construction of the National Airport.

Upon urgent and insistent requests from the Panamanian Government, the PRA did most of the construction work at Panama’s expense. The highway to the airport was built by PEA under a contract with the Panamanian Government. The clearing, grading, excavation, drainage, paving, etc. on the airport itself were done under an agreement between PRA and Panama. The original agreement was dated May 1, 1946. The agreement provided that, (1) Panama would rent from PRA, with an option to buy, the necessary equipment; (2) Panama would make available for subsequent use on the Inter-American Highway any equipment thus purchased; and (3) PRA would lend to Panama on a reimbursable basis the necessary personnel for the construction of the airport which would be subject to the direction and approval of the Ministry of Public Works. (The Department went along with this arrangement although it clearly indicated that it was in principle opposed to United States Government agencies operating abroad in competition with private enterprises.) The Panamanian Government and our Embassy were convinced that the project would be unreasonably delayed unless PRA did the work, because no contractor in Panama had available the necessary equipment and personnel for such a project. By April 1947 the rentals paid by Panama to PRA nearly equalled the prices quoted on the equipment being used, and Panama then paid the difference and took over the equipment. Although the permanent Administration Building for the airport was not yet completed on June 1, 1947, a temporary building for that purpose had been erected and the airport was formally opened to international traffic on that day.

F[red] G. H[eins]