Memorandum by the Director of the Office of American Republic Affairs (Daniels) to the Secretary of State


The attached letter of February 71 from Secretary Forrestal requests that no affirmative action be taken at this time to negotiate with the Republic of Panama for defense sites. Secretary Royall in February 1948 stated orally to General Marshall that failure of the Panamanian Assembly in December 1947 to ratify the Defense Sites Agreement had been a “blessing in disguise”. Secretary Forrestal’s letter is significant in putting his position in writing, even though it does hold the door open for a future change of position.

Recent reports from our Embassy at Panama relative to a commercial aviation agreement now under negotiation indicate that the domestic political situation there is such as to place in doubt the approval even of agreements of genuine practical importance to Panama. In this atmosphere we may expect that politicians whose principal aim is the furtherance of their own ambitions may combine with the small but noisy communist group to try to defeat the Diaz administration. They are capable of doing this regardless of the effect on the welfare of their own country or on relationships with the United States.

[Page 713]

Conclusion: Our Ambassador Davis has made progress in developing public relations to the point that the Panamanian people as a whole may realize the mistakes into which false prophets are leading them. But the time has not yet arrived when proposed agreements with Panama can be considered there on their merits rather than exploited for local political purposes. It is believed that this background will be of value to the higher officers of the Department in the event that there should be local press inquiries or hints by Panamanians regarding new negotiations.2

  1. Ante, p. 710.
  2. Instruction No. 25 from Washington, February 28, 1949, read in part: “The Embassy is advised that the Department concurs with the view that the present state of relations between the United States and Panamá warrants the undertaking of a coordinated constructive program to combat deliberate misrepresentation of the facts and encroachment on the vital rights of the United States. However, such a program should not be orientated specifically toward the reopening of the defense sites negotiations but rather toward a general clearing up of the misapprehensions which render difficult a solution of other pending problems and an improvement in normal relations.” (711F.1914/2–349)