411. Telegram From the Department of State to the Embassy in Panama 1

49. You are instructed, provided results your efforts required by Embtel 422 satisfactory, to deliver following letter at Foreign Office from President Kennedy to President Chiari:3

[Page 850]

“Dear Mr. President:

I am pleased to have the opportunity to exchange views with you again on some of the matters which have been the subject of our previous correspondence and our meeting in San Jose which I recall with such pleasure. Ambassador Farland’s special consultations in Washington following the San Jose meetings were helpful and I am pleased at the progress which has been made in the resolution of some of the outstanding questions which have been before us.

I know that you continue to share a concern about the threat of Cuban Communist subversion of the Isthmian countries and others throughout the Hemisphere and I noted with gratification the work which was carried on by the representatives of the various governments who met in Managua in April.4 While certain progress has been made as a result of the follow-up meetings held during April and May in the six countries of the Isthmus, I believe that there are many steps which remain to be taken and I certainly hope that you will be continuing your leadership in this important area.

I recognize the special needs of Panama for assistance in the development of those parts of its economy which have not benefited directly from the operation of the Canal. While Panama’s foreign exchange receipts for goods and services sold to the Zone have been sizable, reaching an estimated $84 million in 1962, we are aware that most benefits from the Canal have accrued to that part of the Panamanian economy located close to the Canal.

Your Government has made substantial effort in drawing up a long-range Development Program, and we look forward to discussing it with your representatives after it has been evaluated by the panel established by the Organization of American States. In the interim, as we have already indicated to your Director of Plans, Mr. David Samudio, during his visit to Washington in early May, we are prepared to consider substantial amounts of loan assistance on liberal terms for a number of sound projects. During Mr. Samudio’s visit, as you know, the various projects listed in the enclosure to your letter were discussed in some detail, in an effort on our part to provide guidelines on the type of projects that would be eligible for United States financing.

I can understand your desire to draw a conceptual distinction between our cooperative efforts to advance Panama’s well being under the Alliance for Progress, and any special measures we undertake to adjust our relations in matters concerning the Canal Zone. I would expect, however, that assistance for the purposes described above could [Page 851] be of great and specific benefit to the peoples of Panama, and contribute to the enhancement of friendship between our two countries. Compensation more directly related to our special relationship in connection with the Canal has also been a continuing matter of concern to me. Though the details will have to be worked out, I believe that we may be able, for this year, to provide some special assistance. I have asked Ambassador Farland to discuss with you in detail what we can do.

We were glad to receive your Minister of Foreign Affairs, Dr. Galileo Solis, when he came on your personal instructions to Washington in late April. He left a memorandum with Secretary of State Rusk to which was attached a list of 8 major and 5 subsidiary points which are being or might be discussed by our Special Representatives.5 I issued instructions that the work on these points, on the United States side, be accelerated with a view to having possible solutions ready by the end of July. The United States Representatives have been discussing these matters with yours and I am confident that constructive progress can be made on most of the major points and several of the subsidiary points. Foreign Minister Solis indicated to Secretary Rusk that it was then your wish to recess the work of the Special Representatives in July. I have since received, in this respect, your letter of July 96 requesting an earlier dissolution and as you know I have agreed to do so by means of a joint communique.7 Following such action I would expect that our diplomatic representatives would maintain the forward momentum in finding solutions to the remaining problems which confront us.

With cordial good wishes,

Sincerely,

John F. Kennedy 8
  1. Source: Department of State, Presidential Correspondence: Lot 66 D 476. Secret; Priority; Limit Distribution. Drafted and approved by Collins; cleared by Martin, Springsteen, Kent, and Dungan at the White House.
  2. Not found.
  3. Farland was to deliver this letter if he determined through discussions with Chiari that a plan to provide approximately $3 million in special assistance funds to Panama would be acceptable. Telegram 63 from Panama, July 25, reported that Chiari’s reaction was positive, but a handwritten note on telegram 63 states that Farland had been told by telephone not to deliver the letter. (Department of State, Central Files, AID (US) 9 PAN) Telegram 58 to Panama, July 31, transmitted revisions in the letter. (Ibid.) Farland reported in telegram 91, August 14, that he had delivered the letter after further discussion with Chiari and consultation with the Department by telephone. (Ibid.)
  4. Reference is to a meeting held in Managua April 3-4 to draw up agreed measures against subversion; see Document 165.
  5. Translations of the memorandum and the list, both dated April 24, are in Department of State, Central Files, POL PAN-US.
  6. Transmitted in telegram 17 from Panama City, July 9. (Ibid.)
  7. For text of a joint communiqué issued by the U.S. and Panamanian Governments on July 23 announcing the conclusion of the discussions and some of their results, see Department of State Bulletin, August 12, 1963, pp. 246-247.
  8. Printed from an unsigned copy.