819.154/70: Telegram

The Minister in Panama (Price) to the Secretary of State

11. Dated January 18th and published in the Official Gazette dated February 2nd but just issued appears a decree signed by Panaman President and Secretary of Public Works regulating law 7 [8?] of 1920 known as “Good Roads Law”. By said decree the Secretary of Hacienda is directed to turn over to the Good Roads Commission the funds at present available for road construction and those accruing in the future, the Commission being charged with the application, management and accounting of said funds. The funds when transferred are ordered to be deposited immediately in the Banco Nacional to be the special depository of the Commission [Page 603] and thereafter will be withdrawn by check jointly signed by the President and treasurer of the Commission the latter official as yet not having been designated. Fiscal Agent had no information as to the decree until reading same in the Official Gazette. Upon bringing it to the attention of the Secretary of the Treasury he was informed that the Secretary had had no previous information about it. Fiscal Agent is of the opinion, in which I concur, that said provisions of the decree which remove completely from the control of the Secretary of the Treasury and the Fiscal Agent disbursement of the funds destined to construction, improvement and maintenance of roads are contrary to the provisions of fiscal code which delegate to Secretary of the Treasury, the management of the public funds and their disbursement and to articles 6 and 7 of Law 30 of 19183 which provide that Fiscal Agent shall intervene in all accounts and claims proceeding from the various Secretaries of the Government and dependencies and shall certify to Secretary of the Treasury, balances justly payable thereon. Balance in the road fund January 31st amounted to $2,300,000. Fiscal Agent is not inclined to comply with this decree unless the Department of State so directs. He requests instructions and urges that his relief be arranged by the Department at the earliest possible [moment?], declaring that the action of the Executive Power in decreeing important measures of this nature without consulting him has rendered his position here absolutely untenable. Further provisions of the decree requiring that in awarding contracts none may be let to a bidding company that has not registered in Panama its articles of incorporation, etc., and that when recourse is had to arbitration and disagreement results between the two arbitrators representing the contracting parties the umpire selected must be a Panaman. Might this not have the effect of discriminating adversely against American companies intending to bid on February 18th? Notice[s] of these conditions were not included in the published specifications. I recommend authority to make vigorous protest and await instructions.

Price