819.51/315: Telegram
The Minister in Panama (Price) to the Secretary of State
[Received 11:05 p.m.]
116. American Fiscal Agent requests me to send following:
International Banking Corporation signed with the Secretary of the Treasury June 15th, agreement whereby Government balances with that bank of June 30th, next, would remain with it as follows: $2,000,000 as a fixed deposit for six months and approximately $1,000,000 subject to check as needed. The agreement has not as yet received approval of the President which is necessary to complete it and seems Secretary of the Treasury now requests of the bank a letter interpreting the agreement to the effect that after June 30th, next, funds on deposit will be subject to the sole order of the Secretary of the Treasury. It is a condition of the deposits at present that their withdrawal can be effected only on joint signature of Secretary of the Treasury and Fiscal Agent and Law 30 of 1918, article 6, provides that Fiscal Agent shall legalize by his countersignature all warrants of Secretary of the Treasury. I consider essential that all funds of the Treasury should continue to be subject to the countersignature of the Fiscal Agent and most desirable that the balances with the International Banking Corporation which include some $2,700,000 of road funds already obligated by contract remain with that bank until needed. If transferred to Banco Nacional they would be subject to any interpretation of law or contract that the Executive might make, and further would be subject to loan or investment by the directors of the bank without control by the Fiscal Agent. It is probable that Executive will insist upon transferring these funds to the Banco Nacional on June 30th, unless there is accepted the condition that they will remain subject to the sole order of the Secretary of the Treasury. I respectfully and earnestly recommend the Department intervene to prevent this. Ruan.
. . . . . . . . . . . . . .