711.192/75a: Telegram
The Acting Secretary of State to the Minister in Panama (South)
49. You will deliver the following to President Porras:
“Your Excellency’s telegram to the President dated the 9th instant regarding the treaty negotiations now going on in Washington has been received and carefully considered and special study has been given to your desire that the article of the treaty granting commercial privileges to Panama be made in perpetuity and not for a period of fifteen years. I beg to recall to you the statement made by the Secretary of State in his note of October 15, 1923,14 to the Panaman Minister in Washington that it was manifest that before entering upon the vast extent of the enterprise undertaken by this Government in providing for the construction, operation and protection of the Panama Canal this Government had to be sure that it obtained adequate rights in the Zone and that the protection of the Canal in the future was appropriately secured. For this purpose the Canal Treaty of 1903 was made. To meet certain administrative exigencies during the period of the construction of the Canal, the administrative arrangement known as the Taft Agreement was effected. This arrangement, however, was of a temporary nature in order to serve more conveniently the situation then existing and it was expressly declared that in no wise did it affect the rights of either party to the Treaty of 1903. That Treaty forms and must continue to form the basis of the relations between the United States and Panama and provides the safeguards for the future which were deemed by this Government to be of controlling importance in making the decision to construct the Canal.
[Page 526]Thus while it was possible to grant certain concessions to Panama in the Taft Agreement, through the non-exercise of certain of our rights under the Treaty of 1903 because that Agreement was a temporary one and was expressly stated not to be a delimitation, definition, restriction or restrictive construction of the rights of either party under the Treaty, it is manifestly impossible for the United States to make such concessions in perpetuity when its eventual needs in the future cannot now clearly be foreseen.
Your Excellency asks that the policy outlined by President Roosevelt in 1904 be given expression in the new treaty. You doubtless refer to the statement in a letter from President Roosevelt to Mr. Taft, dated October 19, 1904, in which he stated ‘we do not intend in the least to establish an independent colony in the center of the State of Panama or to exercise governmental functions broader than is necessary to enable us to build, maintain and operate the Canal, in accordance with the rights given us by the Treaty.’ In making this statement President Roosevelt undoubtedly gave expression to the policy of this Government, a policy to which it has closely adhered, but the statement will not admit of such a broad construction as to imply any intention on President Roosevelt’s part to limit the rights definitely accorded to this Government by the Treaty of 1903.
The policy outlined by President Roosevelt has, as stated above, been closely adhered to but the American Government must preserve its complete freedom of action for the future to avail itself should necessity therefor arise of the rights, power and authority granted to the United States by the Treaty of 1903. This Government is perfectly willing to grant to the Panaman Government privileges of the character described in the proposed treaty for as long a period as can be safely foreseen and for this reason these privileges have been given for a term of fifteen years with a provision that they will be continued thereafter for periods of five years unless denounced one year in advance of the termination of any such period. This is in accordance with the traditional policy of the United States Government to deal not only fairly and justly but generously with the Republic of Panama and I hope you will agree with me that the interests of Panama are fully protected and provided for in the proposed treaty.
The above question and the question of the transfer of jurisdiction over a part of the city of Colon are distinct and separate. In this connection I desire to point out that title to all the land comprised in the area in question is now vested in the Panama Railway Company and at the expiration of that Company’s concession the reversionary rights to those lands are held by the United States by virtue of the provisions of the Treaty of 1903. It is eminently reasonable that the United States should desire jurisdiction, especially police jurisdiction, over the areas used in connection with the Canal operation and inhabited by officers and employees of this Government in the operation of the Canal. This will avoid possibilities of friction.
Your Excellency further states that each and every one of the concessions made by Panama in the draft of the treaty now under consideration are perpetual. I desire to point out to Your Excellency that a number of concessions granted by the United States to [Page 527] Panama in the treaty under consideration are likewise perpetual as, for instance, the appraisement of additional private lands acquired by the United States in the future to be based upon their value at the time they are acquired rather than at their value prior to the conclusion of the Treaty of 1903; the agreement of the United States to construct roads to the value of approximately $2,000,000 in the territory of Panama; to supply free of charge to Panama the necessary space for the establishment of custom houses in Canal Zone ports; free trade established between Panama and the Zone; concession regarding transportation of alcoholic liquors across the Zone; the making of Panaman currency legal tender in the Zone, et cetera. The only privileges granted to Panama for a term of years rather than in perpetuity are those in regard to certain commercial privileges and the reasons why they cannot be given in perpetuity are explained above.
I am confident that Your Excellency, upon further consideration of the matter, will perceive the very generous spirit in which the negotiations have been undertaken by the United States and will fully appreciate the desire and determination of this Government to deal justly and liberally with the Panaman Government in all matters. Joseph C. Grew, Acting Secretary of State.”