711.1928/478: Telegram
The Chargé in Panama (Flexer) to the Secretary of State
[Received 7:20 p.m.]
173. Referring to Department’s telegram No. 65, October 25, noon, and Legation’s telegram No. 170, Dec. 16, 2 p.m. At second meeting held this morning note transmitted by Department’s instruction No. 65, September 4,16 was read to delegates.
[Page 909]Agreement was reached that the question of launch deliveries will be disposed of by the addition of a paragraph to the note assuring merchants residing in Panama facilities of Panama Canal launch service under equal conditions with commissaries.
The question of commissary sales is still under discussion. The Panamanian Delegates are disposed to find the treaty section acceptable as drafted, with the modification suggested in the last paragraph of the Legation’s telegram No. 170, when taken in conjunction with the note, with the additional paragraph above suggested.
The Canal Zone delegates, however, find inconsistency between paragraph 1, proposing continuance of sales of “sea stores” and paragraph 3, proposing voluntary withdrawal under certain conditions. Moreover, they fear that constant friction and press attack will inevitably result in the administrative application of the general policy stated in the latter, and seek to avoid such difficulties by simple definite commitment that such sales to vessels will not be made at prices lower than retail commissary prices to employees. Such prices are said to afford ample margin of profit to private wholesalers.
I am sensitive of their viewpoint in view of the political capital made of relations with the Canal Zone. Since “articles of other classes” represent a dwindling percentage of commissary sales to vessels, I believe it desirable to limit the field of possible contention to this category. It is accordingly suggested that I be authorized to press for agreement by insertion in paragraph 1 after “its voyage,” of the equivalent of “will be sold at prices not lower than the retail prices at which like articles are sold to employees of the Panama Canal; articles” the remainder of the paragraph to be unchanged. All references to “sea stores” to be eliminated from paragraph 3.
Referring to Department’s telegram No. 83, Dec. 17, the surcharge of 25% on “articles of other classes” affects less than 7% of commissary sales to vessels. Next meeting Dec. 23.
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