711F.1914/450: Telegram

The Ambassador in Panama (Wilson) to the Secretary of State

362. For the Under Secretary, Welles. The President and the Minister for Foreign Affairs have both inquired on various occasions recently when our offer on rental for the private lands of the defense sites can be expected. As you know this is the only point which remains unsettled in the negotiations.

The Minister for Foreign Affairs has been pressing me almost daily of late on this matter and has today told me off the record that a most embarrassing situation is being created by our failure to make a satisfactory proposal on this point. He says that the subject comes up at every Cabinet meeting and that it has become so embarrassing to him that he has now proposed that he be relieved of the negotiations on this point and that they be transferred to the Panamanian Ambassador in Washington.

As I have reported on many occasions failure to reach agreement and to announce the benefits which Panama will receive places the Panamanian Government in an exceedingly awkward situation and is steadily weakening its position. The Republic of Panama is today under virtual military occupation by the forces of the United States. Incidents involving members of our armed forces are constantly taking place and the general Panamanian attitude towards the United States, which has hitherto been most friendly is beginning to change and an atmosphere of criticism and complaints is being created.

The Panamanian Government and people read of the large sums of money which the United States is making over to Brazil, Peru, Colombia, et cetera for services to be received in the future. The Panamanian people are aware that for well over a year Panama has been turning over defense bases throughout the Republic to the United States armed forces and that constant requests are being made by the United States for special favors, consideration and cooperation, and that the Panamanian Government is granting all these requests without stint.

It is my considered judgment that unless we can very shortly make a generous proposal to Panama on this rental question, thereby bringing the negotiations to a prompt and satisfactory conclusion, we shall be faced with a very unsatisfactory situation in Panama and one which will be increasingly prejudicial to our national defense efforts in this area.

Wilson