711F.1914/583

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

Dear Ed: I have read with interest your letter of October 9 regarding the Panamanian attititude toward the proceedings in the Subcommittee of the Senate Committee of Foreign Relations concerning the Panamanian legislation. I feel it important to give you a summary of the situation as it appears to us and of the dangers inherent in a failure of the Panamanian authorities and of the Panamanian press to realize this situation. I have sent you a telegram on this subject today.51

The private claimants to whom you refer have been represented at the hearings by Mr. Roy C. Hackley, an energetic attorney from San Francisco, whom, I believe, you know; by former Senator King of Utah and by a Mr. Walker, a lawyer in Senator King’s law firm.

Mr. Hackley has attacked the proposed legislation unsoundly but vigorously. Not only has he stated that it is contrary to the interests of the United States Government, he has also gone at some lengths into the alleged interests of the East Indian and Chinese tenants on the railroad lots who, he says, are being thrown to the wolves by our proposed action. He has also endeavored to make out that the reversionary rights in these lots are in the Colombian Government52 and that the Panamanian Government had no right to transfer them to us in 1903. He has stated that the $2,500,000 lent [Page 617] by the Export-Import Bank to Panama for the construction of the Rio Hato Highway was in fact squandered by high Panamanian officials and not devoted to highway purposes at all. All of these contentions and many, many others with which I will not bore you, but which you will be able to read from the record have, I hope, been disproved by the Department to the satisfaction of Senator Gillette, the Chairman of the Subcommittee.

Mr. Hackley was of course perfectly within his rights as an American citizen in attacking this legislation, and the Subcommittee could not in practice have refused to hear him. However, when he endeavored to connect the private claims in which he is interested with the legislation he found the Subcommittee less than sympathetic.

I fully appreciate the fine cooperation which we have been steadily receiving from the Government of Panama. I also feel strongly, as I know that you do, that our treatment of Panama under the circumstances has been extremely enlightened. On the other hand, the Panamanian record regarding certain private claims which have been duly entertained by the Department of State and which at one time were submitted to a Joint Claims Commission, only to be rejected for jurisdictional reasons, has been far from good.

Please assure our Panamanian friends that the Department’s point of view regarding private claims is, so far as we can judge at the moment, the view of the Senate Subcommittee. Please also use your best efforts in explaining our Congressional practices to your Panamanian friends and indicate to them discreetly but firmly the serious possibilities that are inherent in ill-considered or hasty judgments or statements on their part. The clipping which you sent me from the Panamá American of October 8 links the legislation now before the Subcommittee with the Defense Sites Agreement in precisely the manner in which, in our opinion, they are not connected.

Sincerely yours,

Sumner Welles
  1. Telegram No. 830, October 13, 5 p.m., not printed.
  2. This was based on the theory that Panama did not succeed in 1903 to the reversionary rights of Colombia which grew out of the terms of contracts of 1850 and 1867 between the Panama Railroad Company and New Granada whereby the latter conceded a 99-year lease to the former in return for the extension of the railroad.