Foreign Relations of the United States, 1951, The United Nations; The Western Hemisphere, Volume II

719.5/2–2851

Memorandum of Conversation, by the Chargé in Panama (Wise)²

secret

Panamá , February 23, 1951.

Memorandum of Conversation With His Excellency the President of Panama

February 23, 1951

general

A few days ago President Arias³ expressed a desire to see me⁴ informally and without the observance of the usual procedures of protocol. The Foreign Office was aware of this, and had expressed its approval of my making the appointment directly with the Presidencia. Accordingly, I called on the President at 11:00 o’clock this morning.

From reports to the Department already made by the Embassy, it will be seen that my call followed by only a few hours the President’s radio speech to the nation on the evening of February 21⁵ and of the change on February 22 of three members of his Cabinet. Upon greeting the President, I made no reference whatsoever to domestic matters, but did refer to the international aspects of his speech. I stated that the Embassy had been pleased, and I believed that the Department of State would be too, by his public reaffirmation of Panamá’s devotion to the democratic cause and Hemisphere solidarity and by his pledge of personal support and of that of his country to the preservation of the free world. I specifically congratulated him upon his resolve to cooperate with the other American republics in the defense of the hemisphere and with the United States in the defense of the Panama Canal, which he said in reality meant the defense of Panamá. I also congratulated the President on the strong position he had taken against Communism by expressing his unreserved determination to thwart the efforts and influence of the Communists.

communism

The President stated that occasionally he liked to talk directly with the Chief of the United States Mission to Panamá rather than to receive from third parties information of major interest to him. He said that today he had various matters that he wished to discuss, and that one of them was Communism, to which I had just made reference. He recalled that he had said to me on a previous occasion that Panamá would appreciate receiving from the Embassy advance notice of any emergency measures of significance to Panamá which the United States might take at home or in the Canal Zone. He said that unfortunately Panamá had received the impression that the United States at home had declared a state of alert rather than a state of national emergency, and that at any rate no significant state of alert or emergency had to date been declared in the Canal Zone. This, he said, made it practically impossible for him and his Foreign Minister⁶ to work with the Cabinet, the National Assembly, and the public toward the preparation and promulgation of important measures which he very much would like to institute. He added that Panamá would wish to take emergency measures similar to whatever was done in the Canal Zone, but that rather than follow Zone action, it would prefer to take simultaneous and parallel action, providing coordination was possible. As it has turned out, he indicated, Panamá had been unable to take simultaneous measures or even to follow Zone action since to date there had been no emergency declared in the Zone.

In the above respect, the President referred particularly to Communism, and implied that if the Zone had taken public action against Communism, he would have been in a good position to influence the National Assembly toward enacting the Administration’s proposed anti-Communist bill which the Assembly failed to consider before adjournment.

I told the President that I readily understood his position, and that I would make every effort to inform him when possible in advance of any proposed emergency measures in the Canal Zone. I explained that action at the highest levels often had to be taken without advance notice to anyone since all or part of the effectiveness of such action might depend upon it. I also observed that while the President’s declaration of a state of emergency was operative throughout all areas under the jurisdiction of the United States, including the Canal Zone, the primary reason for such a declaration was to confer automatically upon the President powers he ordinarily did not possess and that it did not mean specific and defined measures by the United States would result or were mandatory.

civil defense

The President stated that Panamá was quite anxious to prepare for the defense of its civilian population in case the international situation brought emergency of consequence to this area, and accordingly would appreciate guidance from us.

I explained that a civilian defense organization had been started in the Canal Zone (as I had previously informed the Foreign Minister) and that the Director of Civil Defense in the Canal Zone had made a special trip to Washington in order to obtain advice and instruction. I added that some weeks ago, a committee composed of representatives from the Canal, the Armed Forces, and the Embassy had met to consider civilian defense in this area and agreed to invite Panamá to name a representative to meet regularly as a member of a committee of four. I stated that this had been arranged with the Foreign Office. The President replied that his Government had named Antonio De Reuter, ex-Governor of the Province of Colón, as its civilian defense official representative. The President seemed to be unaware of the extent to which the joint civil defense committee had been organized, but said he would see that De Reuter attended the meetings. He expressed his gratitude to the Embassy for its interest and effectiveness in obtaining Panamanian representation on the civil defense committee and his pleasure over knowing that the committee has been meeting regularly to prepare actively for civilian defense.

censorship

Dr. Arias mentioned the conversation which the Foreign Minister had had with him concerning our desire to negotiate an agreement covering censorship in case of an emergency, and asked if I would inform him of our interest in this regard.

I told the President that the United States Government had been greatly impressed with the cooperation which Panamá had extended to the United States in placing in effect important emergency measures immediately following the attack on Pearl Harbor in December 1941. I stated that the effectiveness of this cooperation came as a result of planning and agreements reached formally or informally prior to Pearl Harbor. I explained that it was my understanding that the Governor⁷ of The Panama Canal and the Foreign Minister⁸ informally had agreed some months before Pearl Harbor as to just what cooperative measures would be taken regarding censorship should such control become necessary. I added that, as he would recall, Ambassador Wilson⁹ had also reached an agreement with the Foreign Minister through an exchange of notes for the arrest and detention of enemy aliens and others. This preplanning and agreement was so productive, I pointed out, that we were interested now in reaching certain understandings with the Government of Panamá about measures to be taken in case they became imperative. I told the President that I had left with the Foreign Minister the draft of a proposed memorandum of understanding on censorship, but that the Foreign Minister had some question about the existing authority of the Administration to enter into such an agreement. I said that the Embassy and the Canal Zone authorities were most anxious to reach now an understanding on censorship in order that on a minute’s notice steps could be taken to impose adequate control. I emphasized that we were not particularly interested in negotiating a formal convention which would require legislative approval or registration with the United Nations, but: rather a more or less informal memorandum of understanding on the subject under Article X of the 1936 Treaty.¹⁰ At this point the President gave the impression that he would consider the United States proposal further with the Foreign Minister.¹¹

maintenance of structures at río hato ¹²

The President remarked that he would appreciate receiving any information which I might be able to obtain concerning United States interest in Río Hato. The Panamanian Government, he said, was having some difficulty in keeping the public from tearing down the last of the structures remaining at Río Hato, and that he was interested in taking steps to prevent further demolition and to preserve as much of Río Hato as possible in case there were to be any need for Río Hato for defense purposes in the future. (The President obviously was endeavoring to obtain a clarification concerning probable requests from the United States for airfields and defense sites. There have appeared notices in the press of rumors that the Coco Solo Naval Base is to be reactivated. (These have since been officially confirmed.) A few days ago the Foreign Minister mentioned the visit of General Eichelberger¹³ to the Canal Zone as a houseguest of General Morris,¹⁴ and stated that he had heard that Eichelberger had come to direct the assignment of many thousands of troops to Panamá. I commented to the Foreign Minister on the occasion of his inquiry that I had been told that Eichelberger was here merely on vacation.) I told the President that I had received no instructions concerning his inquiry, and that furthermore, I had no official reports of any nature on which to base a statement to him. I said, however, that I had heard certain military authorities express their personal opinion that in case of another war steps to be taken for the defense of the Panama Canal would be quite different from those considered necessary during the past war, and that in all likelihood, the number of troops assigned to the Canal Zone would be much less than before. I made no comment as to what might or might not be needed in the way of defense installations in the Republic of Panamá, but confined myself entirely to the statement that I had received no instructions.

screening of naturalization papers

President Arias stated that until now there had been very little which Panamá could do by way of defense measures, but that he did want me to know that all requests of aliens for Panamanian naturalization were being most carefully investigated. He said he wanted to assure the United States of the efforts being made by Panamá to control the activities of aliens. I expressed my appreciation for this statement and the position which his Government had taken.

special export considerations for panamá

Dr. Arias stated that he and the Foreign Minister were very much concerned lest Panamá would not receive special consideration when the United States began a rigid control of exports. He felt that because of the uniqueness and closeness of United States–Panamá relations on the Isthmus, Panamá should be able to import from the United States on exactly the same conditions which are applied to the Canal Zone. It would help greatly, he explained, if Panamá could import many articles for resale to the Canal Zone, and promised that if Panamá were given special export consideration, there would be no exports or resale outside Panamá except to the Canal Zone. He inquired whether I had received any indication of exceptions which might be made to United States export regulations. I told the President that, as he would remember, during the last war the State Department had made every effort to obtain special consideration from the War Production Board, or its equivalent, for Panamá but that the representation for the most part had been most difficult and largely ineffective. I stated that in a crisis critical materials were in such short supply that very few exceptions to export regulations could be justified. I added that I had recently seen in a circular instruction from the Department to our embassies that in case of dire emergency rigid controls without exception would necessarily have to be the policy on exports. I added that I would make his hopes for special consideration known to the State Department, which I was sure would be most sympathetic, but that I wanted to be realistic and would have to state that any special consideration for Panamá would at the best involve a great effort which I feared would be attended for the most part by unsuccessful results. The President said he could appreciate the situation, but would continue to reiterate his request for our most sympathetic understanding of Panamá’s problems, particularly its economic difficulties.

the reorganization of the panama canal

Dr. Arias remarked that he had viewed with considerable concern the plans for the reorganization of the Panama Canal into a government corporation. He said that he did not wish to say much concerning it for in fact he was uninformed and lacked details about what the reorganization involved. He asked, however, that a study be made of the relation of the reorganization to existing treaty relationships, and hoped that in the process of turning the Panama Canal into a government corporation there would be no violations of the 1936 Treaty of Friendship and Cooperation. I told the President that I understood his concern, that it had been mentioned to me by the Foreign Minister, and that the treaty aspects of the proposed reorganization were being studied.

point iv program

I reminded the President of various informal references he had made to me over the past year concerning his interest in knowing more about the possibility of organizing a development corporation in Panamá. The President’s idea had been to form an organization in which the Panamanian Government and some financial institution in the United States could deposit funds to be made available as credits to local agriculture and industry in need.

I told President Arias that I had not forgotten his interest, and in fact had discussed it with Dr. Henry G. Bennett, the Administrator of the Point IV Program, and with Mr. David Rockefeller, Vice President of the Chase National Bank, both of whom, as he knew, had recently visited Panamá. I remarked that Dr. Bennett and Mr. Rockefeller had misgivings concerning the advisibility of trying to organize anything like a development corporation in a country of approximately 800,000 people. I commented on information which I had obtained concerning similar projects in Chile, Paraguay, Venezuela, and Puerto Rico, and stated that I had come to the conclusion after consultation with Dr. Bennett and Mr. Rockefeller that the best approach to Panamá’s present difficulties appeared to be through the Point IV Program. I pointed out that before an effective program of development is to be undertaken, by whatever means, it should be preceded by thorough technical surveys and followed by the assignment for considerable periods of time to Panamá of technicians in various fields of agriculture, industry, and commerce and the training in Panamá and elsewhere of Panamanians to work in these specialties. This, I proposed, could best be obtained through the Point IV Program. I expressed my appreciation of Panamá’s budgetary difficulties in participating to the fullest extent in the technical assistance program, but pointed out that in my opinion, Panamá would ultimately benefit greatly if it were to make a real sacrifice now, even to the point of carefully reviewing and rearranging its budget, if necessary, in order to take full advantage of United States cooperation under Point IV. I added that the completion of surveys and the assignment of technicians to Panamá and the training of Panamanians in technical fields in preparation for the scientific development of the country’s economy should prepare the way for a determination of where sound economic opportunity exists in Panamá and thus finally encourage investment and more flexible lending of money from private or official financial institutions in foreign countries.

The President appeared to see more possibilities than he had previously recognized in the Point IV Program. However, in concluding my remarks on this phase of development in Panamá, I repeated a statement made by Dr. Bennett to the effect that Panamá might well work through Manuel Diez, its representative on the World Bank, to request that institution to send a representative, perhaps Orvis Smith, to Panamá for the purpose of discussing the pros and cons of the formation of a development corporation here.

In concluding my observations regarding the Point IV Program, I reviewed with the President some of the requests presented as probable Point IV projects. We mentioned that the basic agricultural agreement had been signed late in December,¹⁵ and that the proposed health and sanitation agreement would be ready for signature early next week.¹⁶ I took a few minutes to explain to the President that by way of cooperation on health and sanitation, we were prepared at the present time to contribute financially only on a one-to-one ratio, that we could contribute up to but not exceeding $83,000, but that in view of Panamá’s statement that it had only $50,000 for this project, we would contribute a similar amount and that the balance between $83,000 and $50,000, which could have been available, would undoubtedly now be reallocated to use in some other area. The President thanked me for the explanation, said that he understood, and expressed his regret that Panamá could make only $50,000 available for the health and sanitation program.

purchase of food and agricultural products from panamá

I told Dr. Arias that he would be interested in learning that I had just received an encouraging statement from the Army to the effect that it had taken steps to cooperate further and more effectively in obtaining from Washington important exemptions from the Buy American Act,¹⁷ and that this would increase purchases by the Army in Panamá. I commented also on information which I had just received from the Panama Canal concerning its decision to make a thorough survey of all possibilities for purchasing an even greater quantity of agricultural, dairy, and meat products in Panamá. The President appeared gratified and appreciative of this program which had been stimulated and encouraged by the Embassy.

washington conference of foreign ministers ¹⁸

I informed Dr. Arias of the importance which the United States, Government was attaching to the approaching Conference of Foreign Ministers in Washington, and reviewed the proposed agenda with him. I stated that I had been instructed by the Department to invite the full interest of Panamá in this meeting and to obtain from its officials Panamá’s attitude toward the Conference and its plans for it. The President stated that he personally was very much interested and had endeavored to choose an effective representation comprising Foreign Minister Brin, new Minister of Finance and Treasury Herbruger,¹⁹ Minister of Agriculture, Commerce, and Industries Arias,²⁰, Panamanian Delegate to the United Nations Ducan²¹ and Deputy to the National Assembly Zurita. The President expressed strong agreement with the agenda and the objectives of the Conference, and remarked that the delegates were preparing themselves in a serious way for participation in the discussions.

He added that these delegates while in Washington would endeavor to interview United States Government officials, particularly the Secretary of State and his assistants, in an effort to find solutions to many of Panamá’s worrisome problems. He said these matters were being discussed and that he hoped a decision would be reached promptly concerning the suggestions which would be of greatest interest to Panamá at the Foreign Ministers Conference and for talks with United States authorities.

M[urray] M. Wise

2. Transmitted to the Department of State as enclosure 1, under cover of despatch 670, February 28, 1951, not printed (719.5/2–2851).
3. Arnulfo Arias Madrid, President of Panamá.
4. Monnett B. Davis had been Ambassador to Panamá, but he had relinquished his duties there on January 23, 1951, after having been appointed Ambassador to Israel.
5. President Arias’ speech had been reported to the Department in despatch 653, from Panamá, February 23, 1951, not printed (719.00/2–2351).
6. Carlos N. Brin.
7. Brig. Gen. Glen E. Edgerton.
8. Raúl de Roux.
9. Edwin C. Wilson.
10. Reference is to the general treaty of friendship and cooperation between the United States and Panamá, signed at Washington, March 2, 1936; for text, see Department of State Treaty Series (TS) No. 945, or 53 Stat. (pt. 3) 1807.
11. A memorandum of understanding concerning the application of censorship controls during a state of emergency was signed at Panamá on July 11, 1951. A copy of the memorandum was transmitted to the Department of State under cover of despatch 31, dated July 12, 1951, not printed (611.199/7–1251).
12. A former defense site utilized by the United States which was located in the province of Coclé.
13. Lt. Gen. Robert Lawrence Eichelberger (ret.).
14. Lt. Gen. William Henry Harrison Morris, Jr., Commander in Chief, Caribbean.
15. Reference is to the general agreement for technical cooperation between the United States and Panamá signed at Panamá on December 30, 1950. The agreement was transmitted to the Department of State under cover of despatch 495, December 30, 1950, not printed (819.00–TA/12–3050). For text, see United States Treaties and Other International Agreements (UST), vol. 1, p. 900, or Department of State Treaties and Other International Acts Series (TIAS) No. 2167.
16. This agreement, which provided for the joint development of a health and sanitation project in Panamá, was signed at Panamá on February 26, 1951; for text, see 2 UST 655, or TIAS No. 2220. For a press release concerning the agreement, see Department of State Bulletin, March 26, 1951, p. 502.
17. Legislation requiring United States Government agencies, when procuring supplies for domestic use, to purchase only domestic materials and supplies. For text of the basic law, see Title III of the Appropriations Act of March 3, 1933, in 47 Stat. 1520.
18. Reference is to the Fourth Meeting of Consultation of Ministers of Foreign Affairs of American States, held at Washington, March 26–April 7, 1951. For documentation on the conference, see pp. 925 ff.
19. Rodolfo F. Herbruger.
20. Ricardo Arias Espinosa.
21. Jeptha B. Duncan.