Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

168. Memorandum of a Conversation, Department of State, Washington, November 28, 1956¹

Washington, November 28, 1956

SUBJECT

• Courtesy Call of Panamanian Foreign Minister Boyd

PARTICIPANTS

• Mr. Aquilino Boyd, Foreign Minister of Panama
• Dr. Eduardo Ritter, Panamanian Ambassador to the United Nations for the 11th General Assembly
• Mr. Juan Méndez Mérida, Chargé d’Affaires of Panamanian Embassy
• Mr. Roy R. Rubottom, Jr., Acting Asst. Secy. for Inter-American Affairs
• Mr. Jack D. Neal, Director, Middle American Affairs
• Mr. William E. Price, Desk Officer for Panama

1. Foreign Minister Boyd on behalf of President de la Guardia transmitted the cordial best wishes of the President to President Eisenhower and to Mr. Rubottom. He spoke of the Meeting of the Presidents in Panama during July and of the spontaneous ovation accorded President Eisenhower by the Panamanian people and the tremendous impression the President made. Mr. Rubottom thanked Mr. Boyd for the messages conveyed and commented that President Eisenhower had personally told him how much he had enjoyed the meeting at Panama, the hospitality that he had received at the hands of the Panamanians, and that he would like to return.

2. Mr. Boyd stated there were several matters pending between our two Governments which he would like to discuss: implementation of Items 1 and 2 of the Memorandum of Understandings Reached of the Treaty of 1955, and his Government’s interest in having appropriate legislation passed by Congress as soon as possible during its next session. He also mentioned Panama’s interest in having the funds appropriated for construction of the bridge over the Pacific end of the Canal. Mr. Rubottom explained that an Omnibus Bill² was presently being considered by the Bureau of the Budget which contained the legislation for implementing Items 1 and 2 of the Memorandum of Understandings Reached and also that a bill requesting appropriation of the funds to construct the bridge was also in the Bureau of the Budget. He added that both bills are receiving the recommendation and full support of the Department of State. Mr. Boyd said he appreciated this support and would inform President de la Guardia accordingly.

3. In connection with Item 1 of the Memorandum of Understandings Reached Mr. Boyd said it was his Government’s desire to study the wage scale legislation so suggestions could be made prior to enactment. Mr. Rubottom discouraged this by explaining the Omnibus Bill was in the Bureau of the Budget and since so many interested entities were working on the proposed measures it would be practically impossible to accede to his request. Moreover, to interrupt the clearing process at this stage would delay passage of the bill. Mr. Boyd stated he knew of the proposed 5 cents per hour wage increase and wanted to know when it would go into effect. Mr. Price stated that it was the intention of the Panama Canal Company to place the wage increase into effect on December 30, 1956 which would materially cushion the loss of commissary privileges before the date of actual loss and prove of benefit to the Panamanian Government in explaining its own support of the action. Mr. Boyd asked to be informed through our Embassy in Panama prior to the effective date so that both he and President de la Guardia would know exactly what was to take place. Mr. Rubottom agreed to this.

4. Minister Boyd referred to Item 2 of the Memorandum of Understandings Reached concerning the transfer of certain properties which he stated were deteriorating through non-use and vandalism. Mr. Price explained that the Panama Canal Company and the Department of State were currently considering this problem of leasing such properties to the Government of Panama on a nominal fee basis prior to enactment of the Omnibus Bill by Congress but pointed out that due to the temporary nature of such an interim agreement with Panama it was believed the Government of Panama might be reluctant to invest funds to renovate or improve the property; that in view of the time between now and possible enactment by Congress—a period of some 3 to 4 months—it was thought it would hardly be worthwhile to make the temporary arrangement. Mr. Boyd agreed that this was so.

5. Mr. Boyd next mentioned conference freight rate differentials as they adversely affected the economy of Panama. He asked Mr. Rubottom if it would be possible for the Department of State to intervene on behalf of Panama in order to obtain relief for payment of these higher freight rates. Mr. Rubottom explained this was a matter in which he felt the Department of State could not properly interest itself though he sympathized with Panama’s predicament and lamented the adverse effect it had on Panama’s economy. He suggested, however, that the Panamanian Government itself deal directly with the maritime companies who were members of the particular freight rate conference which seemingly controlled Panama’s ocean freight rates to determine what could be done. Mr. Boyd seemed to accept this suggestion.

Mr. Boyd noted that the S/S Panama, a freight and passenger vessel of the Panama Canal Company, was being offered for sale and wondered if it would be possible for his Government to purchase the vessel, probably having in mind the thought that having ownership of such a vessel the Panamanian Government would be in a bargaining position in entering into discussions with the members of the conference in its effort to lower the freight rates. To this suggestion Mr. Price pointed out that he had understood from the Washington representative of the Panama Canal Company that the value of the vessel was somewhat in excess of $3 million and further that ownership could be transferred only to American interests, but he explained that these latter two points could be investigated to determine the validity of the statement. At the mention of the vessel’s value Mr. Boyd threw up his hands and indicated that such a purchase price was far beyond the capacity of the Panamanian Government but jokingly suggested that the Government be allowed to purchase it on credit. No reply was made to this latter suggestion.

6. Mr. Boyd then spoke of the problem of nautical inspectors. He explained the pressure for nautical inspectors came from a very small group—some 50 or more members of the Panamanian Seamen’s Union who have been very vocal in every session of the National Assembly for the past three years or so. He stated he felt that if both Governments cooperated and acted in good faith there should be no impediment to an agreement. He suggested a modus operandi which would grant the Panamanian Government permission to station nautical inspectors in the Canal Zone without prejudice to the rights and interests of the United States Government and seemed most anxious to reach an agreement. Mr. Rubottom informed him the Department of State, in attempting to solve the problem, had to consider the jurisdictional aspect of the United States Government in the Canal Zone and due protection must be given that right. He added, however, that the problem was presently under study in the Department of State and that he believed we were close to resolving the points at issue. He stated that when the basic terms for agreement were developed they would be sent through our Embassy in Panama for transmission to him.

7. Mr. Rubottom expressed a hope for a more cooperative attitude on the part of the Panamanian Government under the administration of President de la Guardia and Mr. Boyd as Foreign Minister in dealing with problems that arise from time to time between our two Governments and resolving them in an atmosphere of friendship and good faith. He spoke of the two-way nature of such relations and that the United States Government for its part would always consider all problems that arise in its traditional spirit of friendship and good will toward Panama. Mr. Boyd thanked Mr. Rubottom for this observation and stated the United States Government could always count on the Government of Panama as being a staunch friend.

8. Mr. Rubottom then stated this Government’s continued need to obtain two sites in Panama for installation of radar equipment and pointed out that over a year has passed since this Government originally made the request citing the second paragraph of Article II of the 1936 Treaty as being applicable as a basis for the request. Mr. Boyd stated he was sorry about the delay and the attitude his Government had taken, which he blamed on the Foreign Relations Council, in considering the request but at this point felt that since his Government could not back down from the stand taken in which it rejected our claim that the provisions of the second paragraph of Article II of the Treaty of 1936 applied; that agreement could be reached very quickly on the basis of negotiation of a new treaty which would have to be submitted to the National Assembly of Panama for ratification. He further stated that in accordance with Panamanian law that when transfer of land takes place under such circumstances that the National Assembly must consider the treaty for ratification.

9. Several times during the course of the visit, Mr. Boyd made the remark he wanted to take something back to Panama or he must show something to his Government. Mr. Rubottom assured him he was sympathetic to his wishes and understood his position but explained that the democratic process for handling pending legislation could neither be hurried nor controlled. The problems pending in the Department for decision, however, could and would be expedited.

10. The meeting terminated at this point. Upon departure from Mr. Rubottom’s office Mr. Boyd handed Mr. Price a memorandum listing the problems pending between our two countries.³

1. Source: Department of State, Central Files, 611.19/11–2855. Confidential. Drafted by Price.
2. Reference is to H.R. 6709, introduced on March 1, 1957.
3. Not found in Department of State files.