#47. Establishment of United States Ports, Tariffs Custom-Houses, and Post Offices in the Canal Zone, June 24, 1904* To the WAR DEPARTMENT Washington, June 24, 1904 CHAIRMAN OF THE ISTHMIAN CANAL COMMISSION: By direction of the President it is ordered: SECTION 1. The territory of the Canal Zone of the Isthmus of Panama is hereby declared open to the commerce of all friendly nations. All articles, goods and wares, not included in the prohibited list, entering at the established customs ports, will be admitted upon payment of such customs duties and other charges as are in force at the time and place of their importation. SECTION 2. For the purposes of customs administration in said Canal Zone, there are hereby established two collection districts as follows: First: The District of Ancon, comprising the southern half of said Canal Zone more particularly described as follows: The port of entry in said district shall be Ancon. Second: The District of Crystobal, comprising the northern half of said Canal Zone more particularly described as follows: The port of entry in said district shall be Crystobal. SECTION 3. There is hereby created and shall be maintained in the government of the Canal Zone a subdivision of the executive branch to be known as the Customs Service: the general duties, powers and jurisdiction of the Customs Service shall be to administer the customs laws and tariff regulations in force in said Zone. The Governor of the Canal Zone shall be the head of the Customs Service. There shall be a Collector of Customs for each Collection District, who shall receive an annual salary of two thousand five hundred dollars in gold, payable in monthly installments. It shall be the duty of the Collector to collect all revenues derived from the enforcement of the customs laws and tariff regulations in the District subject to his jurisdiction, and to perform such other service in the administration of such laws as is ordinarily performed by a Collector of Customs or as he may be required to perform by the Governor of the Canal Zone. The Collector of Customs shall be appointed by the Governor, with the advice and consent of the Isthmian Commission. The Governor of the Canal Zone is hereby authorized to appoint and fix the compensation of Deputy Collectors, Surveyors of Customs and such other * Bevans, Treaties and Other International Agreements of the United States of America, 1776-1949 v. 10, pp. 690-692. subordinates and employees as may be necessary for the efficient administration of the Customs laws and Service. SECTION 4. The Governor of the Canal Zone is hereby authorized and empowered to prescribe and enforce rules and regulations for the administration of the Customs laws and Service of said Zone, and report the same to the Chairman of the Commission and said rules and regulations shall have the force and effect of law until annulled or modified by legislative act of the Isthmian Canal Commission or other competent authority. SECTION 5. Until otherwise provided by competent authority, duties on importation into the Canal Zone are to be levied in conformity with such duties as Congress has imposed upon foreign merchandise imported into other ports of the United States. SECTION 6. Goods or merchandise entering the Canal Zone from ports of the United States or Insular possessions of the United States shall be admitted on the same terms as at the ports of the States of this Union. SECTION 7. All goods or merchandise, whether free or dutiable, entering the Canal Zone by water, by rail or otherwise, for transportation across said Zone must be entered at the Customs House of the Collection District wherein the point of entrance is situated. Violation of this requirement shall subject the goods to seizure and forfeiture by the Customs officials. SECTION 8. The Governor of the Canal Zone is authorized to enter and carry out an agreement with the President of the Republic of Panama for cooperation between the Customs Service of the Canal Zone and that of the Republic of Panama to protect the customs revenues of both governments and to prevent frauds and smuggling. SECTION 9. The Governor of the Canal Zone is hereby authorized to enter upon negotiations and make a tentative agreement with the President of the Republic of Panama respecting reciprocal trade relations between the territory and inhabitants of the Canal Zone and appurtenant territory and the Republic of Panama; also a readjustment of customs duties and tariff regulations so as to secure uniformity of rates and privileges and avoid the disadvantages resulting from different schedules, duties, and administrative measures in limited territory subject to the same conditions and not separated by natural obstacles. The Governor shall report as to such negotiations and proposed agreement to the Chairman of the Isthmian Canal Commission, for submission and consideration by the Commission and such action by competent authority as may be necessary to render said agreement effective in the Canal Zone. This order will be proclaimed and enforced in the Canal Zone at Panama. WM. H. TAFT Secretary of War To the SIR: WAR DEPARTMENT Washington, June 24, 1904 CHAIRMAN OF THE ISTHMIAN CANAL COMMISSION. The necessities of the inhabitants and the due administration of the affair of government in the Canal Zone at Panama require the establishment o post offices and postal service in that territory. It is therefore ordered: That a post office be established in each of the following-named towns of the Canal Zone, to wit: Cristobal, Gatun, Boheo Gorgona, Bas Obispo, Empire, Culebra, La Boca, and Ancon. The post offices at Cristobal and Ancon shall be money-order offices. The Governor of the Canal Zone is hereby authorized to appoint post masters for the post offices herein established and fix the compensation there for, subject to the approval of the Isthmian Canal Commission. The Governor of the Canal Zone is directed to formulate a plan for a practical and efficient postal service in said Canal Zone and including such measures and provisions of the Postal Service of the United States as are not inapplicable to the conditions of law and fact existing in the Canal Zone, and to report said plan to the chairman of the Isthmian Canal Commission for such action as the discretion of the commission shall approve. Pending the establishment of the postal service by act of the commission or other competent authority, the Governor of the Canal Zone is hereby authorized to establish post offices at such additional places in the Canal Zone as in his judgment the interests of the public require, and to appoint postmasters therefor and fix their compensation, subject to the approval or other action thereon by the Isthmian Canal Commission. The Governor of the Canal Zone is also authorized to adopt and enforce such temporary rules, regulations, provisions, and requirements as may be necessary to secure a practical and efficient postal service in said Canal Zone, and to employ such temporary assistants and employees as the exigencies of the service require. By direction of the President: WM. H. TAFT Secretary of War Mr. Lee to Mr. Hay. No. 116.] AMERICAN LEGATION, SIR: I have the honor to embody in this dispatch the principal points in a memorial addressed to the President of Panama by the local chamber of commerce. This memorial was presented to the President on July 15: First. That the canal zone has been granted to the United States in perpetaity, for the use, occupation, control, maintenance, operation, sanitation, and protection of the canal exclusively for such purpose, but not in order to establish ports, custom houses, and tariffs, Second. That although according to article 3 of the canal treaty it seems that the United States may exercise sovereignty over the said zone, It is clearly understood that it shall do so only as far as may be necessary for the construction, maintenance, etc., of the canal within said zone. This is what has been leased to the United States by the Republic of Panama and confirmed in article 13 of the canal treaty whereby the United States may import into the zone, free from any charges, all that it may need for the construction and maintenance of the canal. * By the above-mentioned article 13 the United States is exempt from Import duties of any nature. If this stipulation had not been made, the Republic of Panama could levy duties, but neither in articles 2 nor 13 is the United States empowered to establish ports, customs-houses, or tariffs; on the contrary by article 9 the Republic of Panama is the one empowered to establish ports, custom-houses, and tariffs. As the Republic of Panama has stipulated that it is authorized to establish custom-houses in Panama and Colon (article 9) this fact alone makes it still more necessary that the United States should have provided for itself such authorization. In summarizing all the articles of the treaty pertinent to Importation, etc., it is clearly shown that neither the spirit nor the wording authorizes either of the contracting parties to establish custom-houses, tariffs, or ports within the zone of the canal Had there been any intention that the United States would establish them within the zone it should have been so stipulated, the same as the Government of Panama stipulated in regard to the cities of Panama and Colon. If custom-houses be established in the zone, all merchandise and produce save those of the United States would be shut out, and the produce of this country, such as rice, corn, beans, rum, coffee, tobacco, cattle, etc., certainly a very small production, would be shut out from the very place where the people of Panama would expect to have a ready sale and receive some benefit thereby. Commerce, agriculture, and the cattle business would be strangled, and the Government of Panama, which should derive its revenues from these sources, would suffer the same fate. Disaster would be general and all would be forced to emigrate. By article 1 of the treaty, the Independence of the Republic of Panama is guaranteed by the United States. By the proposed establishments the Republic of Panama would be reduced to the worst kind of dependence and servitude that exists, that of starvation. I am, etc., THE COMMISSION. JOSEPH W. J. LEE, * Foreign Relations of the United States, 1904, pp. 585–593. No. 4.] Mr. Barrett to Mr. Hay. AMERICAN LEGATION, SIR: Referring to my telegram of July 25 in regard to the port and tariff question, I shall make a brief statement only. .* * There is so much agitation of the subject in Panama that it seemed best to inform you of the situation by telegraph. The question is most important because it involves the whole issue of sovereignty in the zone. General Davis is convinced not only that the President's order of June 24 is in accordance with the treaty but that its continued enforcement is absolutely essential for successful administration of the zone. The chief difference is now over the entrance and clearance of vessels at La Boca, Port Ancon. The Panama Government contends that the United States is acting in contravention of the treaty and denies the right of the canal authorities to enter and clear ships. Despite Panama's objections vessels are arriving and departing from La Boca, but the tension is growing stronger each day and something must be done to end the trouble or to break the deadlock. The Chilian steamer Limari is now discharging cargo, but the Panama authorities threaten to arrest and fine both captain and agent unless she leaves port or complies with Panama's regulations. The agent has appealed to General Davis and he has replied that he will not permit any interference by other authorities (referring to Panama officials) with the movement of vessels at La Boca. He, how. ever, has informed the agents of all lines, as well as the Panama Government, that all vessels are privileged to stop at a common anchorage near Flamenco Island and then, unloading or loading by lighters through Panama Bay (proper), thus to be entered and cleared by Panama authorities. If, moreover, they desire to clear from Panama for Ancon in order to come in to the La Boca dock for movement of cargo or to clear from Ancon to Panama for the same purpose, the zone officials will readily receive or grant the necessary papers. But if vessels arrive cleared from some South American or North American port for Ancon in the United States canal zone and they wish to enter, or clear direct from, Ancon they must be permitted to do so without interference. Up to this writing nine merchant vessels have been received at La Boca. Until the arrival of the Limari the Panama Government only protested through the captain of the port; since her arrival the Panama authorities have tried in compel her captain or agent to respect their orders. * every way to In conclusion, I beg to state that I hope to be able through confer ences with the Panama minister of foreign affairs and General Davis to bring about a better understanding or, at least, to arrange a modus vivendi agreeable to both governments, until the question at dispute may be finally settled. General Davis and I have gone over the ques tion to-day carefully and I expect to see the Panama minister of for eign affairs to-morrow or Thursday. The present situation is almost intolerable for shipping interests, and some temporary adjustment must be reached before Admiral Walker and colleagues arrive, in order to prevent some unfortunate incident that might endanger |