Department would be willing to express its views upon these principles and then the negotiations could proceed in the light of the principles thus established. The Secretary said that he desired to retain the advantage of the direct knowledge of the facts on the part of the Canal Zone authorities and of the expedition which would follow negotiations on the spot, but he had no wish to prevent the Panaman Government from fully expressing their wishes to the Department and he could assure the Minister that whatever might be presented would be carefully considered and frankly answered.

Taft Agreement Abrogated on June 1, 1924*

711.192/9

The Secretary of State to the Panaman Minister (Alfaro)

WASHINGTON, February 20, 1924. SIR: I have the honor to acknowledge the receipt of your note No. D-58, dated February 5, 1924, in which you were so good as to inform me that the Panaman Government had appointed a Commission, over which you will preside, to discuss and conclude with a similar Commission, to be appointed by the Government of the United States, an arrangement to supersede the agreement, known as the Taft Agreement.

Due note has been taken of the composition of the Commission," and I shall be pleased to receive the members thereof upon their arrival in this capital.

It gives me pleasure to inform you that the President has appointed a Commission on the part of the United States to meet with the Commission appointed by the Government of Panama to conduct negotiations for an arrangement to take the place of the Taft Agreement as embodied in the Executive Orders, issued by direction of the President on December 3, December 6 and December 28, 1904, January 7, 1905, and January 5, 1911. This Commission is composed of myself, as Chairman, and of the following members: Mr. Francis White, Chief of the Division of Latin American Affairs, the Department of State, Mr. Joseph R. Baker, Assistant Solicitor, the Department of State, and Mr. Edward L. Reed, Division of Latin American Affairs, Department of State.

Accept [etc.]

711.192/56c: Telegram

CHARLES E. HUGHES

The Secretary of State to the Minister in Panama (South)

WASHINGTON, May 28, 1924-6 p. m.

39. The President today issued a proclamation abrogating the Taft Agreement as of June 1.10 The Panaman Minister was informed that in order to provide ample time for the conclusion of the treaty

*Foreign Relations of the United States, 1924, Vol. II, pp. 522-527, 536-537. 'Not printed.

Dr. Ricardo J. Alfaro: Dr. Eusebio A. Morales, Secretary of Finance and Treasury; Dr. Eduardo Chiari, formerly Minister for Foreign Affairs; and Mr. Eugenio J. Chevalier, secretary of the Commission.

Foreign Relations, 1904, p. 640; also Executive Orders Relating to the Panama Canal (March 8, 1904, to December 31, 1921), Annotated 1921 (Mount Hope, C. Z., The Panama Canal Press, 1922), pp. 29, 31, 32, 33, and 103. For copies of the latter publication, address The Panama Canal, Washington, D. C 10 Proclamation No. 1699; not printed.

negotiations, the War Department is today instructing the Canal authorities to continue as heretofore, for a period of one month the rules and practices of the Canal administration in the matter of commercial operations in the Canal Zone. This will mean that: (1). The sale of goods imported into the Canal Zone by the Government of the United States shall be limited by it to the officers, employees, workmen and laborers in the service and employ of the United States and the Panama Railroad Company, and to contractors operating in the Canal Zone and their employees, workmen and laborers and the families of all such persons. The United States would continue to make sales to ships as heretofore. (2). The Canal authorities will continue to cooperate in all proper ways with the Republic of Panama to prohibit smuggling into the Republic of goods purchased in the commissaries. (3). The Canal authorities will continue to extend to private merchants residing in the Republic of Panama the facilities for making sales to vessels transiting the Canal which they now enjoy. (4). The Government of the United States will continue to provide at a reasonable charge ships trading between ports of the Pacific coast and the city of Panama with docking facilities for the loading and unloading of merchandise in the port of Balboa whenever merchandise are consigned to the city of Panama or are to be shipped therefrom; same facilities to continue to be enjoyed by passengers bound for and departing from the city of Panama from or for ports of the Pacific coast. (5). With the exception of cable companies, oil, shipping and other concerns having a direct connection with the construction, operation, maintenance, sanitation and protection of the Canal no private business enterprise shall be permitted by the United States to be established, in addition to those already established in the Canal Zone. (6). With the exception of the guests of the Tivoli and Washington Hotels no person who is not an officer, employee, workman or laborer of the United States, the Panama Canal, the Panama Railroad Company or a contractor operating in the Canal Zone or his employees, workmen and laborers, or an officer, employee or workman of a company entitled under Section 5 above to conduct operations in the Canal Zone, or settlers employed in the cultivation of small tracts and hucksters or small establishments for supply of these settlers and of other employees, and the members of the families and domestic servants of all such persons, shall be entitled to dwell within the Canal Zone and no dwelling belonging to the Government of the United States or to the Panama Railroad Company and situated within the Zone shall be rented or leased by them to persons not within the excepted classes.

You may inform the Panama Government of the foregoing.

HUGHES

711.192/69: Telegram

President Porras to President Coolidge

[Translation"]

PANAMA, July 9, 1924.
[Received July 11.]

Greatly disturbed by the reports sent by the Panaman Commissioners who are negotiating in Washington the new treaty to take the place of the Taft Agreement and earnestly desiring the negotiations to yield satisfactory results, I wish to appeal to Your Excellency's sense of justice and equity and to ask for your personal intervention so as to prevent a failure of the negotiations. Panama has declared herself willing to agree to all requests of the United States including the transfer of jurisdiction over a large part of the city of Colon which for Panama means the distressing sacrifice of witnessing a further mutilation of her territory in the principal port of the Republic. All that Panama asks is that the new treaty achieving the ends by which it is inspired, shall insure stability for Panama in her economic life by permanently establishing the proposition that the status of the Canal Zone cannot affect the commerce of the Republic. Panama asks that the policy outlined by President Theodore Roosevelt in 1904 and afterwards confirmed by his successor and various Secretaries of State be given expression in the new treaty so that she may find therein the guarantee of the security that is most wanting, for if the essential stipulations are not laid down as permanent in the same terms as are used in the Hay-Bunau Varilla Treaty, she will ever lie under the threat of commercial, industrial and physical ruin brought on by the erection of a competing commercial colony in the Canal Zone. As long as that menace exists the people of Panama will always live in fear of their economic development being curtailed or crippled.

12

In 1903 Panama gave the United States every power and privilege needed to insure the construction of the inter-oceanic canal and did so in the hope that in it she would find her economic redemption. The United States has built and operated the Canal with full success and we have declared, for its protection, our will to bind ourselves as allies without restriction both in peace and in war. By the treaty of 1903 Panama ceded and the United States acquired the use, occupa tion and control of the Canal Zone for the construction, maintenance, operation, sanitation and protection of the Canal. We ask that that strip of land be ever used for those lofty ends and never be made a cause of instability and menace of ruin to the very nation that ceded it. Present difficulties are due to insistence by the American Com

"File translation revised.

"Foreign Relations, 1904, p. 543.

missioners in stipulating a fifteen-year period for the only clauses that are vital to Panama, despite the fact that the Taft Agreement endured twenty years and that the joint resolution of Congress, no. 259 of February 6, 1923,13 authorized the abrogation of that agreement which was styled transitory and was to be superseded by a permanent one, and also despite the fact that each and every one of the concessions made by Panama in the draft of the treaty now under consideration are in perpetuity as must also be the concessions asked by Panama for the stability of her economic independence. Equity prescribes that there should be reciprocity and mutual concessions in the terms of the new treaty and I trust that through Your Excellency's benevolent intervention all the clauses agreed on will be perpetual so that each one of the two parties shall be equally favored by its benefits.

BELISARIO PORRAS

711.192/75a: Telegram

The Acting Secretary of State to the Minister in Panama (South)

WASHINGTON, July 12, 1924-2 p. m.

49. You will deliver the following to President Porras:

"Your Excellency's telegram to the President dated the 9th instant regarding the treaty negotiations now going on in Washington has been received and carefully considered and special study has been given to your desire that the article of the treaty granting commercial privileges to Panama be made in perpetuity and not for a period of fifteen years. I beg to recall to you the statement made by the Secretary of State in his note of October 15, 1923, to the Panaman Minister in Washington that it was manifest that before entering upon the vast extent of the enterprise undertaken by this Government in providing for the construction, operation and protection of the Panama Canal this Government had to be sure that it obtained adequate rights in the Zone and that the protection of the Canal in the future was appropriately secured. For this purpose the Canal Treaty of 1903 was made. To meet certain administrative exigencies during the period of the construction of the Canal, the administrative arrangement known as the Taft Agreement was effected. This arrangement, however, was of a temporary nature in order to serve more conveniently the situation then existing and it

expressly declared that in no wise did it affect the rights of either party to the Treaty of 1903. That Treaty forms and must continue to form the basis of the relations between the United States and Panama and provides the safeguards for the future which were deemed by this Government to be of controlling importance in making the decision to construct the Canal.

Ibid., 1923, vol. 11, p. 677. "Ibid., p. 648.