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Thus while it was possible to grant certain concessions to Panama in the Taft Agreement, through the non-exercise of certain of our rights under the Treaty of 1903 because that Agreement was a temporary one and was expressly stated not to be a delimitation. uerinition, restriction or restrictive construction of the rights of either party under the Treaty, it is manifestly impossible for the United States to make such concessions in perpetuity when its eventual needs in the future cannot now clearly be foreseen.

Your Excellency asks that the policy outlined by President Roosevelt in 1904 be given expression in the new treaty. You doubtless refer to the statement in a letter from President Roosevelt to Mr. Taft, dated October 19, 1904, in which he stated 'we do not intend in the least to establish an independent colony in the center of the State of Panama or to exercise governmental functions broader than is necessary to enable us to build, maintain and operate the Canal, in accordance with the rights given us by the Treaty.' In making this statement President Roosevelt undoubtedly gave expression to the policy of this Government, a policy to which it has closely adhered, but the statement will not admit of such a broad construction as to imply any intention on President Roosevelt's part to limit the rights definitely accorded to this Government by the Treaty of 1903. The policy outlined by President Roosevelt has, as stated above, been closely adhered to but the American Government must preserve its complete freedom of action for the future to avail itself should necessity therefor arise of the rights, power and authority granted to the United States by the Treaty of 1903. This Government is perfectly willing to grant to the Panaman Government priv ileges of the character described in the proposed treaty for as long a period as can be safely foreseen and for this reason these priv ileges have been given for a term of fifteen years with a provision that they will be continued thereafter for periods of five years unless denounced one year in advance of the termination of any such period. This is in accordance with the traditional policy of the United States Government to deal not only fairly and justly but generously with the Republic of Panama and I hope you will agree with me that the interests of Panama are fully protected and provided for in the proposed treaty.

The above question and the question of the transfer of jurisdic tion over a part of the city of Colon are distinct and separate. In this connection I desire to point out that title to all the land comprised in the area in question is now vested in the Panama Railway Company and at the expiration of that Company's concession the reversionary rights to those lands are held by the United States by virtue of the provisions of the Treaty of 1903. It is eminently rea sonable that the United States should desire jurisdiction, especially police jurisdiction, over the areas used in connection with the Canal operation and inhabited by officers and employees of this Govern ment in the operation of the Canal. This will avoid possibilities of friction.

Your Excellency further states that each and every one of the concessions made by Panama in the draft of the treaty now under consideration are perpetual. I desire to point out to Your Excellency that a number of concessions granted by the United States to

Panama in the treaty under consideration are likewise perpetual for instance, the appraisement of additional private lands acquired by the United States in the future to be based upon their ralue at the time they are acquired rather than at their value prior to the conclusion of the Treaty of 1903; the agreement of the United States to construct roads to the value of approximately $2,000,000 in the territory of Panama; to supply free of charge to Panama the necessary space for the establishment of custom houses in Canal Zone ports; free trade established between Panama and the Zone; concession regarding transportation of alcoholic liquors across the Zone; the making of Panaman currency legal tender in the Zone, et cetera. The only privileges granted to Panama for a term of years rather than in perpetuity are those in regard to certain commercial privileges and the reasons why they cannot be given in perpetuity are explained above.

I am confident that Your Excellency, upon further consideration of the matter, will perceive the very generous spirit in which the negotiations have been undertaken by the United States and will fully appreciate the desire and determination of this Government to deal justly and liberally with the Panaman Government in all matters. Joseph C. Grew, Acting Secretary of State."

GREW

711.192/93: Telegram

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

PANAMA, September 21, 1924-9 a. m.

19

[Received 2:25 p. m.]

92. My 91, September 20, 2 p. m. The President has informed me that the new proposals were discussed in detail at yesterday's conference with the President-elect which was also attended by the commissioners and that the new President is favorably inclined both to the signing and ratification of the treaty. Mr. Chiari is familiar with all previous negotiations.20

SOUTH

"Rodolfo Chiari.

Further changes in the draft were proposed however by the Panaman negotiators and reported to the Department by the United States Minister, namely: in art. 2, that the boundary line be made definitive and perpetual; in art. 4, par. 1, that bonded warehouses he established in the Canal Zone only by the United States itself and not by private persons; in art. 6, last par., that the right of the United States to make use of the cities and harbors of Panama and Colon for anchorage, loading, etc., be exercised only "in case of emergency": in art. 8, that the right of the United States to enforce quarantine and sanitary regulations be limited to those which were not of a strictly municipal character. (File nos. 711.192/92, 97, 111.)

These proposals for further changes were unacceptable to the Department.

711.192/104: Telegram

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

PANAMA, September 26, 1924-noon.
[Received 6:55 p. m.]

100. My 99, September 25, 1 p. m." There is no prospect of reaching an agreement under the present administration. The President evidences the desire that the conversations should be allowed to be continued after October 1st. I have again informed him and the Commissioners that the Department's informal proposals are definitely withdrawn and that the negotiation will have to be continued between the two commissions in Washington after agreement had been reached upon the two principal points of contention. I regret exceedingly that the unforeseen developments in regard to other matters prevented completion of the treaty at this time. I hope however that the Department feels that the circumstances justified the effort.

SOUTH

Not printed.

#98. Final Negotiations and the Text of A Treaty Between the United States and Panama, Signed at Washington, July 28, 1926*

T11.192/205

Minutes of the Twenty-third Meeting of the American and Pana man Commissions, July 27, 1926, 5 p. m.3

The draft of the treaty agreed upon in informal conversations between members of the two Commissions from June 18, 1925, to date was submitted to final consideration of the Commissions.

With reference to the Preamble, Doctor Alfaro inquired if the use of the word "sovereign" with reference to the rights granted to the United States by the Treaty of 1903 is meant to imply an extension of such rights or only a recognition thereof.

Mr. White replied that this was meant only as a recognition of all the rights granted to the United States by Article III of the Treaty

of 1903.

Doctor Alfaro replied that this was satisfactory; that Panama stands by all her obligations and recognizes all those rights.

Doctor Alfaro requested the American Commissioners to confirm the agreement that the words "substitute Justices" in paragraph second of Article I are meant to include the substitute Justices known in the Republic of Panama as "suplentes”, as well as those known as "conjueces". Mr. White confirmed the agreement between the two Commissions that the words "substitute Justices" are intended to include the substitute Justices known in the Republic of Panama as “suplentes", as well as those known as "conjueces".

Doctor Alfaro inquired in connection with paragraphs 3 and 4 of Article IV if private merchants renting space in the Canal wharves or in a bonded warehouse operated by the United States Government, or distributing merchandise by means of consignments in the terminal ports of the Canal "for orders" are included in the category of persons entitled to live in the Canal Zone.

Foreign Relations of the United States, 1926. Vol. II. pp. 828-853. This treaty was not ratified by either country and therefore remained without force. For President Coolidge's message transmitting the treaty for Senate approval in Dec. 1926 See Senate Executive Document B, 69th Congress, 2nd Session. JX234.A23.

For previous correspondence, see Foreign Relations, 1924, vol. 11, pp. 521 ff. See also post, pp. 854 ff.

The Commissions as originally constituted convened on Mar. adjourned sine die on Aug. 5, 1924, after holding 21 meetings. dons as reconstituted in 1925 convened on July 18, 1925, and July 27, 1928, after holding two formal meetings. 'Foreign Relations, 1904, p. 543.

17, 1924, and The Commisadjourned on

96-673 0 77 - 53

Mr. White replied that the activities referred to by Doctor Alfaro would not, of themselves, entitle the persons mentioned by him to reside in the Canal Zone.

Doctor Alfaro asked the American Commissioners to confirm the arrangement agreed upon with reference to the provisions of paragraph 3 of Article IV and paragraph 2 of Article VI of the draft treaty. Mr. White stated that he was glad to confirm that it is of course understood that nothing therein contained affects the right of the Republic of Panama to collect customs duties or to impose sales or other taxes in the cities of Panama and Colon on goods imported, sold or consumed in those cities or in other parts of the Republic of Panama.

Referring to the term "enforce" used in Article VIII, which in the Spanish text has been translated "poner en vigor", and the term "enforcement", which in the Spanish text has been translated "ejecución", Doctor Alfaro requested that there should be an understanding as to the use of such terms in the English text of the treaty. Mr. White stated that it is the intention of the United States to continue substantially the same system that has been in force in the cities of Panama and Colon since 1904, namely: sanitary rules and regulations prescribed by the United States sanitary officers will be promulgated by decree by the President of Panama. The sanitary officers in the cities of Panama and Colon will supervise the observance of the sanitary ordinances and will prescribe for transgressors thereof the proper penalties and such penalties or fines or arrests will be executed by the administrative or police authorities of the Republic of Panama. Mr. White stated however that it is of course understood that this agreement in no wise curtails the rights of the United States under the penultimate paragraph of Article VII of the Treaty of 1903. Doctor Alfaro agreed.

Mr. White confirmed on behalf of the American Commission with reference to paragraph 1 of Article IX of the draft treaty, that it is not the intention of the United States to discriminate against the importation of radio sets and materials of any description because of their origin or country of manufacture. He stated that the provision agreed upon by the United States in the matter of licenses is for the purpose of the protection and operation of the Panama Canal.

With reference to Article X of the draft treaty Mr. White stated that the American Commission had agreed at the request of the Panaman Commission to take out of the penultimate paragraph reference to flying over the Canal Zone because the Panaman Commission had pointed out that this Article of the treaty referred to aviation in the Republic of Panama and not in the Canal Zone where it is of course understood control vests with the United States.

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