Doctor Alfaro confirmed the understanding that this reference was taken out as the treaty refers to aviation in the Republic of Panama and not in the Canal Zone where of course the United States prescribes the regulations for aviation. Doctor Alfaro stated with reference to the last paragraph of Article XI of the draft treaty, by which Panama agrees to permit the armed forces of the United States to have free transit through the Republic for manoeuvres and other military purposes, that it was the understanding of the Panaman Commission that the provisions of Article VI of the Treaty of 1903 respecting compensation for damages caused the owners of private lands and private property by reason of the operations of the United States, its agents or employees, or by reason of the construction, maintenance, operation, sanitation and protection of the Canal, shall apply in the case of damages caused by the armed forces of the United States in manoeuvres or other military operations. Mr. White replied that the American Commission concurred with the understanding of the Panaman Commission that the provisions of Article VI of the Treaty of 1903 respecting compensation for damages caused to the owners of private lands and private properties by reason of the operations of the United States, its agents or employees, or by reason of the construction, maintenance, operation, sanitation and protection of the Canal would apply in the case of damages caused by the armed forces of the United States for manoeuvres and other military operations. With reference to Article XII of the draft treaty Doctor Alfaro requested that the American Commission state in what proportion subsidiary silver currency is legal tender in the United States, in order to have established officially the proportion in which American silver coins shall be legal tender in Panama, in conformity with the monetary agreement. Mr. White stated that the extent to which the subsidiary silver coins of the United States are legal tender is governed by the provisions of Section 3 of the Act approved June 9, 1879, reading as follows: "That the present silver coins of the United States of smaller denominations than one dollar shall hereafter be a legal tender in all sums not exceeding ten dollars in full payment of all dues public and private." Standard silver dollars, whose weight and fineness were established by the Act of January 18, 1837, at 412.5 grains .900 fine, are legal tender at their nominal or face value in payment of all debts, public and private, without regard to the amount, except where otherwise expressly stipulated in a contract. 21 Stat. 7. Doctor Alfaro stated that in various Articles of the treaty the English words "all" or "every" or other all inclusive terms are used. These had been translated into Spanish by the use of the definite article as such is the practice in the Spanish language where the definite article is used as all embracing and its use is not to be considered as making exceptions possible, unless specifically expressed, as might be understood if only the definite article were used in the English text. Mr. White stated that the American Commission had been willing to agree to the translation into Spanish of the words "all", "every", et cetera, by the definite article in view of the explanation above made by Doctor Alfaro on behalf of the Panaman Commission. Doctor Alfaro stated that it was the understanding of the Panaman Commission that the exception made in the first paragraph of Article VI permitting the United States to levy dues or taxes upon merchandise introduced into the Canal Zone for use or consumption therein does not conflict with Article V of the treaty providing that there should be granted reciprocal free importation of goods, wares and merchandise from the territory of the Canal Zone into that of the Republic of Panama and from the Republic of Panama into the territory of the Canal Zone. In other words, merchandise introduced from Panama into the Canal Zone for use or consumption therein would not be taxed by the United States. Mr. White stated that this also was the view of the American Commission. Doctor Alfaro stated that it was the understanding of the Panaman Commission that the United States in the exercise of exclusive jurisdiction over radio station sites, the property thereon, and the personnel engaged in operating such stations, as well as the members of the military and naval forces of the United States supplying such stations, in accordance with the penultimate paragraph of Article IX of the treaty, would not exercise civil or criminal jurisdiction over other persons than those enumerated in that paragraph, who might be in the territory occupied by such radio stations. Such other persons would be turned over by the United States to Panama as the sovereign of the territory. Mr. White confirmed that this was also the understanding of the American Commission. Doctor Alfaro stated that the Panaman Commission understood that Article XI of the Treaty, by which Panama agrees to cooperate in all possible ways with the United States in the protection and defense of the Panama Canal, does not impose on Panama the obligation to raise an army or establish a military service for the defense of the Canal. Mr. White concurred in this view on behalf of the American Commission. The Panaman Commissioners said that they desired to state in connection with that part of Article I of the General Claims Convention that refers to the so-called Colon Fire Claims, that in agreeing to submit to arbitration the question of the original liability of Colombia for the damages sustained in the fire that took place in Colon on March 31, 1885, and also the question of the extent to which the Republic of Panama may have succeeded in such liability in case any should be found to exist, it must be understood that the Republic of Panama has made it an invariable principle of her international relations to assume a share of the external debts of Colombia in proportion to her population in November 1903; that consequently and inasmuch as such claims originated in an event that took place when Panama did not exist as an independent Nation, but on the other hand the damages sustained in the Colon fire would constitute today an unliquidated debt of Colombia, assuming that Colombia had any responsibility, it must be understood that Panama takes and will maintain, when the discussion of the proposed tri-partite agreement comes up, the position that the arbitration of the second question of the proposed compromis should be confined to the decision of two propositions (in case it be found that Colombia had the ɔriginal liability), to wit: the Panaman proposition that Panama is under no obligation whatsoever to pay any part of the damages and a contrary proposition that Panama should pay a proportional share of the claims as in the case of the external debt of Colombia; and it is with this understanding that Panama agrees to the terms of the Claims Convention in this matter. The Panaman Commissioners added that while Panama agrees to cooperate with the Government of the United States in the negotiation of an arbitral agreement between Panama, Colombia and the United States, Panama reserves the right to join Colombia in her contention that she has no liability in fact or in law on account of the Colon fire of 1885, inasmuch as Panama has always denied that such original liability has ever existed on the part of Colombia. Mr. White stated on behalf of the American Commission that it had taken due notice of the position of the Panaman Commissioners. The meeting adjourned until July 28, 11 a. m., for the signing of the treaty. FRANCIS WHITE 'Signed July 28, 1926, p. 865. R. J. ALFARO EUSEBIO A. MORALES 711.192/217 The Secretary of State to the Minister in Panama (South) No. 433 WASHINGTON, August 4, 1926. SIR: There is enclosed herewith for your confidential information a copy of the Treaty signed with Panama on July 28, 1926, together with copies of the five exchanges of notes made at the same time. There is also enclosed a copy of the Claims convention signed at the same time." You will of course not communicate these documents to anyone until the Senate shall have removed the injunction of secrecy thereon. I am [etc.] FRANK B. KELLOGG [Enclosure 1] Treaty Between the United States of America and the Republic of Panama, Signed at Washington, July 28, 1926 • The United States of America and the Republic of Panama, desiring to settle certain points of difference between them which have arisen out of the exercise by the United States of sovereign rights in the Canal Zone by virtue of the Treaty of November 18, 1903, as well as to regulate certain features of their future intercourse arising from the contiguity of the Republic of Panama and the Canal Zone, have resolved to conclude a Treaty and have accordingly appointed as their plenipotentiaries: The President of the United States of America, the Honorable Frank B. Kellogg, Secretary of State of the United States of America, and the Honorable Francis White, Chief of the Division of Latin American Affairs, Department of State; and The President of the Republic of Panama, the Honorable Doctor Ricardo J. Alfaro, Envoy Extraordinary and Minister Plenipotentiary of Panama to the United States and the Honorable Doctor Eusebio A. Morales, Envoy Extraordinary and Minister Plenipotentiary of Panama on special mission; Who, after communicating to each other their respective full powers which were found to be in due and proper form, have agreed upon the following: ARTICLE I Article XV and the last sentence of Article VI of the Panama Canal Treaty between the United States of America and the Republic of Panama dated November 18, 1903, are hereby superseded and the provisions of the second sentence of Article VI are hereby amended in the manner following so far as concerns the method of ascertainment of damages to the owners of private property: Should it become necessary for the Government of the United States to acquire private property in conformity with the grants contained in said Treaty of November 18, 1903, after the date of this Treaty, the said Government shall give due and reasonable notice through diplomatic channels to the Republic of Panama, either by a note addressed by the Department of State to the Panaman Legation in Washington or by a note addressed to the Foreign Office in Panama City, stating the intention of the Government of the United States to acquire by expropriation said lands or properties in conformity with the grants contained in the Treaty of November 18, 1903, and title to the property shall be deemed to have passed from the owner thereof to the United States when the formality of giving the notice has been complied with. The Government of Panama shall thereupon take the necessary steps for the transfer of jurisdiction to the United States with due care for the interest of all inhabitants who might be in the territory whose jurisdiction is thus transferred. The value of said private lands and private property and the assessment of damages to them shall be appraised and settled by a Joint Commission composed of one of the Associate Justices or a substitute Justice of the Supreme Court of the Republic of Panama to be selected by the President of the Republic of Panama, and the Judge of the District Court of the Canal Zone, but in case of disagreement of the Commission an Umpire shall be appointed by the two Governments and he shall render the decision. All decisions by the Commission or by the Umpire shall be final. The appraisal of any such private property and the assessment of damages to it shall be based upon its value at the time the property is taken. No part of the work of the Canal or the Railroad or any of the auxiliary works relating thereto and authorized by the said Treaty shall be prevented, delayed or impeded by or pending proceedings of the Joint Commission or of the Umpire as established in this Article. ARTICLE II The Republic of Panama grants to the United States in perpetuity the use, occupation and control of that portion of Manzanillo Island, at the Atlantic terminus of the Canal bounded and described as follows: Beginning at a copper plug in the concrete dock which is near the northern end of the old Panama Railroad stone freight house in the city of Colon, said plug being 0.5 feet from the face of the dock and |