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Diplomatic relations between the United States and the Republic of Panama

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DIPLOMATIC RELATIONS BETWEEN THE UNITED STATES
AND THE REPUBLIC OF PANAMA
A Thesis
Presented to
the Faculty of the Department of International Relations
The University of Southern California
In Partial Fulfillment
of the Requirements for the Degree
of Master of Foreign Service
by
Daniel Webster Kaufman
May 1941
UMI Number: EP58341
All rights reserved
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UMI EP58341
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T h i s thesis, w r i t t e n by
.........../ 6 iT<S'
u n d e r the d i r e c t io n o f h .l& . F a c u l t y C o m m it t e e ,
a n d a p p r o v e d by a l l it s m e m b e r s , has been
presented to a n d accepted by the C o u n c i l on
G ra d u a t e S t u d y a n d Research in p a r t i a l f u l f i l l ­
m e n t o f the re q u ire m e n ts f o r the degree o f
MASTER OF FOREIGN SERVICE
Deaft
S ecretary
Date.. J 0NE^ 19 41
F a c u lty C o m m itte e
<r*TJk
INTRODUCTION
Within the past two jears the Republic of Panama,
through the instrumentality of a new treaty with the United
States, has realized many long-desired ambitions and wishes
regarding economic and political affairs, both within the
Republic and in the Canal Zone,
From the inception of the
Republic until the ratification by the United States Senate
of the latest treaty, Panama had found many reasons for com­
plaint at the treatment aceorded her by the United States.
The new treaty has removed many causes of friction.
More than
that, it has gone far to remove Panama from the status of a
protectorate of the United States, and has given to the small
country the position of a sovereign nation.
Panama was brought into being so that the Panama Canal
could be built.
From the beginnings of Panama down to within
very recent times the Republic had waged a long fight against
the United States, seeking greater freedom from northern con­
trol, and at the same time has attempted to curb the activi­
ties of this country In the Canal Zone.
By slow and discon­
tinuous steps Panama has risen from the position of complete
dependency to one of actual freedom.
Sovereignty, always nom­
inal, now seems actual, at least in times of peace.
It is the purpose of this paper to examine briefly the
creation of the Republic and the struggles of the early
period, during which the Canal was under construction,
cating the.causes of the first disagreements.-
indi­
With the com­
pletion of 'the Canal and the termination of the First World
War, Panama assumed a more aggressive attitude toward the
United States, whose policy from 1903 until the "Good Neigh­
bor” treaty of 1936 was signed was one of condescension and
forbearance.
In 1926 the United States and Panama sought a
new agreement which would give, effect to the changed status of
the Canal Zone, the Canal having
been completed and opened to
the commerce of the world.
treaty, based on the same
This
fundamental principles as that of 1903* marked the high-water
mark of American domination of Panama.
The treaty was summari
ly rejected by the National Assembly of Panama.
Until the stringencies of the economic depression made
themselves f e l t ‘in the.early 1930!s, matters were allowed to
drift.
Economic necessity provided the stimulus and the ad­
vent of the Good Neighbor policy gave the opportunity for Pana
ma t<a> again seek redress of her grievances.
Many months of
negotiations culminated in the signing of a treaty in 1936*
*his pact was ratified in 1939 and with its publication Panama
entered upon a new phase of her history.
While keeping In mind the routine relations of the two
states,.this paper will be concerned primarily with the trea­
ties of 1926 and 1936.
In the case of the former the power of
the United States is seen at its
marks the triumph of Panama.
zenith, while the latter pact
TABLE OF CONTENTS
CHAPTER
I.
PAGE
THE CREATION OF PANAMA.............................
The New Panama Canal Company..................
.............
.'4
Bunau-Varilla and Amador.
• • . • • • • • • •
7
...........
11
The New Republic recognized . ................
13
President Roosevelt receives a n e w minister .
17
THE TREATY OF 1903.
...........
19
The question of Panamanian sovereignty.
. ..
21
. . . . .
22
EARLY D I S A G R E E M E N T S .............................
25
Principal provisions of the treaty.
III.
Temporary delimitation of the Canal Zone.
17.
V.
2
The Hay-Pauncefote Treaty
Success of the Revolution • • •
II.
1
. .
27
The Taft A g r e e m e n t s ...........................
29
Land compensation
35
RAILROADS AND WIRELESS.
....................
. . . . . . . . . . . .
38
The Duncan C o n c e s s i o n ........................
39
The United States approver a bond issue
43
...
Further railroad construction ................
44
Panama surrenders wireless control...........
45
BACKGROUND AN D E A RLY NEGOTIATIONS OF THE
TREATY OF" 1 9 2 6 .................................
50
Panama asks for a new treaty.
52
The struggle over land requisitions . . . . .
52
V
CHAPTER
PAGE
P a n a m a ’s list of grievances
. P a n a m a ’s complaint against
P a n a m a ’s complaint against
57
therailroad . . .
60
the
60
commissaries .
Cancellation of the Taft A g r e e m e n t s .........
The problem of Panamanian investments . . .
YI.
THE TREATY OF 1926.
62
.
.............
70
■ The question of commercial privileges . . . .
Further negotiations.
VII.
72
.................... 75
President Coolidge takes a h a n d .............
77
Negotiations in P a n a m a .................
80
Tentative a g r e e m e n t ................
83
Failure of the n e g o t i a t i o n s ..................
87
Negotiations resumed...........
89
The treaty s i g n e d ........................... .'
89
Provisions of the treaty ......................
92
Panama is a r o u s e d .......................
94
PANAMA. CONTINUES THE STRUGGLE
. . .............
Criticism of the t r e a t y . . . • . . . .
Revolution sweeps Panama.
VIII.
67
99
. . .
100
.............
104
The Claims C o n v e n t i o n ........................
108
THE GOOD NEIGHBOR POLICY IN A C T I O N .............
Ill
P a n a m a ’s financial crisis ....................
112
President Arias appeals to President
Roosevelt
An agreement is reached
.
...............
112
114
v i
CHAPTER
IX.
PAGE
THE. TREATY OF 1936.
.^
. .
Signature of the treaty
....................
The Army and Navy object.
.
.................
'119
121
124
Panama ratifies the p a c t .....................
An exchange of notes.
126
........................
Senate opposition
.
130'
132
Ratification...........
X.
129
Panamanian g a i ns .................................
133
United States gains .............................
136
Explanatory notes . .
138
..........................
SUMMARY AND C O N C L U S I O N S ......... .'.............
B I B L I O G R A P H Y ..............................................
BIBLIOGRAPHICAL N O T E ...........
APPENDIX A .
......................
APPENDIX B ...............
.
. .
140
145
147
151
-
.
152
CHAPTER I
THE CREATION OF PANAMA
Panama threw off the yoke of Spain in 1821.-*- From that
time until the formation of the. republic in 1903, Panama
led a troubled existence.
The Isthmians united with Colombia
in 1822,s only to fine that they had made a mistake.
For the
greater part of a century anarchy and turmoil were the order
of the day in Colombia and in Panama.
There were uprisings
in 1840 and 1349*r-to mention only two of the better known
revolts.
Through most of the period Panama was at loggerheads
with Colombia, and at times was almost separate from it.
The United States and N e w Granada signed a treaty in
1846 by which the United States guaranteed the neutrality of
the Isthmus and pledged herself to keep the Isthmus open to
the commerce of the world.
The sovereignty of N e w Granada
over Panama was also guaranteed.^ This treaty was to have
•*■ William D. McCain, The United States and, the Repubblic of P a n a m a ,(D u r h a m . North Carolina:
Duke University
Press, 1937), p. 7.
2 Lo-c. cit.
^ Colombia has been known as Nueva Granada, Confedgraclon Glranadina, Estados CJnidos de Colombia, Estados
UnloSos de Neuva Granada and Gran Colombia at various times.
(McCain, “T o e . cit., p. 9).
E
far-reaohing influence in Panama, and was to provide the
legal basis for American intervention in Panama in 1903.
The interest of the United States established by
the treaty of 1846 was reenforced by the Clayton-Bulwer
pact of 1850.
By this instrument England and the United
States agreed that neither government would obtain exclu­
sive control over any ship canal in Central America, nor
would they fortify, colonize, occupy, or assume sovereignty
over any portion of Central America for the purpose of
building such a canal.
In effect, Britain and the United
States agreed that any cajaal in Central America would be
a joint ehterprise.1
The initiative in canal construction, however, was
taken by the French, rather than the British or Americans*
After centuries of discussion, an attempt was made to cut
a canal across the Isthmus under the auspices of Ferdinand
de Lesseps.
Work was begun in 1879 and was carried on for
several years, coming to an end in 1888 when the finances
of the builders were exhausted.2 The company went into
bankruptcy early in 1889.
A successor, known as the New
Panama Canal Company, was active on the Isthmus without
much sign of success from 1894 until 1899, when it too
^McCain,
0 £.
c i t . , p. 8.
2 I b i d ., p • 10♦
5
1
succumbed to financial troubles.' Under the terms of the
concession, the Canal was to be completed by the fall of
1904, or else the holders of the concession forfeited
what they had accomplished,
together with the machinery and
equipment brought to the Isthmus.
This was the basic situation at the close of the
century.
Events were marching fast.
was again in the making.
On the Isthmus trouble
In 1900 there had been serious
disorder, and the following year the United States, acting
under the terms of the treaty of 1846, had landed troops
to preserveoorder and to keep the Isthmus open.‘
In the United States a series of events was prepar­
ing the way for the drama of 1903.
The long voyage of
the battleship Oregon during the Spanish-American war had
inflamed the popular imagination and had brought vividly
before the public the necessity of a Oa.nal which would
shorten by m a n y thousands of miles the sea trip between
the east and the west coasts.
In 1901 Mr. John Hay, the
aging Secretary of State, and Mr. Pauncefote, the British
1 L o c . c i t . The United States invoked the Monroe
Doctrine to exclude the French government from partici­
pation in the company and to keep it a private enterprise.
2 Dwight Carroll Miner, The Fight For the Panama
R o u t e . (New York: Columbia University P r e s s ) , 1940. p. 57.
3 McCain, op. c i t . , p. 11.
ambassador, had signed a treaty vdiereby the disabilities
of the Cl&yton-Bulwer pact were removed and the United States
was given permission to build a canal under its own auspices.
Through the accident of an assassin’s bullet, Theodore Roosevelt had become president of the United States.
Roosevelt
carried to the White House memories of San Juan hill, and
his diplomatic technique reflected the swashbuckling m e ­
thods he had employed in Cuba a few years earlier.^
Hay
was a conservative man without anything of particular note to
mark his career.
By the time the youngish Roosevelt took
office, Hay was close to the end of a long career, and he
seems to have been of little influence in shaping Roose­
v e l t ’s foreign policy.
of S t a t e .
Loomis was the Assistant Secretary
Able collaborator in unorthodox diplomatic pro­
cedure was Philippe Bunau-Yarilla, former chief engineer
of the H e w Panama Canal Company, who moved, freely in the
diplomatic circles of Washington and the financial circles
of Hew York.
1 Miner,
op. cit. , p. 117-18.
^ While events and circumstances were accumulating
rapidly from about 1899 on, pointing toward a climax of
some kind, it is interest to speculate upon the possible
turn events might' have taken in 1903 if a man of say Calvin
Coolidge’s stamp had been president instead of Theodore
Roosevelt.
Beyond a doubt Mr. Roosevelt furnished the
spark that was necessary to carry through to success the
fight for the Canal.
5
After the signing of the Hay-Pauncefot6 pact,-*- the next
step was to acquire, if possible, the rights of the New Panama
Canal Company*
This would include the right to use that por­
tion of the Canal which had been dug and to take over the
machinery and- equipment abandoned, in the jungles of Panama.
Likewise, it would be necessary to secure from Colombia the
right to take over the French concession.
Since the original
grant was to expire within a few years, it was necessary that
a new concession be obtained.
the Spooner act.
To this end, Congress passed
This act empowered the president to obtain
'
the rights, franchises, and property of the New Panama Canal
Company at a cost not to exceed forty million dollars, and
also to secure from Colombia a strip of land across the
Isthmus for the Canal.^ If the president should find it im­
possible to carry out these instructions within a reasonable
length of time, he was then to proceed with steps to build
Two days before the signing of the Hay-Pauncefote
treaty the Walker commission filed its report favoring a
canal through Nicaragua.
At the time of the report the N e w
Panama Canal Company had failed to place a definite price on .
its concession and properties, but several weeks later offered
to accept #40,000,000 for them, this being the price sug­
gested in the Walker commission’s report. This action by
the Me w Panama Canal Company undoubtedly aided the friends
of the Panama route (Miner, ojd . cit., pp. 115-17, 119).
2 Miner, 0 £. c i t ., p. 156.
6
a canal through Nicaragua.1
H a y and his collaborators proceeded to open negotia­
tions with Colombia, and in June, 1902, the Eay-Herran treaty
V*'
was signed by which the United States acquired the right to
dig a canal across the Isthmus of Panama.^ Only a little more
than a year later the Colombian Congress, after an historic
session rejected the treaty.^
The stage was set.
The necessity for the Canal was
clearly seen, and an understanding had been reached with Great
Britain.
The New Panama Canal Company was at the end of its
resources, and it wished only to salvage what it could from
its huge investment on the Isthmus.
of the Isthmus,
stood in the way.
Colombia alone, the owner
Koosevelt was not a man of
great patience, and he preferred the Panama to the Nicaragua
route.
Bunau-Varilla saw the forty million dollars which
the United States was prepared to pay his company about to
slip through his grasp.
It was now the fall of 1903 and one year
1 Loc. c i t .
2 Miner,
ojd .
cit., p. 335.
3 Much can be said, and it is perhaps as well to leave
a great deal unsaid, about the failure of the Colombian Con­
gress to ratify the treaty.
By waiting a matter of months,
the properties and finished work of the New Panama Canal Com­
pany would revert to Colombia.
The United States had agreed
to pay forty million dollars to the company for those proper­
ties.
Would not the United States pay that same forty
million dollars to Colombia?
v
7 .
remained before the N e w Panama Canal Company would lose
its concession and with it a huge investment,
Bunau-Varilla acted.
He saw and talked with both
Secretary Hay and President Roosevelt.1 Dr. Amador Guerrero,
who is usually referred to simply as Dr. Amador, was the
center of a revolutionary group on the Isthmus who used his
home as a meeting place.2 Toward the end of September Dr.
Amador came to New York and was soon in touch with BunauVarilla.
Through the latter, Amador obtained funds, and
it was agreed between the two men that Amador was to return
to Panama for the purpose of starting a revolution that
would have as its object the separation of Panama from-Colom­
bia. ®
The precise roles that Roosevelt and Hay played during
the crubial days following the Bunau-#arilla-Ainador meeting
is a matter for speculation.4 Of his meeting with
Panama.,
211 .
Secretary
1 Philippe Bunau-Varilla, The Great Adventure of
(New York: Doubleday, Page, and Company, 1920T~PP* 192,
% McCain,
o p . c i t . , p..13.
.
3 Bunau-Varilla, op. c i t ., pp. 202-04.
4 The literature on the subject is voluminous.
Roose­
v e l t ’s part in the Panama imbroglio has been likened to that
of a brigand on the one hand, and to that of a saving angel
on the other.
Mr. Roosevelt’s own recollections
in later
years are open to the usual suspicions with which latterday explanations, statements, justifications, etc., of states­
men are to be greeted.
The truth probably lies in-the middle
ground:
Roosevelt was not the hero he chose to be; not the
blackguard his enemies thought him.
Hay, Bunau-Yarilla records that while Hay was non-committal
with regard to a possible revolution in Panama, neverthe­
less, tfI knew all.«l
Dr. Amador left for Panama on October 20.
According
to the plans which Bunau-Varilla had formulated, the rising
in Panama was to take place two days after the arrival of
Dr. Amador in Colon, that is, on October 29.^
Undoubtedly
it is more than a coincidence that a few days after Amador
sailed several naval vessels were ordered to stations near
Panama.*.
Among the ships so instructed were the D i x i e ,A t l a n t a ,
and Nashville.3 The Marblehead and Concord were ordered to
proceed directly to Panama from Acapulco, Mexico, and the
Nashville was despatched to Colon, on the Atlantic side of
the Isthmus.4 The commanders of the Nashville and of the
Marblehead and Concord were given identical instructions to
keep the transit of the Isthmus open.3 This action was in
accordance with the powers granted the United States under
treaty of 1846 between .the United States and New Granada.6
1 Bunau-Yarilla,
2
op. cit. , 211.
P* > £21.
3 ..Miner,
op. c i t ., p. 358.
4 I b i d . , P. 361.
3 IM <W
^
*361-62..
* A n t e ., p . 1.
The fateful day, October 29, came and went, and
Bunau-Varilla paced his room in t h e .Waldorf-Astoria hotel
in N e w York without news from his collaborator, Doctor
Amador,
Several anxious days passed;
then, on the after­
noon of November 3, the habitual calm of the State Depart­
ment was broken by a cable from M a l m r o s , United States Consul
-at Colon.
The consul reported that ^
Revolution imminent.
Government force on the Isthmus
about 500 men.
Their officers promised support revo­
lution.
Tire department, Panama, 441 # men are well
organize/i and favor revolution.
Government vessel
Cartagena with about 400 men arrived early today with
new commander-in-chief, Tobar,
Was not expected until
November 10.
T o b ar’s arrival is not probable to stop
revolution.
A little more than an hour after this message was
delivered to the State Department, Assistant Secretary of
State Loomis cabled the Consulate-General in Panama that:
"Uprising on Isthmus reported.
Keep Department promptly
and fully informed."2 To Malmros Loomis cabled to inquire
if troops from the Colombian warship Cartagena were preparing
1 Foreign Relations of the United States_, 1903,
p. 235.
2 Ibid. p. 231.
10
to land.'1' Tension in the Department increased.
A message
for the Nashville went unacknowledged by the commander
of the vessel, and Loomis asked Malmros if the message
had been received and delivered.2 Early in the evening a
cable from Ehrman,
consul-general in Panama,
that there was, ,#No uprising yet.
told
Hay
Reported will be in night,
Situation is critical*3 Only a few minutes after Ehrman1s wire
was delivered to the Department, another message from Malmros
gave the disquieting information that.4
Troops from vessel Cartagena have disembarked; are
encamping on Pacific dock awaiting orders proceed to
Panama from commander-in-chief who went there this morn­
ing.. No message for Nashville received.
The absent commander*-in-chief, who had crossed the
Isthmus with his staff in the morning for the purpose of
1 I b i d . , p. 236.
Colombian troops, a s much as those
of a foreign power, could interrupt the peaceful transit of
the Panaman Isthmus.
Using the treaty of 1846 as authority,
the United States would have good legal ground for pre­
venting Colombia from sending her own troops Into her own
territory*
The inability of Colombian troops to cross the
Isthmus to get at Doctor Amador and his friends was, of course,
a great aid to the conspirators in giving them time to carry
out their plans.
^ fforeigfl Relations of the United S t a t e s , 1903 p. 236.
3 I b i d .. p. 231.
This brief cable is held by some to
be proof that the-United States conspired with the revolution­
ists, since by implication, it tends to show a fore-knowledge
of the uprising,
It can also be argued with force that the
tense situation on the Isthmus was a matter of common know­
ledge, and that Ehrman was only reporting in a routine manner
on an event which many thought was likely to occur at any time.
11
inspecting the garrison in Panama, was, by the time Malmros*
wire had reached Washington, languishing in the Panama bar­
racks, arrested by the revolutionists.b
Loomis now wired Malmros that f!the troops which landed
from the Cartagena should not proceed to Panama’
.^
At -9:50
that night, a wire from Ehrman told the story of the revolu­
tionists* success^
Uprising occured tonight, 6 ; no bloodshed.
Army and
navy officials taken prisoners.
Government will be or­
ganized tonight, consisting three consuls, also cab­
inet.
Soldiers changed.
Suppose same movement will
be effected in Colon.
Order prevails so far.
Situa­
tion serious. Pour hundred soldiers landed Colon today.
Mr. Ehrman erred slightly in his report that there was
no bloodshed.
One Chinese was killed by a stray bullet while
lying in bed.
Success of the revolutionary group in Panama, no
doubt, inspired Secretary Hay himself to wire Malmros forty
minutes after the Ehrman wire was received that
If despatch to Nashville has not been delivered,
inform her captain immediately that she must prevent
government troops departing for Panama or taking any
action which would lead to bloodshed, and must use
every endeavor to preserve order of Isthmus.
n
Miner, op. cit., p. 363.
^ - QC •
3
Ibld->
>
P*
&lso Cf.
231 •
4 -IfrlcL* , p. 237.
ante.p. 7. Note 6.
12
By the evening?., of the next day Bhrman could report to
Washington that "Independence publicly declared.
Three con­
suls, approved, organize government composed irrederico Boyd,
Jose Augustin Arango, Tomas A r i a s ’
.^- Meanwhile, Loomis had
wired -Ehrman that the latter was to get in touch with the commender of the gunboat Bogota, which had arrived on the scene
of action., and tell him that the United .states government
wanted him "...to refrain from wantonly shelling the city."
For his information, Ehrman was'told that the United States
would have a naval force at Panama in twd days.** A long re­
port from Malmros .confirmed that everything was going well
for the revolutionists.®
On iJovemher 5 , the commander of the Bogota threatened
to kill all Americans in colon unless luckless lobar, seized
i n ’Panama, was released.
By early evening he thought better
of the act, and Malmros was able to report that "All Colombia
soldiers at Colon now, 7 p. m. going on board Koyal Bail
steamer returning to Cartagena.
in sight.
For his part, Ehrman hads
-1
-i
-
---n--- -m
1 iM.1- . P- g3S.
g L o c . ci t .
® I b i d ., p. 237.
4 . Ibid. , p. 233.
5 Ibid. . p. 832.
Vessel,
supposed to be Dixie.,
13
Received an official circular letter from the
committee of the provisional government saying that on
4th, political move occured, and the Department of
Panama withdraws from the- United States of Colombia and
formed [sic) the Republic of Panama.
Requested to
acknowledge receilpt of circular leter.
Loomis instructed. Ehrman t o .acknowledge receipt of
the letter and to await further instructions before taking
]
any other steps along this line. * Two hours later Loomis ner­
vously told Ehrman to keep the Department informed” .•.as
g
to situation.”
On November 6 Malmros, borrowing a somewhat florid,
jahrase, told the Department that "Tranquillity absolute
in Colon.”
E h r m a n ’s Qespatch of the same day stated that
"Bunau-Yarilla has been officially appointed confidential
4
agent of the Hepnb.lie of Panama at Washington.”
Hay, on
the same day, r-
a wire to Ehrman which gave the position of
o
the United Sltates in the following terms:
The people of Panama have by an apparently unanimous
movement, dissolved their political connections with
the Republic of Comombia and resumed their independence.
When you are satisfied
that a de facto government, repu­
blican in form, and without substantial opposition from
its own people, has been established ±n the state of
Panama, you will enter into relations with it as
1 I b i d . , P. 232
2 I b i d . , P. 253
3 I b i d . , P* 239
4 Ibid., p. 233
5 Loc. Cit.
14
the responsible government of the territory and look
to it for all due action to protect the persons and
pro|)@rt^ of citizens of the United States and to keep
open the Isthmian transit in accordance with the obliga­
tions of existing treaties governing the relations of
the United States to that territory.
Thus, Panama achieved de facto recognition two and a
half days after the revolution had been launched.
On the evening of the 6th, Ehrman wired Hay that
"Felipe (sic) Buna u
Tarilia has been appointed envoy ex­
traordinary and minister plenipotentiary to the ^nited States
Of America."2
During the revolutionary activity, the Panamans had
not been neglectful of the State Department in Washhiigton
or of the Hough Rider in the White House.
The city of Panama
notified Roosevelt of its action in joining the revolutionists
in a wire of November 4, and expressed the hope that the United
States would grant
"recognition of our cause."
The revolu­
tionary junta on November 5, wired Hay that Bunau-Varilla had
been named confidential agent of the republic.4
The next day
1 Attention is called to the fact that Mr. Hay, under
the pressure of rapidly moving events, instructed a consulgeneral to accord recognition to the Panaman government.
Mr.
Ehrman, so far as the published despatches go, does not
seem to have been given diplomatic rank, such as that of m i n ­
ister.
The discretionary power given Ehrman is worth r
£ I b i d . , p. £34.
3 I b i d . , p. £39.
4.Loc. cit.
15
H a y was told that:
The Board of Provisional government of the Republic
of Panama has appointed Senor Philippe Bunau-Yarilla en­
voy extraordinary and minister plenipotentiary near your
government with full powers to conduct diplomatic and
financial negotiations.-*-'
Bunau-Yarilla communicated by letter with Hay, and,
in fulsome phrase,
told the aged secretary that Panama:2
In selecting for its first representative at Washing­
ton a veteran servant and champion of the Panama Canal,
m y government has evidently* sought to show a loyal and
earnest devotion to the success of that most heroic
conception of human genius as both a solemn duty and
the essential purpose of its existence.
The "selection” of which M. Bunau-Yarilla speaks, was
in accordance with instructions given Dr. Amador by Bunauvarilla himself.^-
The prospect of a French engineer waiting
in N e w York to be made the first diplomatic agent of a twoand-a-half day old Central American republic to the United
States government,is a situation fraught with fictional
possibilities.
4
Bunau-Yarilla’s letter to Hay was dated November 7*'
On November 11, P a n a m a ’s new envoy addressed another letter
to Hay, this time from Washington, in which he asked the
Secretary of State to secure an appointment for him with
^ L o o . cit.
■2 i b i d . , p f
J0240*
*# Bunau-Yarilla, o p . c i t . , p. 215.
-'4k
Foreign Relations of the United S t a t e s , p. 240
16
President Roosevelt in order that he might present his letters
of credence.1
Loomis answered.for Hay-and told Bunau-Yarilla
that President Roosevelt would receive him at 9:30 in the
morning, November 13.2
Meanwhile, Ehrman wired Hay on November 10, that
Frederico Boyd and Doctor Amador were leaving immediately for
Washington in order” ...to arrange in a satisfactory manner
to the United States the Canal treaty and other matters.”®
Pablio Arosemena,
legal adviser, was following by a later
steamer.^"
The trip by steamer from Panama to New York takes
usually either six or seven days, depending on the vessel.
Thus, while Bunau-Yarilla was presenting himself to President
1
P*
245 •
2 Loc. cit.
3 I b i d . , p. 235.
4 A wi^e,, Ehrman to Hay, on November 11, Stated that
tfI am officially informed that Bunau-Yarilla is the author­
ized party cto.Makd treaties! atBo>yAda.%nd cAmador ihaye eother
..
missions and are to assist minister.”
(Foreign Relations of
the United States,
1903, p. 236).
Actually, when BunauY a r i l i a T e a m e d Amador was coming to v/ashington, he cabled
Arango, member of the junta, while Amador was at sea, de­
manding full plenary powers under the implied threat that
if they were not granted needed credits would be withheld.
Arango" granted this request.
Ehrman* s understanding of the
matter was erroneous since Amador and Boyd carried a letter
of instructions by whichBunau-Yarilla w a s ” ...to proceed
strictly in accord with them.” (quoted in Miner, op. cit.,
p. 375).
17
Roosevelt on the morning of November 13, Amador and Boyd
were on the high seas about half-way to N e w York.
To Bunau-Varilla(s flowery speech President Roosevelt
responded in the following words:1'
In accordance with its long-established rule, this
government has taken cognizance of the act of the ancient
territory of Panama in reasserting the right of selfcontrol and, seeing in the recent events on the Isthmus
an unopposed expression of the will of the people of
Panama and the confirmation of their declared indepen­
dence by the institution of a de facto government, re­
publican in form and spirit, and alike able and resolved
to discharge the obligations pertaining to sovereignty,
we have entered into relations with the new republic.
The morning after Bunau-Varillats reception as first
envoy of the Republic of Panama, Mr. Hay issued a circular
to all diplomatic representatives of the United States,
stating t h a t :
The President yesterday fully recognized the Republic
of Panama and formally received its minister plenipoten­
tiary.
You will promptly communicate this to the govern­
ment to which you are accredited^..
william I. Buchanan was named first minister of the
United States to Panama.
Mr. Buchanan presented his letters
of credence to the j u n t a , the cabinet, and the supreme court
on Christmas Bay, 1903.^ -
The ceremony was attended by the
•1 Foreign R e l a t i o n s , P* 247.
^ I b i d . . p. lxxxiii.
" 5 I b i d . , P. 690
18
consular corps in Panama, with the exception of the consuls
of Central American states, and those of Argentina and Chile.^
To the fulminating government of Colombia,
the posi­
tion of the Untied States was made known through Minister
Beaupre, who communicated to the Colombian government a cable
from Secretary Hay which was dated November 6, Hay said that:
*2
the people of Panama having by an apparently unanI,-\\:.
ikous movement, dissolved their political connection with
the Republic of Colombia and resumed their independence,
and having formed a government of their own, republican
in form, with which the government of the United States
of Amerida has entered into relations, the President of
the United States, in accordance with the ties of friend­
ship which have so long and so happily existed between
the respective nations, most earnestly commends to the
government of Colombia and of Panama the peaceable and
equitable settlement of all questions at issue between
them. He holds that he is bound, not merely by treaty
obligations, but by the interests of civilization, to
see that the peaceable traffic of the world across the
Isthmus of Panama shall not longer be disturbed by a
constant succession of unnecessary and wasteful civil
wars.
No nation was willing to take up the challenge implicit
in this document, and the wrongs done Colombia, real or
fancied, were to go unredressed for the time being.®
Colombia was faced by a fait accompli.
Panama had achieved
de facto recognition in tjwo and one-half days;
de jure
recognition in ten days.
1 Loc.
cit.
2 Loc.
cit.
3 Difficulties between the United States and Colombia
were settled under the treaty of 1921.
CHAPTER II
THE TREATY OF 1903
Time was of the greatest importance in drafting and
signing the Treaty of 1903.
Probably no diplomatic instru­
ment of the importance of the pact of 1903 has ever been put
together and signed within such a short period of time.
If
it is stipulated that speed was of prime importance from the
point of view both of the new republic and the United States,
then it is futile to criticize the pact, for a treaty of
twenty-six articles that will stand the test of time can
hardly be drafted in four days.
In point of fact, Bunau-Varilla had been mulling over
various provisions of the Treaty in his mind for a period of
several weeks.1
Whether Secretary of State Hay had similarly
prepared himself in advance is unknown, but he proved an able
collaborator for the impetuous Bunau-Varilla.2
Bunau-Varilla was received as minister of Panama by *
President Roosevelt on November 13.^
On the 13th, Hay sent
1 Bunau-Varilla, op. cit., p. 252.
2
Miner states that Bunau-Varilla^ part in drafting
the treaty was larger than Hay gave him credit for in his
letters on the subject (Miner, o p . c i t . p. 375).
3
C f . ante., p. 13.
the minister a copy of the suggested treaty. 1
Bunau-Varilla
found much to criticize in the draft,£ and prepared a treaty
of his own.
On the morning of November 17, both the Hay and
Bunau-Varilla drafts were sent to the State Department, from
whence emerged in the early evening of November IS the final
draft of the treaty.
That evening Hay and Bunau-Varilla
signed the treaty.
With the ink on the pact not yet dry, Bunau-Varilla
hurried from the Hay residence, where the treaty had been
signed, to the railway station to meet .Amador and Boyd, who
had tarried in New York for a day or two before leaving for
Vfashington.
Amador, when told of the signing,
"...
nearly
A
swooned on the platform.”
To complete his work Bunau-Varilla
now cabled the third member of the junta. Arango, that the
treaty should be signed without delay and without the slight­
est alteration.
Accordingly, the provisional government gave
its solemn approval to the pact on December 2 .5
After a
stormy debate, the United States Senate ratified the treaty,
66
to 14, on February 23, 1904, and it was proclaimed three
Bunau-Varilla, op. cit.. p. 252.
o
Miner, op. cit.. p. 375.
® R. Miner and McCain agree that the text of the treaty
was that of Bunau-Varilla, and that Hay made only slight al­
terations before signing the pact (McCain, 0£. c i t ., p. 17.,
and Miner, op. cit., p. 375).
^ Miner, ojd. cit.. p. 37S.
5 Loc. cit.
21
days later *1
In a consideration of the provisions of the treaty, it
is well at the outset to emphasize that Panama was called into
being to enable the United States to dig the Panama Canal.
Such was the understanding of Bunau-Varilla, and he gave ex­
pression to this thought on many occasions.
In the construc­
tion of the Canal the business interests on the Isthmus saw a
golden opportunity to secure incalculable financial benefits
from the expenditures which the United States would make in
the course of building the waterway.
The rejection of the
Hay-Herran treaty by the Colombian Senate in the summer pre­
ceding the revolution was the overt act which brought into
the open the very considerable discontent that had been felt
on the Isthmus over the way Colombia habitually treated the
province of Panama.
The republic created by the revolutionists
while nominally enjoying the sovereign attributes belonging to
any state was actually no more than a protectorate of the
United States.
There were two important reasons why Panama did not,
and in fact could not, enjoy full sovereignty.
In the first
place, Colombia was quite able, if the United States did not
prevent it, to subjugate Panama and return the rebellious
province to the union of Colombian states.
1
« p. 384.
Second,
it must be
22
remembered that the reason for the being of Panama was the
Canal.
The United States, after a lengthy a n d unsatisfactory
diplomatic duel with Colombia, was not disposed to create on
the Isthmus a new political entity which would thwart the e f ­
forts of the United States in the same w a y that Colombia had
done.
To avoid these two undesirable possibilities, the
Treaty of 1903 was drawn in a manner to plainly put Panama in
leading-strings to the United States.
Thus, the Treaty of
1903 was not a bilateral agreement between two sovereign
powers of equal political standing.
Rather, it was the type
of agreement that may be found existing between a major state
and a protectorate of the first class, such as, on the one
hand, Great Britain, and on the other,
the semi-independent
native state of India.
B y article I of the Treaty, the United States guaranteed
the independence of Panama.1
Article II granted to the United
States a strip of land, ten miles wide and extending across the
Isthmus from one ocean to the other,
was to be built.
through which the Canal
The United States was also granted the right
to take such other lands and waters outside this zone as might
be found necessary for the construction and maintenance of the
Canal. ''
The United States, b y implication at least, was made
1 Miller, op.
text of the Treaty.
2
' Loc. cit.
cit., Appendix V.
This gives complete
23
the sole judge of what additional lands might be necessary
for the Canal, and no time or territorial limit was placed
upon the right so granted.
It goes without saying that the
stipulations of article II were an infringement of Panamanian
sovereignty.
No state whose lands are subject to condemna­
tion and seizure by another power,
(i^e., who cannot know from
day to day what lands are within the state and what lands are
not), can be called fully sovereign.
The stipulations of this
article were to be a fruitful source of trouble.
Article VII^’ gave the United States the right to
maintain public order:
. . . in the cities of Colon and Panama and the ter­
ritories and harbors adjacent thereto in case the
Republic of Panama should not be, in the judgment of
the United States, able to maintain such order.
The exercise of police powers within the territory of a state
is one of the fundamental attributes of sovereignty and the
impairment of this right, as contemplated by the provisions
of article VII, is an obvious limitation upon Panama*s free­
dom of action, even in internal affairs.
Other important provisions of the Treaty gave the
United States the concessions and properties of the New Panama
Canal Company and the Railroad Company.
The United States
agreed to pay Panama $10,000,000 for the "Rights, powers and
Ibid..Appendix V
24
privileges granted in this convention. . . .
Panama was
to receive an annuity in the amount of ”250,000 beginning
nine years after the ratification of the Treaty.^
Panama
was granted the right to use telegraph and cable facilities
in the Canal Zone, while the United States received a monopoly
of rail and water transportation across the Isthmus.
Special
arrangements were made for sanitary facilities in Colon and
Panama, and the sovereignty of the two cities was regulated
by other provisions.
Another article covered the harbor and
wharfage facilities of Colon and Panama.
While Panama at all times maintained the fiction of
full sovereignty, the guarantee of independence, the right to
expropriate land by unilateral action, and the police powers
granted, all duties and privileges assumed and enjoyed by the
United States, make it impossible to agree with the Isthmians
that they were a free and independent people.
American protectorate.
1
Ibid., Appendix V.
•2 Loc. cit.
Panama was an
CHAPTER III
EARLY DISAGREEMENTS
The first troubles between the United States and
Panama arose over commercial matters*
On June 24, 1904, Mr.
Taft, then Secretary of War, opened the Canal Zone to the
trade of the world .1
In interpreting the terms of the Hay-
Bunau-Yarilla pact which gave the United States full sover­
eignty over the Canal Zone, the government in Washington had
established ports of entry, postoffices, a customs house and
other commercial adjuncts in the Zone, and a tariff schedule
similar to that in force in the United States was published .2
Cristobal, on the Atlantic side, and Anconj- on the Pacific
side, were designated ports of entry.
The business men of Panama protested.
To them the
Canal Zone had been created for the construction of a canal
alone.
Such construction did not in any way involve making
the Zone a scene of ordinary business enterprise.
At the very
outset of Panama-United States relations this issue was joined.
The United States, at that time, adopted the attitude which
it has ever since maintained, namely, that this government had
by the pact of
1
2
1903
achieved full and complete sovereignty
McCain, o£. cit., p. 23.
Loc. cit.
over the Canal Zone, a n d to do w i t h i n that area as it wished
as if the territory in question was a part of the United
States.
The Panamans, for their part, were soon to evolve the
theory of "limited sovereignty."
This theory, which years
later was to receive such an able exposition before the League
of Nations by the Panaman delegate to the League, held that
the Canal Zone had been granted to the United States for the
sole purpose of building the Canal.
In connection with the
Canal the United States exercised rights of
sanitation,
. . maintainence,
construction and defense," -1-but these functions
did not include all of those powers which a fully sovereign
owner would exercise.
Panama had, so this theory goes, re­
served to herself certain rights which gave to the Zone a
sort of dual control.
Upon this theory, Panama was later to
justify her alliance with the United States, the Panamans
holding that in joining the United States in defending the
Zone she was only defending her own territory.
The problem is one to confound an authority on inter­
national law.
Its importance lies in the different conceptions
which Panama and the United States held as to the relations
which they each enjoyed w i t h regard to the Canal Zone.
It was
a clevage over a fundamental concept as to the status of the
Zone, and because of this difference it was possible for the
1 Miller, o£. cit., Appendix Y.
27
two countries to wrangle for years.
Like two persons talking
about entirely different subjects, the United States and
Panama could reach no agreement since they differed as to the
very basis of their quarrel.
compromis was: possible.
In arbitral terminology, no
It was a most unfortunate contretemps,
and from the beginning of our relations with Panama, it put
all understandings of a political nature upon an unsure founda­
tion.
To Panamans protests, Mr. Hay, on October 24, 1904*
made reply.
He stressed the sovereign rights of the United
States in the Canal Zone ,1 thus enunciating for the first
time the principle which the United States was ever to uphold
in coming struggles.
Mr. Hay suggested by implication that a
reading and understanding of the pact of
1903
was desirable,
and that if the Treaty was interpreted in accordance with the
plain English used in its composition it would be seen that
the Canal Zone was completely under American sovereignty, and
from that it followed that it was also within the economic
sphere of the United States.
Further, he intimated to the
Panamans that they were no longer dealing with the New Canal
Company, but were in fact, negotiating with a sovereign state.
In June of 1904, the limits of the Canal Zone had been
provisionally set through an agreement signed by the governor
1
McCain, o£. cit., p. 24#
28
of the Canal Zone and the Panamanian Secretary of State.1
This document was the first diplomatic instrument signed by
the two countries since the conclusion of the Treaty of the
previous Pall,
Under the agreement, temporary boundaries
were set up, especially with regard to the cities of Panama
and Colon.
Maps accompanied the pact to show more clearly
the lines drawn.
Special agreements, drafted from time to
time, were to delimit the ”auxiliary lands of waters outside
the Canal Zone,”
thus making early use of the latter portion
of article II of the Treaty of 1993.^
The Canal Zone author­
ities were given the right, previously granted in paragraph
II of article VII of the pact of 1903, of employing citizens
of Panama on construction work in the Zone.^
To placate the Panamanians, Taft, then Secretary of
War, accompanied by a large entourage, went to Panama in
November, 1904.
1
The jovial statesman was well received in
67th Cong., 4th Sess. Senate Poo. Wo. 348, Vol. Ill,
P. 2754.
2
Ibid.. pp. 2753-2754.
3
Ibid., p. 2754.
4
The word ntemporary” is found liberally used in this
document, which after all constituted no more than a modus
vivendi. The importance of the agreement lies in the fact
that it evoked the first construction and interpretation of
the Treaty of 1903.
The agreement shows a literal rendering
of the 1903 pact, in accordance with the theory held by the
United States.
29
the southern republic and spent some days in drafting and
signing an executive agreement which he had been empowered
by the president^ to execute.
This order, dated December 3,
1904, limited the importation of goods into the Canal Zone to
those required for the construction of the Canal and the food,
clothing, medicines, et cetera, required by the personnel
engaged on the project .2
Thus the general commerce of the
Zone was brought to an end.
The order was not to be opera­
tive unless Panama did certain things.
Panama had to yield
complete jurisdiction in the matter of sanitation and nuartz
antine in the waters of the ports of Panama and Colon. Panama had to agree to the enforcement of the provisional
limitations of the agreement of June 15, and a currency
agreement, then pending in Washington, was to be put in effect.
The United States, for her part, made concessions regarding
the importations of Panama goods into the Zone, agreed to
build and maintain certain roads, and granted certain port
* and wharfage facilities.
The United States also agreed to
build and maintain a hospital for lepers and the insane to
which Panamans would be admitted with the government of the
1 67th
Cong., 4th Sess. Senate Doc. No. 348. Vol. XXI,
P. 2757.
“2 Ibid.. p. 2758.
p.
-3
2760.
67th Cong., 4th Sess. Senate Doc. No. 348. Vol. Ill,
republic paying a small fee f or each patient.-1'
The postal
services in the Zone were reorganized to give Panama some
revenue.
The United States postal authorities were to buy
Panama stamps, surcharged with a Canal Zone marking, at 40
per cent of their face value.
These stamps were to be used
to frank mail within the Zone and from the Zone to outside
points, United States postal rates applying .2
The last article of this executive order should be
3
given in full;
The operation of this executive order and its en­
forcement by officials of the United States on the
one hand, or a compliance with and performance of the
conditions of its operation by the Republic of Panama
and its officials on the other, shall not be taken as
a delimitation, definition, restriction, or restrictive
construction of the rights of either party under the
treaty between the United States and the Republic of
Panama.
It will be seen from this that the United States re­
garded the agreement as a temporary expedient, drafter on the
one hand to satisfy the Panamans in commercial matters, and at
the same time used as a lever to force compliance from the
Isthmians on certain matters that involved the Canal Zone.
It
was, in no way, as the final article of the agreement so
clearly states, a surrender, delimitation, or permanent change
1
P- 2761.
Loc. cit.
31
in the basic Treaty of 1903 •
A second executive order, dated December 6, 1904, re­
moved the unintended disability on goods destined for Panama
which the non-entry proviso of
December 3 imposed.^
Article I of the order of
Thus goods accompanied by consular in­
voice of the Republic of Panama could be landed at Canal Zone
ports, en route to Panama.
could be landed.
Also goods intended for the Zone
Panama customs duties had to be paid.
The-
free transit of persons and the export of goods from Panama
through the Zone and the terminal ports thereof, were per­
mitted.^"
A third executive order, dated December 28, 1904, was
unilateral in character and revised the customs service and
the carrying out of its functions .3
Wot satisfied with the restrictions already imposed
upon the commercial activities in the Zone, an executive order
of January 7, 1905 followed by little more than a month the
sweeping order of December 3.
The latest executive order went
a step further in protecting the merchants of Panama.
Before
goods could be admitted to the Zone, they had to be certified
1
PP.
67th Cong., 4th. Sess. Senate D o c . Wo. 348. Vol. XIX,
2763- 2764.
2
Loc. cit.
3
Ibid., p. 2764.
32
by an official as being needed for the construction or ser­
vices of the Canal, or for the use of persons engaged in the
construction of the C a n a l . T h e
various agencies which were
to have this power of certification were listed, as were
"household" goods which might be brought into the Zone by the
Canal personnel.
Pinally, personnel who are "natives of
tropical countries" were excluded from the benefits of the
commissaries. Panama was warned that "Should it develop here­
after that merchants charge prices in excess of legitimate
profits,
or practice other extortion, the United States . . .
will supply its commissaries with such staple articles as are
required and desired by the inhabitants of tropical countries.
It is well to summarize at this point.
In the first
few years of Panama’s existence as an independent state, the
Isthmians found as their chief complaint the economic compe­
tition of the Canal Zone.
This competition, for a period of
a year or so, was that of one full-fledged commercial entity
against another; later the emphasis of complaint shifted
against the commissaries maintained by the government in the
Zone.
How these complaints were met has been shown in the
1
P. 2765.
2
67th Cong. 4th Sess. Senate Doc. No. 348, Vol. Ill,
Loc. cit.
33
executive orders.
The United States was principally concerned
with securing the limits of the Zone and making such arrange­
ments as were necessary for carrying on in an efficient manner
the work of digging the Canal.
Of common interest to both
countries, with the emphasis first by one protagonist and then
by the other, was the use of ports and harbor facilities, the
postal system, customs services, and facilities and general
measures of sanitation.
It'may be safely said that the Pana­
mans were, on the whole, well pleased by the results achieved
by the Taft agreements.1
Of the minor questions that arose to vex the relations
of Panama with the United States in the years before the First
World War, two are worthy of note.
ter of elections in Panama.
First of these was the mat­
There is ample material easily a-
vailable to make possible a formidable volume on the role of
the United States in Panamanian elections.
Despite the size
of the problem, it is pertinent to inquire into the general
attitude of the United States toward those elections.
Inso
far as elections represent one of the prime internal concerns
J
of a state, they are important as an illistration of the atti­
tude of the United States toward Panama’s internal economy in
those matters which in no way impinged upon the Canal.
So far
as her foreign affairs were concerned, the United States watched
'**■ One must always except a small but articulate group
of malcontents, which is to be found in any country.
34
Panama with an attentive eye; domestic affairs linked in any
way to the Canal commanded the combined attention of the
S’tate, War, and Navy Departments, as will be developed later.
Panamanian activities not included in these two classes of
activities were of no concern to the United States, and this
government told Panama in clear fashion that these matters
were, for the disposition and control of Panama alone.
In 1906, the Liberal party in Panama approached the
United States through Blihu Root, Secretary of State, charging
a coming election would be unfair and would be irregularly con­
ducted.
The Liberals wanted to know if the United States
would guarantee Tt...public order and constitutional succession
in this R e p u b l i c .
Root, through the American minister in P a n a m a , told the
Isthmians that the treaty of 1903 did not relieve Panama of
the responsibility of maintaining public peace, nor was the
onus of such maintenance thrust on the United States.
United States refused to take sides in any election,
The
since
the correct operation of election laws was a prime requisite
of a well-ordered state.^
The Panaman minister in Washington told Hoot that his
declaration had "...created a pleasing impression among the
people of Panama, and absolutely assured the maintenance of
McCain, o£. c i t . , p. 64.
^ Foreign Relations, 1906, Vol. II, p. 1£03-07.
peace in the Republic of Panama.tT^'. The minister was too op­
timistic, for in the years ahead the United States was called
upon more than once to supervise elections on the Isthmus.
The second question was that of compensation for lands
seized.
Under Article VI of the treaty of 1903, the United
States had agreed to compensate owners of land and other prop­
erties in the Canal Zone where such land and properties had
been taken over by the United States in the course of digging
the Canal.*5 Article VI provided for a joint commission, .ap­
pointed by Panama and the United States, to determine the com­
pensation due the owners of the confiscated property.
mission,
A com­
consisting of two members from the United States and
two members from Panama, held sessions during 1907, but failed
to reach an agreement.^
Article XV of the treaty of 1903
stipulated that in' the event of disagreement between members
of the commission appointed under the provisions of Article VI,
the two governments were to appoint an umpire, who, as fifth
member of the commission, would cast the deciding.vote.4
Early in 1908 Panama asked that the provisions of
Article XV be made operative and the fifth member of the com-
1 Foreign R e l a t i o n s . 1906, Vol. II, p. 1207.
M i l l e r . op. cit., Appendix V.
3
EoreigflfRe1a t i o n s . 1908, p. 670.
L o c . cit.
36
mission be appointed.^
The Panaman minister in Washington
was empowered to consult with.the American government over the
question of an umpire.2
Toward the end of May, a conference
was held in Panama which was attended by Secretary of War Taft,
the United States minister to Panama; Arias, .Panaman foreign
secretary,
and a number of legal advisers.
At this meeting, it
was decided that the commissioners should have the authority "...
to decide the controversies as to rights that may arise from
whose suffered damages" with reference to titles of possession
to lands involved in the claims.
The commission was thus in­
vested with certain judicial powers.
The two sets of commissioners having been appointed,^
Panama magnanimously proposed that Mr. Denby, one of the
American commissioners, be made umpire.
The commisson labored
through a good part of the summer, delivering its findings on
August 8.
The award covered fifteen parcels of land and estat­
es, comprising about 86,000 hectares, and appraised by the
commission at a total of $204,980.6
The American charge was
^ Foreign Relations , 1908, p. 670.
^ U o c . cit.
3
PPv 672-73. .
4 I b i d .'. p. 674.
® I b i d . , p. 675.
6 Ibid. , pp. 674-75.
37
able to report to tile State Department that:^
It may not be amiss to state that the final result
reached in these long-pending claims has made a good
impression both on the Panama people and the Americans
resident here and is very favorably commented on as
an evidence of the generous justice of the American
government.
^ ffQPQign R e l a t i o n s » 1908, pp. 675-77.
CHAPTER TV
RAILROADS AND WIRELESS
No better proof of the impairment of P a n a m a ’s sover­
eignty is to be found than in the correspondence and end
result of the railroad controversy, which began a few years
before the First World War and continued until after the out­
break of hostilities.
The Panama government at times gave
signs of rebelling against the dictation from Washington, but
in the end was to give w a y on every point.
The victory was
not to be completely one-sided, however, as the United States
finally consented to Pa n ama’s floating a bond issue in the
United States, with a portion of the Canal annuity hypothecated
to service the interest and amortization of the bonds.
Panama sought development of her northern provinces,
particularly the province of Chiriqui on the Costa Rican border,
and to that end wanted a railroad built that would link Panama
with David and L a C o n c e p c ion, important points in the north.
This ambitious program is not fulfilled, even today, but certain
short lines have been built in the north, leading from ports
to internal towns.
An extensive concession, comprising both lands and rail­
road right-of-way, was granted to an Anglo-German syndicate
39
headed by one Augusto Dziuk in 1910.^ When Dziuk sought a
revision of this concession in order to gain more lands and
right-of-way, Panama seized the opportunity to cancel the con­
cession.2 This cancellation took place on March 5, 1912.
The
ostensible reason was that Dziuk had failed to live up to the
terms of the concession, but the American minister in Panama
was advised by the foreign secretary that, the real reason for
Panama*s. action was n . . * his g o v e r n m e n t s opinion that this
would be agreeable to the American government".®
In the early part of 1913, Panama granted a tentative
railway concession to an American, Basil Burns Duncan, who was
singularly inept financially and seemed entirely unable to carry
through an enterprise of the magnitude envisioned by the con­
cession.
Mr. Dodge, the American minister, went post haste to
the foreign office where he was assured that before the govern­
ment of Panama gave legislative approval to the contract,
".
. . the Government of the United States would be given an
opportunity to examine it".4 A copy of the text of the conces­
sion was sent to Washington by Minister Dodge, and the State
Department turned the document over to the War Department for
1
Foreign R e l a t i o n s , 1912, p. 1195.
2 I b i d . , p. 1197.
3 I b i d . . p. 1198.
4 Foreign R e l a t i o n s . 1913, p. 1085.
40
the latter to ascertain the w . . . desirability from a stra­
tegic viewpoint of the railroad". 3Lest the wrong impression be given, it is essential
to point out that at this point Panama was acting in accord­
ance with treaty obligations.
A treaty in 1867 between Colom­
bia and the Panama Railroad company,
the trahs-Isthmian line,
provided that no other lines could be built in Panama without
the permission of the railroad, company.2 The Panama Railroad
company was acquired by the United States by virtue of
Article VIII of the treaty of 1903.3
, A commission consisting of the American minister, the
chief engineer of the Panama Railroad company and a member of
the Isthmian Canal commission met in Panama to examine the
Duncan concession and disapproved the grant on the ground that
the terms of the concession were too vague, and the proposed
line would constitute a strategic menace to the Canal.
4
Mr.
Dodge was then able to cable Washington on February 24 that the
" Minister for Foreign Affairs informs me that in view of the
objections of the Government of the United States, the Duncan
railway contract will be withdrawn from the assembly".
Mr.
Dodge was instructed by the State Department to express the
1 Foreign R e l a t i o n s , •15-1 3y
p • 3108 5.
^ Foreign R e l a t i o n s , 1914, p. 1031.
3 Miller, 0 £. c i t . , Appendix V.
^ Foreign R e l a t i o n s . 1913, p. 1088
5 •ibia.Q-fe.io9i.
41
appreciation of the United States at this action of the Panama
government
But Panama was champing at the bit*
In October of 1911,
two bills dealing with financial matters were passed by the
National Assembly.
The first of these bills forbade the cong
traction of debt in order to build the Panama-David line.
The second measure allowed the' government to use all of the
funds remaining from the #10,000,000 paid by the United States
for the Oanal concession to build the road.
Of the original
purchase price Panama had used #4,000,000 for governmental
expense in Panama.
The remaining #6,000,000 had been invest-
ed, at the insistence of the United States, in N e w York City
real estate, the funds to remain permanently invested in the
United States in order to stabilize both the Panaman government
and the currency of the republic.
The defeat of the Dziuk and Duncan concessions did not
dampen Panaman ardor.
On February 22, 1913, the National
Assembly passed a bill which permitted the government to
nt
borrow for railway construction purposes.
The American M i n ­
ister secured the reluctant promise of the Panaman president
that neither the $6,000,000 invested in the United States, nor
the Canal annuity would be used for the purpose.4 The Secretary
1 Foreign R e l a t i o n s , 1913, p. 1091.
^ Foreign R e l a t i o n s , 1912, p. 1188.
3 Qj). c i t . , p. 1100.
4 L o c . cit.
42
of State corroborated the action of the American minister and
indicated that the' United States was still unwilling to con­
sent to the pledging of any portion of the Canal annuity.
The annuity was to be joined to the #6,000,000 to create a
” . . . fund which would assure a permanent revenue for the
maintenance of a stable government on the Isthmus’*
Panama went ahead on her own.
On February 4, 1914,
Panama signed a contract with Hebard and company for the
construction of a railway in the province adjoining Costa
Rica, the line to cost an estimated #1,500,000.
Minister
Price advised the State Department that Panama intended to
have ,T Details of bond issue left for consultation with State
Department.
It is contemplated incumbering the income from
six million loan in N e w York City” .
The Secretary of State
replied at once that the United States objected to the con­
tract on three counts.
First, that it contravened article
V of the treaty of 1903; second, that provisions of the con­
tract were objectionable from a strategic point of view; and
finally,
that it involved pledging the Canal annuity or the
p
six million dollars invested in N e w York.
Minister Price was
instructed to consult General Goethals,
chairman and chief
engineer of the Canal commission, on the strategic aspect of
the railroad.
^ Foreign R e l a t i o n s . 1913, pp. 1102-1103.
2 Foreign R e l a t i o n s . 1914, p. 1030.
43
Two days later, Price reported that General Goethals
found nothing objectionable in the contract from a strategic
point of view,'*’ and that Panama did not contemplate the pledg­
ing o f ,her two funds but would finance the project through a
bond issue.
Matters dragged during the spring while the State Dep­
artment and Panama negotiated.
On June 29, Secretary of State
Byyan advised the Panaman minister that:
2
the Department will approve an issue by your government of
Panama Government five per cent, bonds to the amount of
$3,000,000, provided that adequate provision be made for
the retirement of these bonds within 30 years from the
date of issue; and provided that only $750,000 of that
amount shall be delivered at this time at a price not
less than ninety-seven per cent, of the par value and
that future deliveries of the issue shall be made with
the approval of the. Government of the United States only
when additional money is required for such enterprise.
The foregoing quotation from the correspondence of the
State Department leaves any comment on the sovereignty of
Panama in the year 1914 superflous.
Permission for the rail­
road, which far from being a line from Panama*to David was
merely a twenty-eight mile line from the port of Pedregal to
B o q u e t e , with a branch to La Concepcion, a secondary line
twenty-three miles long,
3
was obtained from the War Depart­
ment acting as nominal holder of the shares of the Panama
Railroad company.
^
Foreign R e l a t i o n s , 1914, p. 1031.
2 I b i d . p. 1032.
3 I b i d . p. 1031.
44
The National City bank of N e w York offered t'oct.ake
-the railroad bonds at a discount of three per cent., the
bonds to bear five per cent interest and to run from fifteen
to thirty years.
Panama accepted this offer on the recommen­
dation of President Porras who,
ional Assembly,
in a speech before the N a t ­
characterized it as the best offer Panama could
hope to obtain.'*’ In November, the State Department approved
the trust indentures between Panama, on the one hand, and the
F a r m e r s ’ Loan and Trust company of N e w York and William Nelson
g
Cromwell, as joint trustees, on the other.
The State Department approved the hypothecation of as
much of the income from the six million dollars invested in
2
N e w York as was necessary to service the loan. -The American
4
minister in Panama was told to:
Discretely inform Panama Government that Department ap­
proval of loan based on hypothecation of income of six
million dollars permanently invested in N e w York, was
based on the understanding that this money should be used
only for the building of railroads in Province
of
Chiriquiz.
In 1916 Panama secured permission to build another
^ Foreign R e l a t i o n s » 1914, p. 1033.
2 I b i d ., p. 1034.
3 I b i d .. p. 1032.
4 I b i d ., p. 1034.
45
branch line, this to run from La Concepcion toward Chareo
Azul.1 Of the original issue of $3,000,000 approved for the*
first line, Panama had used only $2,350,000, and the State
Department readily approved an issue of $400,000 against the
p
unissued balance."' The State Department approved use of part
of the N e w York investment to service this portion of the loan.
Panama was not allowed control of her own wireless com­
munications.
In June,
1913, Panama granted to the United
Fruit company a franchise for a wireless station in Colon,
and in August the Marconi company of America sought another
4
wireless franchise.
In 1911, the Joint Board of the Army and Navy had urged
that the president of the United States be empowered to reach
an agreement with Panama over wireless problems.
The fran­
chise given to the United Fruit company and the activity of
the Marconi company stimulated the War Department to advise
the State Department that the effort of the latter company
should be frustrated, and an agreement should be reached with
Panama "•
. . whereby private wireless installations should
Foreign R e l a t i o n s , 1917, p. 1181.
2 Loc. c i t ♦
3 I b i d ., P* 1182.
4 Foreign R e l a t i o n s , 1914, p. 1036.
5 Loc. cit.
3
be prohibited from the Zone and from the territory of
Panama”
The Secretary of State responded that since 1910 Pan­
ama had given frequent oral assurances that it would permit
no further wireless installations in its territory? . . with­
out the consent of the United States” .^ The State Department
agreed that a definite undertaking by Panama was wanted, and
would begin negotiations to that end.
The Army and Navy de­
partments were consulted as to provisions of the projected
agreement which they would find desirable.
made short work of the question.
The Joint Board
The Board recommended that
the United States should have a monopoly of all radio com­
munication in Panama and the Zone, that ships were not to
use their radios except in certain special cases while within
the territorial waters of Panama, that Panama land telegraph
system should be hooked up to the Zone system, that Panama
should sign the London Radio-Telegraphic convention,
and,
last, that the United States should have the right to take
over all existing private stations whenever it should elect
to do so.
3
•
The Army and Navy authorities thus sought wireless
control on the ground that they could not adequately protect
^ Foreign R e l a t i o n s , 1914, p. 1036.
2 $££•
♦
3 Ibid. . p. 1039-40.
47
Panama, in accordance w ith treaty terms, unless the systems
of communication were in their hands.^
At the beginning of 1914, Panama let it be known that
she was considering establishing several wireless stations at
strategic points within the Republic.
2
The Secretary of State
was quick to instruct the American minister that he was to
inform Panama "in an informal manner", that the United States
rz
was seeking a wireless monopoly in Panama.
The American
right to demand control of wireless in Panama was based by the
State Department on Articles II, III, VI, VII, and XXIV of the
4
treaty of 1903.
All that was required was for the United
States to advance the claim that wireless control was essential
to the m a i n t e n a n c e , control, protection, and sanitation of the
Canal, and since the United States was clearly empowered by
the treaty to do whatever was necessary to secure these ends,
it followed that the right of wireless control was merely one
more adjunct to the great Canal project..
By late July, the war clouds in Europe stimulated
Panama to agree in principle to United States control, but
5
some modification of details was sought.
1 Foreign R e l a t i o n s , 1914, p. 1036.
2 I b i d . , p. 1040.'
3 I b i d .. pp. 1040-41.
4 I b i d . , p. 1042.
® I b i d .. pp. 1044-45.
By mid-August,
48
Bryan was telling Minister Price that the war in Europe was
forcing the United States to demand immediate control ” . . .
of all wireless stations in the Republic of Panama and control
(of) the radio equipment of all ships in the territorial
waters of P anama” .-*- Panama agreed at once to United States
control, but limited this control to the duration ofthe
p
European crisis.
During the next two weeks, Minister Price carried on
negotiations with Panama.
On his own account he pledged the
United States to give consideration to Panama’s request for
special handling of the question of interior telegraph lines,
providing that the decree giving the United States the desired monopoly was issued first.
by Price,
3
A few days after this pledge
the Panaman president signed the desired decree
giving permanent control of wireless to the United States.
In part the decree read:^
F r o m this date the radio-telegraphic stations fixed and
moveable and everything relating to wireless communications
in the territory and the territorial waters of Panama shall
be under the complete and*permanent control of the United
States of America; and to attain that end said Government will take measures which it deems necessary.
^ Foreign R e l a t i o n s . 1914, p. 1046.
2 I b i d . . pp. 1047-48.
3 I b i d ., pp. 1049-50.
4 I b i d . , p. 1051.
This monopoly was to become a greivance with Panama.
Agitation for repeal or modification of the decree continued
until- 1936 when Panama achieved her objective in the "Good
N e i g h b o r ” treaties of that year.
CHAPTER
V.
BACKGROUND AN D EARLY EEGOTIATIONS OF THE TREATY OF .1926
Panaman dissatisfaction with the treaty of 1 9 0 5 , .which
first resulted in the Taft executive agreements,
continued’
to grow* as Panama and the United States clashed over various
subjects in which both were interested.
The difficulties
over railroads and wireless have been noted.
ssaries or government stores continued to
troubld.
The commi­
be a source of
Toward the close of 1905, Panaraan business men,
under the leadership of President Amador, again complained about the c o m m i s s a r i e s . T h e commissaries had been closed to
to the native personnel,
that is, to those indigenous to
tropical countries, by the executive agreement of January 7,
1S05.2
A boundary convention signed on September 2, 1914,
disposed of certain problems in connection with the delimit­
ing of the Canal Zone and the cities of Panama and Colon, and
the harbolr limits of Panama and A n con.4 A n easement was given
Panama through waters of the Canal Zone for the benefit of
1 McCain,
op. c i t ., p. 226.
^ 67th Congress, 4-th session, Senate Doc. No.
Y o Y ^ I I I , p. 2765.
^LoO.
cit.
4 Ibid. pp. 2770-77
548,
51
the harbor of Colon., and wharfage facilities of the Panama
Railroad Company were extended to Panama*
.article
’ r
of this agreement stipulated that: "...this combination
shall not diminish,
exhaust, or alter any rights acquired
by them (The United States and Panama)
heretofore in con­
formity with the Canal treaty of November 18, 1903.”
This
provision gives the whole treaty a provisional character,
since
!
the boundaries drawn could,
in consequence of Article X, be
changed at any time by the United States, acting under the
power granted in the basic treaty of 1903.
Thanks largely.to the effective blockade maintained
by the A l l i e s P a n a m a * s problems in the ?forld war were not
great ones.
A n agreement of October 19, 1914., between the
United States and Panama provided t-hat.:*v
v
Hospitality extended in the v/aters of the Republic
of Panama to a belligerent vessel of war or a vessel
belligerent or neutral, whether armed or not, which is
employed by a belligerent power as a transport or fleet
auxiliary or in any other way for the direct purpose
of prosecuting or aiding hostilities, whether by land
or sea, shall serve to deprive such vessel of like hos­
pitality in the Panama Canal Zone for a period of three
months, and vice versa.
Panama.As other war problems centered around interned
Germans.
The United States eventually took charge of these
prisoners, thus relieving Panama of the burden.3
1 67th Congress, 4-th session, op. .cit.,, p . 2777.
2 Foreign R e l a t i o n s , 1S14, Supplement, p. 556.
3 McCain,
op. c i t ., p. 227.
52
The dissatisfaction with the treaty of 1903 culminated
in the request by Panama in 1915 that a new pact be drawn.
World “
w ar conditions made it impossible to carry on nego­
tiations,
In 1919 panama appointed a committee to study the
trecity of 1903 and make recommendations,2 By the end of the
following year Panama was pressing her demand that something
be done about remedying conditions.
The commissaries stood
in the foreground of causes for complaint.
Panama in parti­
cular complained about the sale of luxury or tourist goods to
ships transitting the Canal,
she also asked the return of
areas in Panama and Colon owned by the Panama Railroad Com­
pany and increased wharfage space and facilities in those two
cities. ^
P a n a m a ’s ill-will was undoiibtedly increased by an u n ­
fortunate contretemps over some lands seized by the Canal
.commission in the,.-same year.
On January 19, Lansing noti­
fied the Panaman charge that the U n i t e d ,States would acquire
a portion of the island of Taboga "for the safety and pro­
tection of the Cana 11*4 as it is the intention of this
1 McCain, Ibid., p. 226.
2 Loc.
3 Ibid., p. 227• The sale of tobacco eventin the post
exchanges~or~"the army was to be banned, if Panama got
its way.
^ Foreign Relations,
1920, p. 314.
53
government to fortify the island.
The United States promised
to adopt a liberal policy toward the land-owners who in con­
sequence of this action would he dispossessed.
To the Lansing note, the charge replied more than a
month later that in September of the previous year the Gov­
ernor of the Canal Zone had notified the President of Panama
that the United States had occupied a piece of land owned by
Panama and known as Largo Remo,
in Las Minas Bay.
The reason
given for this occupation was that it w a s 'necessary for pro­
tection of the. Canal.^
The charge protested that this action in the case of
Largo Remo was irregular since no previous notice had been
given of the intention to occupy the land.
Panama asked
suitable compensation for the dispossessed land-owners, and
that a modus operandi be reached which the United States
would use in connection with any future land acquisitions.^
That Panama v*rould like some formal document as evidence of
intention of confiscation seems reasonable.
Such action would
be a sop to the dignity of the country.
On April 30 the charg^ told the Secretary of State
that Panama would like to know what part of the island of
Taboga this government required, and asked that the requisi­
tion be held to a minimum.
1
Further, Panama considered that
*
Lo c . cit.
2Foreign R e l a t i o n s . 1920. p. 316.
54
this island did not come under the requisition privilege
contained in Article II of the treaty of 1903, the island,
not being among those definitely named in the treaty.-*-
The
Canal Zone authorities had sent a man named Genac to Taboga
to settle land claims.
Panama protested that this m a n had
consistently, been antagonistic to Panaman claims in the past,
and therefore the Isthmian government could not consider him
impartial.
Lastly, Panama charged that the Canal Zone autho­
rities had ignored the usual diplomatic channels in handling
this affair, and had in fact acted through subordinate offi­
cials and private parties.s
This wholesale blast was followed a week later by
another letter in which Panama requested that
(1) the lands
on Taboga island taken by the United States be limited to
250 hectares,
(2) that the lands be condemned only as actu­
ally needed, and (3) great consideration be shown the Tabogans, who were already greatly upset b y an attempt of the
United States to occupy the cemetery on the island.^
Shortly after this last note the Canal Zone authori­
ties were notified that Panama, by provisional decree, agreed
to the occupation of areas on Taboga, although the Panaman
government pointed out that a valid title to the lands could
not be conferred "by official communications exchanged between
subordinate employees."4
iForeign H e l a t i o n s , 1920, p. 317.
%iQC. cit.
3 l b i d . , p. 318.
^Loc. cit.
55
A few months after this Panama took formal steps
looking to the drafting of a new treaty.
The American m inis­
ter was told by the Panaman foreign secretary that Panama
sought a n e w pact, and would broach the matter formally in
Washington as soon as a new minister plenipotentiary to the
United States was appointed.^-
Informed of P a n a m a ’s inten­
tion, the State Department instructed the American minister
that:
In view of the importance of this subject the Depart­
ment desires that you report minutely any information you
may acquire relative to the modifications in the a g r e e ­
ments now In force which the Panaman government contem­
plates submitting at the time negotiations for a n e w
treaty m a y be entered into.^
Ricardo J. Alfaro was sent to'-Washington to attend the
inauguration of President Harding.
Before returning to
Panama he left a memorandum at the State Department setting
forth the Panaman position, and giving the principal grievances
which the Isthmians would like rectified in the treaty to be*'
drafted.3
The opening paragraphs of the memorandum reminded the
government of the United States that the treaty of 1903 was
signed only fifteen days after the independence of Panama was
declared and that the haste attendant upon such a feat explains:
^Foreign R e l a t i o n s . 1922, Vol.
2Loc. c i t .
3Loc. cit.
II, p. 751.
56
w h y such a document contains articles, some of which are
y a g u e , some too broad, some inconsistent, and which,
applied as interpreted by the American authorities of
the Isthmus, impart to that covenant a unilateral charac­
ter which it is impossible to admit was the mature thought
or deliberate intent of the two signatory countries.^
It is well to point out here that Panama is n o w for­
m a l l y protesting against the unilateral character of the
treaty of .1903, and that for. the first time the Isthmians
are asking that they be placed on a political'equality with
the United States and the semi-feudal pact of 1903 be done
away with*
It is more than a mere protest against specific
provisions of a treaty;
it is a request that the entire spirit
and intent, the unwritten aura, of the pact of 1903 be ended*
Panama demanded to be a llowed to bargain across the treaty
table as one major power would treat with another;
the United
States refused, although never in concrete terms, to concede
to Panama this equality*
The attitude of .the United States
was that of a s u p e r i o r 'power toward a small but exceedingly
troublesome minor state clamoring, most unreasonably, for
various concessions*
The United States refused to bargain
openly, but sought only to make a s ’few changes as possible,
and to give way only on irrelevant points, thus creating the
shadow of change while leaving the substance unimpaired.
The
next several years were to be given over to the struggle.
P a n a m a ’s objective could be gained by two means*
First,
a n e w treaty, amending and explaining the treaty of 1903,
could be drawn.
tocol in which,
The second course was the signing of a p r o ­
by w a y of explanation, the juridical scope
1I b i d .. p. 752.
57
•of each of the articles of.the Oanal treaty, about which
there were d i v e r g e n t ‘interpretations,
could be fixed*
1
The
Alfaro memorandum .then listed thirty-two points as follows:^
1*
Final determination of the lands necessary for the
construction, maintenance, operation and sanitation of the
Oanal.
2 . Aocjuisition of lands necessary for the protection
of the C a n a l .
3.
Expropriation
of lands for the protection of the
4.
Legal status of the Panama Railroad company.
Canal.
5.
Payment for water and sewerage on the lands owned
by the Panama Railroad company.
6.
Lands in the city of Colon.
7.
General taxes on Panama Railroad company lands and
industrial activities of the company distinct from the opera­
tions of the railroad.
8.
Freight rates on the Panama Railroad line.
9.
Administration of the commissaries.
10.
Sales and services to vessels going through the
11.
Marine facilities in the port of Balboa.
12.
Private enterprises in the Canal Lone.
Canal.
13.
Legalization of the invoices and manifests of
cargoes consigned to the merchants of Panama and Colon.
14.
Cemetery for the city of Colon.
15.
Maintenance of the order of depopulation in con­
formity with the Panama Canal Act.
16.
Warehouses of deposit.
17.
Customs houses in Panama and Colon for baggage
and merchandise examination.
-^Foreign R e l a t i o n s . 1922, Vol. Ill, p. 752.
2 I bid., pp. 752-761.
18.
Passports.
19.
Application of the' Volstead act.
20.
Radio communicat ions •
21.
Aerial communications.
22.
and Colon.
Sanitary jurisdiction in the cities of Panama
23*
Collection of the water and sewerage tax in the
cities of Panama and Colon.
24.
Communication between the cities of Panama and
Colon and the rest of the republic.
25.
Postal service.
26.
Money.
27.
Status and administration of the wireless stations
in the territory of the Republic of Panama owned by the
United States.
28.
Extradition.
29. Exequaturs to the consuls who exercise their
functions in the Canal Zone.
30.
Santo Tomas hospital.
31. Exercise by the officials of the United States
of the rights and privileges stipulated to said government
by the Canal treaty and the contract celebrated with the
Panama Railroad.
32.
Coastal trade in relation to Article IV of.the
Canal Treaty.
A considerable number of these
complaints were of a
trivial nature, and were obviously included in' Dr. A l f a r o ’s
list to give it an imposing bulk.
The real questions at
issue centered around the expropriation of land, the Panama
Railroad company, the commissaries and the control of wireless
communications.
59
The-.memorandum stated thatr^
The authorities of the Panama Canal maintains the
theory that they can take and occupy immediately any area
of the Republic and place it under the jurisdiction
of the United States without any more formality than
ra notice to the Panaman government that they have taken
that area as being necessary for the construction, m a i n ­
t e n a n c e , and operation, sanitation, or protection of theCanal.
Panama cannot accept such an interpretation,
since it would be tantamount to placing in the hands of
foreign authorities the absolute power of destroying the
existence of the state...such an interpretation is u n ­
acceptable and never could be intended by the contract­
ing parties...
The vagueness of Article II of the basic treaty was
criticized, and a long list of lands seized under its terms
was appended.
Relative to the taking of lands for fortifi­
cations, Panama denied such a right existed under Article II,
but was willing to enter into ai> agreement relative to such
l a n d s . 2 Likewise,
Panama wished the valuation of the requisi­
tioned lands to be based on the opinions of the United States
Attorney-General, given in 1913, that improvements made on
the lands since 1903 must be taken into consideration in
placing a fair value on the property, the value of the lands
of 1903 serving as a basic point of departure.3 Panama cited
an opinion of Secretary of State Lansing, given in 1915, on
the same point.
Foreign Relations, 1922.
2 L o c ♦ cit.
3 Ibid.,
g . -155.
vol. II, p. 753.
60
P a n a m a ^ complaint against the Panama Railroad Com­
pany was based on several points.
The Company charged a
preferential freight rate on goods destined for the commissar­
ies, the merchants of Panama paying higher r a t e s . T h e
lands
owned by the railroad in the city of Colon were held under
usufruct,
and f,were to return to Panama as soon as the Canal
treaty was approved as provided in Article VIII, and the Pana­
ma n government has claimed that right and insisted on a de­
livery of the lands • rl2 The railroad engaged in enterprises
that were not properly connected with the business of being
a common carrier.
These businesses included the renting of
lands, maintenance of stables, city express, etc.
The rail­
road paid no taxes on these enterprises since the railroad
Itself was exempt from taxes by the treaty of 1867 between
Colombia and the railroad company.
The commissaries were the oldest source of complaints.
In the Alfaro memorandum the introduction of luxury goods,
particularly tobacco, into the stock of these stores, was
bitterly criticized.
The Panamans charged that tf...the commi­
ssaries yearly import for a population of about 25,000 more
»
merchandise than does the Republic of Pahama that has 450,000
• • •
»• 3
1 I b i d . - p. 758.
2 I b i d ., p. 757.
3 3Tbid. . p. 758.
61
Ho records of* cash sales were kept in the commissaries,
and the Canal authorities were'charged with granting permits
to purchase to various persons who were in no way connected
with the Canal*
The effectiveness with w hich the goods, par­
ticularly tobacco, were smuggled from the Zone into Panama was
so great that the sale of chewing tobacco had ceased in the
republic, and the sale
of smoking tobacco, had shown an amaz­
ing decline#1
The sales to ships passing through the Canal were
alleged to be in violation of both the basic treaty of 1903
and the Taft agreements of 1904*^ Supplies to ships should be
Restricted to fuels,
according to Panama.
Closely linked to the commissary question, which in
the last analysis was only a Panaman protest against busi­
ness enterprise in the Zone in competition with Panaman m e r ­
chants, was the problem of independent business houses estab­
lished in the Zone*
Panama complained that the Canal authori­
ties had given permission to Panama business firms to move
into the Zone and then to buy from the commissaries and to
import building materials, without in either case paying any
duties to Pa n a m a •
1 hoc * c i t *
2 -I b i d * . p. 759*
3 Xbid./p. 757*
It was not until a year and a half later that the
United States took any formal action#
Panama had meanwhile
been engaged in a boundary dispute with Costa Rica and matters
had been allowed to drift#
Finally on September 1, the Stateo
Department, through Mr. Phillips, the acting Secretary of
State, asked President Harding to recommend to Congress the
abrogation of the Taft agreements#1 Phillips pointed out in
his letter to the president t h a t ;^
The Taft agreement was intended as a temporary arrange­
ment to cover the period of construction of the Canal#
As such it has served its purpose, since the Canal has for
some time been formally open to commerce.
It no longer
provides an adequate basis for the adjustment of, questions
"arising out of the relations between the Canal j£one author
ties and the Government of Panama, and it is the opinion
of this department, and, Iaam informed, of the War Depart­
ment also, that the agreement should be replaced by a
more permanent arrangement.
It should be noted that nothing was said about distur­
bing the basic treaty of 1903.
The Taft agreements had been
placed on the statute books by the Panama Canal Act of August
24, 1912,3 anct could not be abrogated except by Congressional
action.
Harding transmitted the request of the State Depart­
ment to Coolidge, president of the senate, with the request
that any action.taken by Congress should leave the exact
T 67th Congress, 2nd session, Senate Document Ho. 248.
2 Loc. cit.
3 Loc. cit.
63
date of abrogation open, since it was impossible to tell
h6 w long it would take to secure the new arrangement with
Panama* ^
The immediate effect of President H a r d i n g fs letter
was to cause a misunderstanding in Panama*
The Panaman mini­
ster told the Secretary of State that it was believed in Pana­
m a that the United States would abrogate the Taft agreement
and then go ahead and make new orders without any reference
to the rights of Panama, and that there would be no "effort
to make an agreement with Panama* !,2 i>he Secretary explained
that the Taft agreements had been given the full force of law
by the Congressional act of 1912, and that until suitable
action to repeal that act was passed it would be impossible
to-draft an y new agreement.
This explanation satisfied
the minister, Mr* A l f a r o . 3
Senator Lodge introduced a jpiht resolution on Decem­
ber 19, 1922, abrogating the T a f t agreements.*^ Lodge explained
the temporary character of the arrangements, and after
routine consideration the bill was passed and laid on the
T Loc * c i t .
2 Foreign Relations j 1922, Yol.
p # 762.
3 L o c * cit.
4 Congressional R e c o r d ,,bp. cit. Yol.
p. 664*
64, part 1,
64
p r e s i d e n t s desk for signature on February 10.3- tpwo days
later President Harding signed the bill. On October 15, Secre­
tary of State Hughes reminded Coolidge^ who was now president,
of the abrogation of the Taft agreements,
and suggested that
May 1, 1924, be set as the date of a b r o g a t i o n . ^ president
Coolidge agreed to this procedure, and the American minister
in Panama was instructed to inform Panama of the contem­
plated action,
at the same time giving Panaman foreign office
a copy of the Senate Joint Resolution by which the agreements were terminated.^
Panama criticized the action of the rfsmeriean -Oongress
as a unilateral action inconsistent with international usage
in the matter of !lcontracts of this class. fr4 and doubted the
wisdom of setting a probable time limit on the negotiations.
Further, Panama refused to recognize the right of the United
States to. terminate the Taft agreements if, on Mayl, 1924,
there was no new pact to replace the a g r e e m e n t s . 5
The United States took sharp issue with this view
of the Taft agreements..
The State Department felt-
1 i b i d ., part 4, p. 3383.
^ foreign R e l a t i o n s . 1923, ¥ol.
& Z h l d . , p- 678.
4 v I b i d . , p. 679.
5 hoed *cit .
I I 5 p. 676.
:
65
constrained to call the attention of the government
of Panama to the fact that it was not the under­
standing of this government either before or after
the negotiations preliminary to the" establishment of
the agreement that it-was anything other than a
modus vivendi to serve as a temporary basis for
settlement of difficulties outstanding between the
two governments during the construction operations
of the Panama Canal,
Pansaa was reminded that Taft, in the presence of
President Amador in the G-overnment Palace on November 28,
1904, before signing of the agreement, had said that the
projected
p a c t ^
Will continue indefinitely until the construction of
the Canal shall so affect the relations and conditions
existing as to require a new adjustment of the relations
between the two governments*
Taft was further quoted to -show that the agreements
were merely a fAodus vivendi which should bind neither party
t o ■any permanent construction of the t r e a t y . P a n a m a was
told that the United'-States reserved to itself the right of
Freedom of action as specially stipulated in section XII of
the Taft agreement,
"should it at a subsequent time desire
to withdraw from the agreement.ft^ .In closing, the State Depart
-ment
1 Ibid., p. 680.
^ ibid., p. 681.
^ hoc.
cit.
~ Foreign Relations, 1923, Vol II, p. 682.
66
censored Panama for its note, and' issued a veiled threat in
the following term;2.
The Government of the United States, relying upon the
announced intention of the Government of Panama in enter­
ing upon such negotiations to deal with the United States
openly and frankly as a staunch friend,and not to assume
the attitude of a nation whose interests are antagonistic
to those of the United States, entertains the hope that
these negotiations will not he protracted beyond the
date specified*
This note left the State Department on December 14,
1923, but in spite of this attitude the treaty was not to
be signed until July 28, 1926*
Before passing on to a consideration of the negotiatins
which resulted in the drafting of thettreaty of 1926, certain
other specific causes of friction should be examined*
Appli-
cationsof the Volstead Act was one of the complaints in the
Alfaro memorandum*
In June of 1922, Panama took the view
that the carrying of wines and liquors b y vessels of Panaman
registry in territorial waters of the United States, provided
that such liquors were kept under seal during the transit of
the territorial waters, was not a violation of the Volstead
Act or the Eighteenth amendment *2;:
To this'view Mr* Hughes, Secretary of State, replied 4
that the Supreme court had already ruled adversely on a case
that was based on the Panaman contention and that h e ,r** .could
cit*
2 Ibid., y o l * 1, 159-60
5
, P* 160-61.
67
not accept any suggestion questioning the competence of
the Congress to enact the legislation to which you refer.^"
Two years after this interchange Panama and the United
States signed a ’’liquor treaty” , in which the principle ad2
vaneed by Panama was vindicated.
This treaty, it should be
noted,, was only- one of a large number which the United States
found it advisable in the interests of international amity
to sign.
The end of 1922 found Panama attempting to assume
control of her investmentsin the United States.
A bill
introduced into the National Assembly provided that as the
mortgages on Ne w York real estate fell due and were paid,
the money was to be deposited in the National Bank of Panama
to be invested later in ’’National securities” .
Mr. Hughes
instructed the .American minister to enter an energetic pro­
test against this porposed action, and to persuade President
Porras to veto the bill if it was passed by the National
Assembly.
Mr. Hughes told the minister to remind Panama
that an early declaration of policy had pledged the funds
in,question to investment in the United States, in order
1 I b i d . p. 160-161.
2
Department of State, Treaty S e r i e s . §707.
3
Foreign R e l a t i o n s , 1923., Vol. II., p. 687.
'
68
to give stability to the government.
1
The Panamans promptly switched on a new track.
Porras
approved a road-building loan in the amount of $4,500,000,
but the real estate funds were not to be disturbed.
2
Panama
had certain roads under construction and wished to carry the
program further.
Pending the outcome of the $4,500,000
loan, the government sought an advance of $100,000 in order
3
to prevent stoppage of work then under way.
The American
minister told Secretary Hughes that the bankers were willing
4
to m a k e the loan if the State Department had no objection.
Hughes replied with a request for the names of the bankers
involved, and said that the department had not been approached
regarding the larger loan of $4,500,000.
Months later the
prospectus for the loan reached the State Department.
Mr.
Hughes, after an examination of the proposed scheme, told
Alfaro, the Panaman minister, that the Canal annuity which
in part was pledged to the service of the loan, was already
5
pledged to pay the v/ater rates of Panama. City.
What pro­
vision, therefore, would be made to care for the water rates?
1 I b i d ., p. 688.
S Lo_c. cit.
3
I b i d . , p . 689.
4
Foreign R e l a t i o n s , 1923, vol. II, p. 689.
5
I b i d . , p. 690.
69
Senor Alfaro replied that the day following the dis­
patch of the Hughes note Panama had paid her water rates with­
out use of the annuity funds, and that his government had
already signed a contract for placing the bonds necessitated
by the loan.'*'
Hughes was left with little choice, and to
an inquiry he told W. A. Harriman and company, of N e w York,
that the State Department had no objection to them handling
the loan.
2
The bonds were to bear five and one half per
cent interest, and were to run for thirty years.
The Canal
annuity was pledged in part to service the bonds.
It will be noted in connection with this bond issue
that Panama* s attitude was more independent than that shown
a few years before, and the whole transaction was consumated
within what, for Panaman affairs, was a very short length
of time.
Ibid., p. 693.
2
I b i d . , p. 694.
CHAPTER VI..,
THE TREATY OE 1926
The techniques of drafting treaties vary considerably,
depending upon the questions- at issue, both as to number and
importance, and the willingness of either or both parties to
reach an early understanding.
P a n a m a ’s long list of griev­
ances, and the attitude of the United States that it was
dealing with a small and annoying country, were elements which
presaged long and involved negotiations; and so it proved.
The actual negotiations occupied a number of discontinuous
periods covering in all about twenty-seven months.
That the
treaty was signed by Panama at all is undoubtedly due, as will
be developed later,
to the feeling on the part of the Isthmian
officials that it was the best pact which they could obtain
from this government.
The day of the Good Neighbor policy
was still some years away, and it is not amiss to postulate
at the outset the statement that the treaty of 1926 was drawn
in the old atmosphere which had surrounded all previous neg­
otiations with Panama.
On January 29, 1924, Panama took the initiative in get­
ting negotiations under way.
Senor Gary, foreign secretary,
asked the American minister to cable the State Department,
supplementing a request made a few days, earlier b y Alfaro in
Washington,
that the United States name a commission to nego-
71
tiate a new treaty with Panama*1 Mr. Hughes replied that the
United States was quite willing to appoint such a commission,
and would enter upon negotiations at the convenience of
Panama*2
On February 5 Panama notified the Secretary of State
that the Pa naman commissioners would be Ricardo J. Alfaro,
Eusebio A. Morales, Eduardo Chiari, with Eugenio J. Chevalier
secretary of the commission*3 Two weeks later Mr. Hughes
told the Panaman minister that the American commission would
consist of himself, acting as chairman; Francis White,
chief
of the Division of Latin American affairs; Joseph R. Baker,
assistant solicitor of the Department of State, and Edward
L* Reed, of the Division of Latin American affairs of the
4
State Department.
Negotiations began on March 17.
5
On May 28 Mr. Hughes
notified the Panaman minister that the president had issued
a. proclamation abrogating the Taft agreements as of June 1,
but that n . .* . in order to provide ample time for the
con­
clusion of the treaty negotiations, the War Department is
today instructing the Canal authorities to continue, as
heretofore,
for a period of one month, the rules and practices
^ Foreign R e l a t i o n s , 1924, Vol. II, p., 521.
2 L o £. c i t *
3 I b i d . , p. 522.
4 Loc. cit.
® Me Cain, on. c i t ., p. 233.
72
. . . in the matter of commercial operations in the Canal
Zone".^ Whether this was another veiled t h r e a t ’ to Panama, or
merely optimism cannot be said.
The negotiations were still
two years from completion.
By July President Porras was writing directly to Pres­
ident Coolidge that Panama was greatly disturbed by reports
from Washington.
President Porras told President Coolidge
t h a t :2
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 part of the Republic.
and that
Panama asi^dthat the policy outlined b y President
Theodore Roosevelt in 1904 and afterwards confirmed by
his successor and various Secretaries of State be given
expression in the n e w treaty so that she m a y find there­
in 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 HayBunau-Varilla treaty, she will ever lie under the threat
of commercial, industrial and physical ruin brough on
by the erection of a competing commercial colony in the
Canal Zone.
President Porras found that the "present difficulties
are due to insistence by the American commissioners in sti­
pulating a fifteen-year period for the only clauses vital to
^ Foreign R e l a t i o n s , 1924, Vol. II, pp. 522-23.
2 Ibid.,pp. 524-25.
73
Panama?^ These clauses dealt w ith the commercial privileges
in the Zone which the United States had denied itself in the
Taft agreements.
Finally,
the Panaman president told President CoPlidge
that all of the concessions made by Panama had been in perp­
etuity,
and that equity dictated that the one vital point
sought by his country should, also be in perpetuity.
2
The
benevolent intervention of the American president was sought
in this connection,
might be achieved.
so that the economic stability of Panama
3
The acting Secretary of State replied for President
Coolidge through the American minister in Panama*
President
Porras was reminded of the circumstances surrounding the.
drafting of the treaty of 1903, and the temporary character
of the Taft agreements was emphasized, while it was made
clear that the basic treaty of 1903 was and would remain the
basis of United States-Panama relations.4^ The American position
is ably summarized:
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, definition, 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 cannot n o w clearly be foreseen.
Foreign R e l a t i o n s , 1924, Vol. II, pp. 524-25.
2 L o c . cit.
3 I b i d . , p .525.
4 L o c . cit.
74
The Panaman interpretation of Roose v e l t ’s policy was
regarded as too broad, as it was claimed that the former presi­
dent never intended to limit the rights definitely accorded to
the United States by the treaty of 1903,
The United States was willing to grant certain privi­
leges to Panama through the non-exercise of commercial privi­
leges in the Zone for a period that could be "safely foreseen",
but "...the American government must preserve its complete
freedom of action for the future to avail itself should
necessity therefore arise of the rights, powers and authority
granted to the United- States by the treaty of 1903".^
Regarding the transfer of jurisdiction over a portion
of Colon, the American note stated that the lands in question
belonged to the Panama Railroad company, and at the expiration
of that company’s concession, the reversionary rights to those
lands being held by the United States, the lands would continue
to be under American jurisdiction in accordance with the treaty
of 1903.2
Finally, Panama was reminded that the question of
perpetuity was not one-sided at all.
Certain concessions made
by the United States were p e r m a n e n t .
These include payments
for lands, which were to be based upon value of the lands at
time of acquisition and not upon their value in 1903; road
1 Foreign R e l a t i o n s , 1924.
2 Loc. cit.
Vol. II.,p.,526.
75
construction in Panama was to cost the United States about
$2,000,000;
the land to be given Panama for customs houses
in the Canal Zone,
certain concessions regarding the trans­
portation of liquors across the Zone, and, last, the making
of Panaman currency legal tender in the Zone.^*
In fact, the
n o t e ^ o n c l u d e d , only the concessions regarding commercial
priveleges in the Zone were of a temporary character.
On August 6 Dr. Alfaro left Washington, his colleagues
having quitted the capital a few days earlier.^
From March 17
to August 6 the commissioners had. held twenty-one meetings,
or one meeting about every nine days.
The matters submitted
in the Alfaro memorandum of 1921 formed the basis of a series
of informal discussions which the author of the memorandum
had with the State Department in February and the early part
of March before the treaty commission was assembled.
When the
treaty commissions began their conferences it was found that
m a n y of the problems before them could be disposed of without
serious difficulty.^
The two points which proved stumbling
blocks to the negotiators were the question of more territory
in the city of Colon, advanced by the United States; and P a n ­
a m a ’s desire for the commercial concessions to be made permanent.
1 I b i d . p. 527.
2 Loc_. c i t .
3 Foreign R e l a t i o n s , 1924.
Vol. I I . ,p. 527.
76
In exchange for the land gains in Colon, land which
would round out the Panama Railroad company holdings and per­
mit more efficient administration of the Canal,
the United
States was prepared to cancel the debt which Panama owed for
the construction of water works,
sewers, etc., in Colon.^
Panama made a counter offer to give the Colon lands requested
if the United States would turn back the lands of the Panama
Railroad company which were not used for Canal purposes.
Ob­
viously this proposal had no chance of acceptance since what
the United States sought was to increase, not diminish, its
holdings in Colon.
The United States now offered to refund to Panama
what had already been paid for the Colon water works,
the
cash value of this offer amounting to about $1,250^000.
ama .deblinedcthisroffer.
Pan­
From subsequent negotiations it
appears that Panama held the Colon lands problem in reserve
as a weapon with which to bargain for the permanent relinquish­
ment of American commercial privileges.
sioners advanced a third proposal:
The American commis­
that the area sought in
Colon be reduced to the absolute minimum consistent with the
with the objectives in view, and that the United States cede
to Panama a small portion of Cristobal abutting on Boca Chica.2
1 I b i d . p. 5S8.
2 I b i d . p. 529.
77
This final proposal was tentatively included in the draft
of the treaty, although it had not been initialed by the
Panaman commissioners before they left Washington as being
acceptable
The difficulties over the article dealing with the
non-exercise of commercial privileges were of degree more
than of k i n d .
The Panamans seemes willing to accept the
temporary character of the proposed article, but they wished
the self-denial clause to have an initial life of thirty years,
while the united States at first insisted the time limit be
fixed at ten ye a r s , 2
After some discussion the United States
agreed to a term of fifteen years, but would not extend the
time limit beyond that period.
For a time the commissioners passed over the commer­
cial privileges question to consider other matters.
When the
subject was again taken up the Panaman commissioners” ...made
the acceptance of their views that the article be of perman­
ent effect a condition for their acquiesence in the American
commission’s proposals regarding the cession of land in C o lon” .3
The chairman of the Panama commission sought and ob­
tained an interview with President Coolidge.
1 I b i d . p. 529.
2 Loc. cit.
® Loc.
cit.
The president
78
merely repeated what had already been said time and again
during the period of the negotiations, that while the United
States did not as a matter of policy intend to set up a com­
mercial colony in the Canal:'Zone.1
. ..it could not give up its rights under the treaty
of 1903, but at most would agree to a non-exercise
of those rights for so long a period as it can safely
foresee what its requirements may be.
Meanwhile rumors came from the Isthmus that' Panama
might not sign the treaty when completed.
The declaration by
President Coolidge indicated that Panama would lose nothing
by failing to sign the pact, and on the other hand the gains
were not great.^
these rumors.
The State Department took cognizance of
Considering the progress already made toward
a solution of the difficulties, i£ was felt that nothing
should hinder the conclusion of the pact.
President Coolidge
was consulted, and he authorized a public statement which it
was hoped would quiet the fears of the Panamans.
As a statement intended to reassure the fearful it
is undoubtedly unique.
After numerous assurances of the
feelings of goodwill and friendship which the United States
had for Panama, and after drawing attention to the cordial
atmosphere in which the negotiations had taken place,
unusual document hurled the threat that:
1 Ihid. p. 529. .
2 Loo.
olt.
this
79
Should a treaty not be concluded, the United States
while it will continue as in the past to deal
not onljr in a. friendly but also in a generous manner
with Panama
must, reserve the right to act in
such circumstances in accordance with the full rights
granted to it by the treaty of 1903,
In conclusion it was said that the statement was issued in
order that there might be no misunderstanding of the presi­
d e n t ’s remarks to Dr. Alfaro.
The suggestion is that Presi­
dent Coolidge might have gone a bit far in committing the
United States in the matter of relinquishing the commercial
privileges.
In defense of the State Department it must be
remembered that that branch of the government had been put
to some pains within the past year or so to make clear that
the Taft agreements were of only a temporary character, and
President Roosevelt had been quoted by the Isthmians in de­
fense of their thesis.
The State Department undoubtedly
wished to avoid any impression that a committment had been
made which was anything more than a generous but temporary
modus v i v e n d i .
It was only borrowing trouble to allow the
Panamans to construe too liberally the remarks of President
Coolidge, which,
in a decade or so, would rise to plague the
then incumbents in the State Department.
The threatening
portion of the statement is not in the best State Department
tradition.
Dr. Alfaro said that he understood perfectly the purport
1 Foreign Relations, 1924., Vol. II., p., 530.
ao
of President C o olidge1s remarks, and nothing that the president
had said could be construed as limiting in any way the pro­
visions of the treaty of 1903.1
Dr. Alfaro informed the State
Department that it was his understanding that his government
wished to hold in abeyance the treaty negotiations until his
return to Washington in October.2
While the members of the Panamanacommission were taking
their vacation of two months, the American minister in Panama
had a conference w ith the president of Panama.
The Minister
was told that the administration in Panama was anxious to sign
the treaty before it went out of office on October 1.
As this
statement was made on September 8, and the Panaman commissioners
were not due back in Washington until October,
it is a little
p
difficult to see just ho w this was to be brought about.
The Panaman president offered a solution of the two
problems that were blocking negotiations;^
1.
The question of the water works debt was to be lef
in abeyance.
The United States was to spend up to $1,250,000
on the construction of a road from Panama to Colon, with an
extension to Porto Bello.
Panama would supply additional funds,
if the #1,250,000 was not enough.
1 Foreign R e l a t i o n s ,, 1924*
I b i d .fp . .. 531.
3
Loc. cit.
Each country was to maintain
Vol. II,p., 530.
81
that portion of the road within its boundaries
2.
The United States should cede to Panama that
portion- o f .Cristobal abutting on Boca Chica, and in addition
a strip of land about four hundred meters long near the
American club in Colon, and now owned by the Panama Railroad
company.
The latter piece of land would be used for dock
facilities.
3.
A compromise should be reached over the time
limits in the commercial privilege clause.
A limit of twenty
or twenty-five years is suggested, with renewal periods six or
seven years in length.
The American minister adds'*’
There seems to be little doubt that present
assembly would ratify treaty immediately.
Both the
Assembly and its committee on foreign relations
would be favorably disposed.
There will probably
be only a short session.
It is still uncertain
whether Chiari will agree to accept treaty in its
present form.
The President appears enthusiastic
over finishing the treaty and now seems to be the
time to close negotiations.
The minister also gave it as his opinion that President Porras
woflld not insist upon the second proposal as a condition of
signature.^
Whatever chance t’
treaty had oB being concluded
quickly, was seriously jepardized by friction which arose
1 Foreign A f f a i r s ,
2 I b i d . p . . 531.
1924.,
Vol.
II, p. 532.
82
between President Porras and Dr. Alfaro.
Soon after his re­
turn to Panama Dr. Alfaro found that President Porras would
not support him for the office of first vice-president at the
elections soon to be held.-*-
The American minister thought that
there was little chance that any further progress could be made
in the negotiations until the new administration took office.^
From the comments of the American minister, it appears
that the State Department was not interested in President Porras*
suggestions.
The minister felt that the informal talks which he
had held with the president had in no way prejudiced the success
of the negotiations in Washington.
He informed the State Depart­
ment that through Dr. Morales that President Porras had w i t h ­
drawn his suggestion regarding the four-hundred meter strip of
land in Colon, and that the article of the treaty which provided
for the transference of jurisdiction of a portion of Colon
would now be acceptable to Panama if the United States would
accept the following provisos:®
1.
That the United States would request no further
extension of jurisdiction in Colon.
2.
That the boundary line would follow the course of
the streets, which were to remain under the jursidiction of
■*■ Foreign Affaird,
2 Ibid., p.532.
3 IbiiL,., P. 533.
1924, Vol. II, p. 532.
83
Panama.
3.
That the city of Colon should be permitted to
determine in its discretion where the statue of Christopher
Columbus should be located.
4.
That an allowance should be made to Panama to
cover the cost of pavements, aqueducts and sewers in the area
ceded to the United States.
5.
That the jursidiction over the Bay of Folks River,
as provided in the tentative draft of the treaty,
transferred to Panama,
should be
excluding the cession of marine cables.
To this latest suggestion the Secretary of State re­
plied on September 18 that the United States would agree to
the proposals regarding the construction of the road from Panama
to Colon, providing the road ran near the Canal and that Panama
made arrangements in advance to care for her share of the cost.
The United States would spend up to $1,250,000 on the road, and
allow the sewer debt to be liquidated in accordance with exist­
ing arrangements.
The road matter would be regarded as a quid
pro quo for the land in Colon**’
Regarding future land requisitions in Colon the Department was adamant,
2
saying that:
foreign R e l a t i o n s , 1924^} Vol* II,,p..
^ Loc* cit.
533.
84
While this government does not now foresee the
necessity for asking for any further cession of
the city of Colon to the United States, it cannot
bind itself in a treaty never to do so since future
exigencies cannot be foreseen at this time.
You may
point out to the president that this request seems
unusual and unnecessary in view of the fact that
Panama is in no wise obligated to grant any further
request for transfers of jursidiction.
It is impossible to understand what the State Department
meant by the closing words of the abofe statement.
As Long
as the United States insisted that the treaty of 1903 should
remain the basis upon which Panama-United States relations
stood, the United States by virtue of Article VII of that
treaty had the right to "acquire by purchases nor the right of
eminent domain’^
such lands in Colon as it needed for the use
of the Canal.
The boundary question was compromised b y making the
line of demarcation the middle of the streets, although the
United States pointed out the cost of paving and maintenance
to which Panama would be put.
The difficulties and cost of
a new survey were also n o t e d . 2
The statue of Columbus did not appear to be covered
by the proposed treaty, but the United States would give P a n ­
ama. a supplementary letter allowing the Isthmians to do with
the statue as they wished.
Miller,
o jd.
c i t . , Appendix V.
^ Foreign Relations,
19S4V
Vol. 11^ p.,
533.
85
The United States would pay Panama for any improve­
ments actually made by the latter country in the areas to be
ceded, the compensation to be determined by a Joint board.
A small water area would be granted in Cristobal adjoining
Boca Chica, but the United States would retain control of all
cables and cable landings.’*'
Most important of all, the United States would allow
the commercial privilege clause to operate for a period of
twenty years, with succeeding renewal periods of seven years
each.^
The American minister was instructed to transmit these
terms to President Porras orally and not to put them in wri-ting.
An examination of the terms offered by- the State Department
will show that the United States had taken a long step in
trying to meet the requests of the Panamans.
While Panama had
asked that the commercial privilege clause be drawn for a m i n ­
imum of thirty years, and the United States had at first insis­
ted upon ten years as the maximum period, the final term offered
by the United States was a fair compromise.
The length of the
renewal periods was that specified by President Porras.
The
concessions regarding Boca Chica and the street boundaries
were in the nature of compromises, but in the matter of the
Panama-Colon road the United States met P a n a m a ’s wishes, the
^ Foreign R e l a t i o n s ^
2
I b i d . , p . , 535.
1924*.
Vol. II, p. t 534.
86
only reservation being the logical one of providing for the
financing necessary for the undertaking.
There appear two reasons for the concessions granted
by the United States.
In the first place it may be argued
that much work had already been done on the treaty with con­
freres who were willing to compromise, and it was therefore
desirable to make some additional concessions in order to
bring the negotiations to a happy conclusion before a change
of administration brought into office more exacting and less
pliable negotiators.
At least, this seems more logical than
the explanation given by the State Department,
that the United
States was anxious to meet President P o r r a s ’ wish that the
treaty be concluded before October 1, when he left office.-*The Department w a s explicit that the latest offer was continp
gent upon immediate a c c e p t a n c e ;
...and that should this not occur for any reason
whatsoever these concessions will be considered as
withdrawn and the United States vail stand upon
the proposals made in the treaty negotiations in
Washington.
Bn September £0 Minister South wired Mr. Hughes that
President Porras accepted all of the terms proposed by the
United States with the sole exception that the final proposal,
that dealing with the commercial privileges, would be accepted
^ Foreign R e l a t i o n s ,
2 Ibid,.p. 534.
19E4. Vol. I I %>p %}534.
87
if two years instead of one y e a r ’s notice was given before
denunciation or abrogation.^The next day? South wired that President Porras had
told h i m that the proposals were favorably received at a con­
ference of leaders attended by President-elect Rodolfo Chiari
and the treaty commissioners.
Senor Chiari was said to be
familiar with the previous negotiations.^
Five days after
this heartening news Minister South.was compelled to tell Mr.
Hughes that*
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 1.
I have again in­
formed h i m and the commissioners that the Depart­
m e n t ’s informal proposals are definitely withdrawn
and that the negotiations will have to be continued
between the two commissions in Washington after
agreement has been reached on the two principal
points of contention.
Meanwhile Panama found new demands to make.
The very
day that President Porras told Minister South of the favorable
reception accorded the State Department’s offer, the Panamans
were framing new requests.
demands to Washington.
Minister South transmitted the
Panama wanted the Colon street bound­
aries made definitive and perpetual.
^ Foreign R e l a t i o n s .
2 I b i d . , p., 536.
3
Loc. cit.
1924^
Bonded Warehouses in the
Vol. II, ,p'. . 537.
83
Canal Zone were to be under the control of the United States,
and private warehouses were to be prohibited.
The right of
the United States to make use of the harbor anchorages at
Panama and Colon was to be restricted to use ffin case of
emergency only.”
Lastly, the right of. the United States to
enforce quarantine and sanitary regulations was to be limited
to those which were not of a strictly municipal character.
The Statd Department rejected these proposals.
Regard­
less of the merits or demerits of the proposed treaty, it must
be recognized that Panama introduced three new subjects for
discussion at a time when the United States was meeting the
Panaman demands on other points which had been under consider­
ation for some time and which were thought to be the only ones
blocking the signing of the treaty.
If questions of anchorages,
warehouses and quarantine and sanitary control had formed a
part of the Panaman bill of particulars, then they should have
been included in
ter South in
It is
the matter.
the list President Porras
furnished to Minis­
the early days of September.
not too much to charge Panama with bad faith in
The real reason for these new
proposals ■undoubtedly
lies in the obstructionist tactics of the incoming administra­
tion, which refused to allow an outgoing group, in the final
days of its administration, to execute a stroke of state for
^Foreign Relations, 1924, Vol.- II, p. 536.
89
which it might possibly receive credit.
It appears that negotiations were in abeyance ftom
the end of September 1924, until June 18, 1925^*, when they
o
were formally resumed in Washington*
Apparently the United
States was willing to give further consideration to the com­
mercial privilege clauses, and might even consider meeting
P a n a m a ’s wish by making them permanent, but the Washington
government stood firm by its demand for the Colon lands.®
By the end of the winter of 1926 the Panaman commissioners
seem to have reached the corclcusion that they had obtained all
the concessions possible, and that negotiations could be brought
to a close.
4
T hey returned to Panama in June for one last con­
ference with their government,
States again on July 19.^
and embarked for the United
The treaty was signed on July 28,
three days after Senors Alfaro and Morales landed in N e w Y o r k . 6
The provisions of the treaty were not made public.
^ The excellent State Department series published
under the title of "Papers Relating to the Foreign Relations
of the United States", in the volume for 1S25, fails to give
any details of the negotiations and in fact ignores the subject
completely.
McCain offers no explanation of the delay, which
was probably due to the preoccupation of the new administration
with internal problems.
% Me Cain, ojD. cit. , p. * 234.
^ Loc. ci t .
4
Loc * c i t .
5 The N e w York T i m e s . July SO, 19S6.
^
The
N e w York T i m e s , July 30, 1926.
6
.
/
90
The secretary of foreign affairs read,
the treaty
^tothe National Assembly on September 1, and Doctor Alfaro,
who had returned to Panama for the p u r p o s e , explained the
document to his countrymen.-^
The pact was not to be consid­
ered until December, at which time it was to be presented to
p
the Panamanian Senate.
Until that time members of the Aoaaembly ” ... were requested to keep secret the treaty clauses not
3
already p u b l ished” .
A month later President Chiari asked the
postponement of fiscal legislation until the fate of the treaty
was known.^
The world first knew the terms of the pact through the
H e r a l d o , of Havana, and the Reportorio A m e r i c a n a , of San Jose,
Costa Rica, the two papers publishing the text simultaneously
on December 14.
Copies of the papers were seized in Panama.
Later, Doctor Alfaro gave permission to the Dairio de Panama
to print the text.^
The treaty as published was copied undoubt­
edly from an official printing made by the Panama Government
'
i, ■’i
^
_.
^
N ew Y o r k T i m e s , September 2, 1926.
2
T o o . cit.
.
L o c . c i t . A general claims convention between the
United States and Panama was signed on the same day as the
treaty, but was not ratified by Panama until December 22,
1930. (Department of S t a t e , Press K e l e a s e s , No. 65, December
27, 1930}*
4
New York T i m e s , October 3, 1926.
^ No w Y ork T i m e s , December 15, 1926.
91
Printing office for the use of members of the government.!
The New York Times correspondent reported on December
17 that publication of the treaty had not caused much general
discussion in Panama.
the matter calmly.2
El Tiempo called on the nation to study
The London Sunday Observer was the first
of European papers to comment- on the pact, and the general tone
of its reaction was favorable.*5
President Chiari gave an inter­
view to newsmen on December 20.
He found the new padt a gain
over the old one and pointed out that the door to future nego­
t­
i a t i o n s was not closed.v Panama, he said, by serious and
judicious conduct could win at another conference what she had
failed to gain in the present pact.
Meanwhile the Foreign Affairs Committee of the National
Assembly declared that preliminary study of the treaty indicated
that the ten days set aside for consideration was not enough and
the matter would go over into January*^
Dr. Morales, one of the
negotiators, announced that the treaty was the best Panama could
obtain and he would defend the pact in the forthcoming deliber­
ations.
Like President Chiari, he found his handiwork an im-
^
N e w York T i m e s , December 15, 1926.
I b i d y .December 17, 1926.
3
I b i d D e c e m b e r 19, 1926.
^ Ibid , ,December 20, 19 26.
5 Loc. cit.
92
provement over the old pact, and he agreed that future n e g ­
otiations were possible*"*"
The treaty
2
consisted of thirteen articles.
The chief
points of contention were settled as follows:^
The Colon lands sought by the United States were yield­
ed by Panama.
Slight rectifications of the Colon-Canal Zone
boundary line favored Panama.
The United States agreed to
cooperate in building the road across the Isthmus to the extent
of spending $1,250,000.
Panama to pay the balance and also to
spend at least $50,000 annually on maintenance.
In the matter of the commissaries the treaty, in effect,
reenacted the Taft agreements.
The sales to ships would con­
tinue, while the commissaries would sell only to employees,
officials and workmen, and their families$
In the service of
the Canal or the Panama Railroad company*
The United States retained the right to requisition
land for use of the Canal administration, but agreed to give
notice in writing in advance when such requisitions were con­
templated.
A joint commission would appraise the land.
Article VII gave Panama the right to ship liquor across
The H e w York .T i m e s , December 22, 1926^
2
Congressional R e c o r d , 69th Congress, 2nd session, Vol.
6 8 ., Part 2.
Senate, p. 1848-1852.
5
Extradition, postal services, consular exequaturs and
the Panama Railroad problems were not included in the treaty.
93
the Zone under seal, and to export liquor through Canal
Zone ports.
As an off-set to this concession, the United
States retained absolute control of radio communications in
Panama, applications for radio installations were to be sub­
mitted to Canal Zone authorities and the United States was
to have the right to construct and operate such radio stations
in Panama as it deemed necessary.
Less important were provisions by which the United
States retained sanitary control in Panama and Colon,
the harbors
-pf. the two cities were to be forever free to ships using the
Canal, free interchange of goods between the Zone and Panama
was provided, private businesses were prohibited in the Zone,
and the United States promised to help end the smuggling evil.
The two really significant Articles are the following:
Article XI
The Republic of Panama agrees to cooperate in all
possible ways with the United States in the protection
and defense of the Panama Canal.
Consequently the
Republic of Panama will consider herself in a state
of war in case of any war in which the United States
should be a belligerent; and In order to render more
effective the defense of the Canal, will, if necessary
in the opinion of the United States Government, turn
over to the United States in all the territory of the
Republic of Panama, during the period of actual or
threatened hostilities, the control and operation of
wireless and radio communications, aircraft, aviation
eenters, and aerial navigation.:.... .
Article XIII
This treaty does not limit or affect rights of either
party as provided in the treaty of 1903, nor can it...
94
be taken as being a limitation, definition, restriction
or restrictive construction of the rights of Either
party under the treaty of November 18, 1903,..
Speaking broadly,
the treaty merely reaffirmed the
Hay-Buanu-Varilla pact and indicated that the United States
was going to continue its existing policies in the Canal Zone.
P a n a m a ’s only gains involved road construction and the privi­
lege of shipping liquor across the Zone.
Article XIII gave to
the treaty the same temporary character that marked the Taft
agreements.
It must be remembered that this pact was, by the
unchallenged testimony of Article XIII, another modus viviendi,^and that in case of necessity the United States had reserved
the right to fall back on the more sweeping and vague terms of
the treaty of 1903.
In no w a y can it be considered to have
been a definitive document.
Regardless of the present treaty,
the pact of 1903 would remain the basis of United States-Panama
relations.
The storm broke in Panama on January 1, 1927.
The
municipal council of Colon passed a resolution condemning the
2
pact and urging the National Assembly to reject it.
The
government wired the provincial governors that:
In view of the.insidious and unpatriotic propaganda
n o w being carried on against the treaty negotiated
between Panama and the United States, the Government of
Panama believes it is its duty to counsel all the in­
habitants of the republic to maintain the calm and m o d ­
eration required at this' time, during which the National
Assembly needs tranquility for a sane study of the com­
pact, the approval or disapproval of which is of trans­
cendent importance for the future of the republic.
95
A week later Dr. Harmodio Arias,
a former delegate
to the League of Nations, told the Rotary Club of Panama
that opposition to the treaty was growing in all parts of
the country, and that even "'...those who negotiated on behalf
of Panama, seem dissatisfied, as their principal argument in
its favor is that it is the most they could obtain from the
United States".-*On the day of Doctor A r i a s ’ speech Doctor Alfaro
arrived in Panama from N e w York for the avowed purpose of
defending the treaty before the National Assembly.
2
Morales,
another treaty commissioner, was heckled with "more rudeness
than reason"
3
while.speaking in favor of the pact before the
Panama Federation of Labor.
into the provinces,
Anti-treaty forces sent agitators
and the annual Panama carnival was post­
poned because of the growing tension.
The Times correspondent
found a growing anti-United States feeling of unexact origin;
but there was a suspicion that it was fomented by.foreign
sources.*
Feeling continued to mount.
On January 18 El Tiempo
published a letter communicated to it in which the members of
N e w York T i m e s , January 9, 1927
2 IblSr. January 10, 1987.
^ Loc. cit.
^ Loc.
cit.
96
Thei National Assembly who should vote for the treaty were
threatened with death.^
The representative from the province
of Chiriqui said that his constituents were ready to ceded from
Panama and join Costa Rica, and that many men were hiding in
the mountains under the impression that they would be drafted
into the war service of the United States.2
On January SI the
Accion C o m m u n a l , a nationalistic militant youth organization
of apparently fascist hue, and the Sindico General de Traba-jadesr:
o r e s , announced a three-day drive during which tags would be
sold bearing a demand that the treaty be rejected.^
Possible serious trouble was avoided when the National
Assembly on January S6, by a vote of thirty-nine members, passed
a resolution suspending further consideration of the pact, and
asking the president to reopen negotiations with the United
States.^
The committee appointed to study the treaty had filed
no report.5
The following day the American State Department admitted
that negotiations were under way involving minor changes, but
1 New York T i m e s , January 19, 1927.
2 L o c . cit.
^ Ibid^j January 22, 1927.
^ Ihid.j January 27, 1927.
5
v Supra / This body had been appointed in December and
was to make known its findings in ten days; more than a month
after its appointment it had not filed a report.
the Department insisted that the changes would
the substance of the treaty".-*-
97
"hot effect
On January 28 Doctor Alfaro
was ordered to return to Washington for a conference with
Secretary of State Kellogg on the possibility of reopening
the negotiations.
Meanwhile the American State Department
refused comment on the situation.
For his government, P r e s ­
ident Chiari expressed the hope that the opportunity might
exist for negotiations looking toward a treaty more favorable
to Panama.2
On January 29 the State Department asked the
Senate to defer action on the treaty until it could be sub­
mitted in modified form.
The Senate was told that no important
changes were contemplated, it being the understanding of the
Department that the Panaman requests were of a minor nature.3
Thus the treaty failed to find favor in Panama.
There
was nothing in the negotiations between the United States and
Panama, and in the famous Alfaro memorandum,
to give the State
D e p a r t m e n t .any reason to believe that the changes sought by
Panama would be of a "minor" nature.
No one in the Department
who had been in contact.with the negotiations which had covered
such a protracted period could help but know that the treaty as
it was finally signed and subsequently transmitted to Panama
N e w Y o r k T i m e s . January 28. 1927.
^ Ibid j>gJanuary 29, 1937.
2 Ibid., January 30, 1927.
98
failed by a very wide margin to meet the Panama demands.
The basic treaty of 1903 remained in force.
Panama-
got a highway and liquor transit privileges; United States
rights were more clearly stated and were enlarged. P a n a m a 1s
gains were trivial at most, and on the great, basic questions
she had gained not a thing.
Another decade was to elapse
before her demands were finally realized.
CHAPTER YII
PANAMA CONTINUES THE STRUGGLE
That the United States and Panama were as far apart
as the poles in their approach to the problem has already
been indicated.
Panama sought an entirely new pact; the Iiay-
Bunau-Varilla treaty was to be superseded in all respects.
The United States sought a treaty which might be superimposed
on the treaty of 1905 and would be subordinate to that treaty
and revocable in essence .at any time.
President Coolidge had
emphasized the importance of Article XIII***
of the treaty in
his message of transmissal to the Senate.s
The pact was for
. . . the settlement of certain points of difference
between them, the United States and Panama, which have
arisen out of the exercise by the United States of
sovereign rights in the Canal Zone by virtue of the
Panama Canal treaty of November 18, 1903.
The injunction of secrecy laid on the
Senate was removed at
18.
3
The text of the
Cuban and Costa Rican
treaty in the
the request of Senator Borah on January
treaty had been made known through the
newspapers more than a
month before, and
it was officially published in the United States a matter of
days before the Panaman National Assembly administered the
coupe de grace.
^Supra.
sCong. R e c . Senate, 69th Cong., 2nd. Session, Vol. 68,
part 2, p. 1846.
^Loc. cit.
100
A period of inaction began.-1*
At the end of February
the Chamber of Commerce of Panama appealed to Senator Borah
to investigate the damage done to Panaman business by the Canal
commissaries.2
A number of influential American business men
attending the Pan-American Commercial conference in mid-May
filed a protest with the State Department against the C o m m i s s a r ­
ies.
They charged that the commissaries were being operated in
a manner that violated the spirit of the Canal treaty.
Presi­
dent Coolidge let it be known that the commissaries operated
under treaty rights, while President Arias said that if it were
not for the sale of liquor, Panaman revenues would be ”in dire
straits.
Dr. Alfaro had returned to Washington in March.
By
the end of August the treaty was-in the same position that it
had been the previous winter.
made in August,
To Doctor A l f a r o ’s request,
that Panama be granted certain changes in the
treaty, the State Department replied^ that it ” ... would be
glad to consider any changes he might propose,” but he had
^ Until the volumes covering the years in question are
published in the Foreign Relations series by the State Depart­
ment, the details of negotiations will be unknown.
M c Cain
sheds no light on this period.
2 ^ ew Y ork Times, February 27, 1927.
3
I b i d . M a y 14, 1927.
4
L o c . cit.
5
2This reply in part contradicts the statement of McCain
that Panaman attempts at reopening negotiations accomplished
nothing.
The D e partment’s contention is that no s t e p ^ w e r e taken
to follow up its offer to consider new proposals.
Cf. McCain,
op. c i t ., p . 240.
101
taken no further step at that time.-*-
At the Panaman legation
reporters were told that attempts would be made to reopen
negotiations in the fall.
Secretary Kellogg saw in European
criticism the m ain reason for Panaman failure to ratify the
treaty.^
The pot was
newspapers that the
kept boiling by the charge in Mexican
Panaman commissioners had been
coerced into
signing the treaty under threat that the United States would
break off diplomatic relations.
Doctor Alfaro called the M e x ­
ican char g e s " ... completely false and a b s u r d . " 4
The State Depart­
ment added its voice in denial.
To the Kellogg charge that European criticism and agi­
tation had prevented Panama ratifying the pact, the Panama
newspapers Star and
Herald and The Panama American
European criticism had had no effect upon P a n a m a ’s
the pact.
replied that
opinion of
European newspapers enjoyed a very limited circula­
tion in Panama and were very little quoted in the Panama press*5
The conservative Star and Herald was almost the first Panaman
agencytto give thought to the idea that opposition to the treaty
^ N e w Y ork Times, August 25, 1927.
^ H o c . cit.
® L o c . cit.
4
New Y o r k Times, August 28, 1927.
^ I b i d . » September 5, 1927.
102
was not sincere on the part of all those who had worked against
it.
The Star and Herald commented^
We believe some modifications should be made in the pact
particularly as it concerns t h e .sovereignty of the
country and its relations to the League of Nations.
However, regardless of any changes that m a y be made,
the treaty will be violently opposed as soon as it
is returned to our Assembly for consideration.
No
treaty.could possibly be drawn up that would satisfy
certain elements,^ whose very existence is opposition
to everything.
Senor Morales,
chief of the Panaman delegation to the
League of Nations, had a busy time explaining to the eighth
session of the League the meaning of Article XI of the treat#.
Morales explained that P a n a m a ’s agreement to join the United
States in
defending the Canal was in no way a violation of
Panaman obligations to the League under the Covenant.^
Morales
contended that sovereignty eonsisted of many elements,
and that
Panama had surrendered to the United States in the Canal Zone
the right to exercise certain of these elements, but there
were other factors comprising the entity of "sovereignty," and
these factors had been reserved by Pahama.
In other words,
Panama in joining the United States in defense of the Canal
would only be joining in the defense of her own t e r r i t o r y .4
^ N e w York T i m e s , August 28, 1927.
2
This is undoubtedly a reference to the semi-fascist
Accion C o m m u n a l . an organization of very young men.
As in Italy, .
the love of uniform and its prec|uisites has a strong appeal to
the mediocre, who otherwise would spend dull lives behind the plow
5
League of Nations, Official Journal.
Special Supplemeift
No. 54.
4 'Loc. cit.
103
Panama contended that the Canal Zone was ,!. . .a part of its
own territory in which another country possesses vital in­
terests'. '*1
This was the traditional position of Panama, the
one upon which objection to the commissaries and business en­
terprises was based, and Morales suggested that the question
of sovereignty we decided once and for all by an arbitral
body.^
President Chiari endorsed the stand taken by Morales.^
Bunau-Varilla,
ed the United States.
in a letter to the Paris Figaro, defend­
He found the new pact merely brought
the treaty of 1903 up to date, and that the controversial Art­
icle -XI was merely a restatement of Article I of the treaty
of 1903.4
The witch-burning section of the Panama press saw in
the forthcoming American army maneuvers,
an annual routine
military exercise, the preliminary circumlocutions that would
end with the occupation of Panama.
The normal complement of
troops in the Zone had been augmented for the maneuvers, and
the increase had been made with the lull knowledge and con­
sent of American c h a r g e . b
The conservative Star and Herald
charged the other newspapers with flalarmist tactics”.
But the treaty was a dead issue, and gradually the
'
League of Nations, Official Journal. Spec.Supplement,No.54
^ ^ ew iork Times.
September 11, 1927.
3 Iftidt September 18, 1927.
4 Ibid, December 18, 1927.
3 Ibid, December 27, 1927.
6 Loc.
cit.
104
various reverberations died out*
brought no n e w activity.
The years 1928 and 1929
The world seemed too prosperous to
be disturbed by tie acrimony of a treaty debate.
the fall of 1929 was slow in being felt in Panama.
The crash in
The large
number of Panamans employed on Canal works had kept the unem­
ployment on the Isthmus at a minimum,-*- and road building and
the heavy tourist business contributed to the prosperity of
Panama.
•
On August 12, 1950 Doctor Alfaro told the American
press that the treaty of 1926 had been drafted under unfavorable
diplomatic conditions^, and that he had high hopes for better
things which would emerge from n e w negotiations which the State
Department had indicated it would be glad to undertake.
The Claims Convention which had been signed in 1926,
was finally ratified by Panama on December 22, 1930.4
Before
the treaty could be proclaimed and work begun under its pro­
visions, revolution swept Panama.
The revolution was the first to disturb the Isthmus
^ McCain, ojd. c i t . , p.
242.
2
The unfavorable conditions had continued for at least
twenty-seven months.
Doctor A l f a r o ’s observation seems a thin
apologia for the general character of the treaty of 1926 and its
very swift and complete failure.
^ ^ ew Y o r k T i m e s . August 13, 1930.
^ Yress R e l e a s e s t No. 65.
December 27, 1930$
105
since 1903.
The movement began on the night of January 2,
and within a few hours complete success rewarded the revol­
utionists.
President Arosemena was put out of office and
placed under arrest in the presidential palace.
were killed and twenty-four were wounded.
-Ten persons
A revolutionary .junta
consisting of Arias, Francisco Paredes, and Doctor J. J. Yallarino
assumed charge of the government.
The American minister,
Davis,
was hurridly summoned from his bed to the presidential palace,
where, after a brief conference with President Aroseman$,
the
latter' resigned.-*-,
For his role in the imbroglio, such as it was, Arias
thanked Davis in fulsome terms.
Davis was credited with tact,
courteousness and earnestness in coping with'a "very difficult
situation."^
The picture of an American diplomat mediating b e ­
tween the rebognized government to which he was accredited, and
a group of "palace revolutionists", would have been most pleas­
ing to Theodore Roosevelt, who no doubt would have found in the
ministers
actions a vindication of the Rough Rider methods
which he himself employed in Latin America.
Pablo Arosemena had been elected president of Panama
on August 5, 1928.
3
Hi s opponents charged him with failing tp
^ N e w Yo r k T i m e s , January 3, 1931.
2
Loc. cit.
2
Loc. cit.
106
carry out election pledges with regard to electoral reform^-,
and with fiscal mismanagement.
In connection with the latter,
an American financial committee had surveyed Panaman finances
and had criticized the government for living beyond its means
and accumulating a floating debt.
The salary-cutting campaign
that had followed the committee’s report had hit the small wageearner, while those in the higher brackets had not been touched . 2
Under Arosemena Panama also had issued bonds in the amount of
$500,000, bearing seven per cent, interest, to meet the cost of
government,
and later had borrowed a million dollars from the
Panaman branch of the National City' bank, of N e w York.^
Further
Arias had made himself conspicuous by his fight against the
treaty of 1926.
It is probable that Arosemena was no worse an
administrator than the average Panaman president, but he had the
misfortune to take office during a period of great prosperity
when long-range expenditures were predicated upon high revenues,
and then to continue in office after prosperity had vanished
and a money stringency had taken its place.
The revolutionists moved swiftly to quiet foreign fears
and obtain international approbation.
They announced that P a n ­
ama would honor all of her international obligations, including
^ The president was elected by the National Assembly,
whose members were chosen by direct vote of the people.
The
election in which Arosemena was elected over Boyd was character­
ized as "flagrantly mishandled" (N e w York T i m e s . January 3, 1931)
^ Loc.
cit.
® Loc.
cit.
107
the financial committments of the r e p u b l i c .1
The .junta offered
the presidency to Doctor Alfaro, who was still in Washington as
Minister of Pahama, a position he had held since 1922.^
The American State Department moved cautiously so that
no charge of favoritism could be brought against it.
On Jan­
u a r y 5 Doctor Alfaro conferred with Francis White, of the div­
ision of Latin American Affairs.
In an interview Alfaro Maid
that the question of recognition had not been taken up,^ but
expressed the opinion that the United States would consider his
assumption of the presidency a legal transfer of power.^
A few days after his conference with White Alfaro left
for Panama, where he arrived on January 16.
He was inaugurated
a few hours later.
Italy extended de facto recognition to the junta on
January, an act which the Panaman foreign office claimed was
nnnecessary.
Germany found that the change had taken place
within the constitution, and formal recognition of the new
5
government was not necessary.
The Times correspondent found
1
N e w Y ork T i m e s , January 3, 1931
2
L o c . cit.
3
This is very difficult to believe.
The change of
government, and all it involved, could hardly have escaped
serious discussion.
Doctor Alfaro was also being cautious.
4 Apparently Alfaro was of the opinion that the Panaman
constitution provided for changes of administration by revol­
ution as a pleasant alternative to regular elections.
5
Germany agreed with Alfaro (Cf/ note No. 4).
108
that the body of the revolutionary forces was drawn from the
members of the Accion C ommunal, whose members ranged in age
from about twenty to twenty-two years
President Alfaro had been in office less than two
months when he announced that Panama would open negotiations
for a new treaty.
Arias,
of the revolutionary Junta, was
appointed minister to the United States,
and Alfaro said that
the purpose of the negotiations would be to seek a modification
of the treaty of 1926” in a form that will fulfill as nearly
as possible the hopes of P a n a m a . . . " . 2
A month later the P a n ­
aman president told the Panama Association of Commerce that
"...in recent conversations the State Department in Washington
manifested a favorable disposition that permitted the hope a
satisfactory understanding would be reached in the near future."
It was not until the end of August however,
that Doctor Vallar-
ino, the acting Secretary of Justice, instructed Minister Arias
to begin negotiation of a new treaty.^
The Claims convention ratified by Panama in December
of 1930^, was finally proclaimed in the same month of 1931.
^ N e w Y ork T i m e s , January 12, 1931.
2
I b i d . Mar c h 9, 1931.
3
I b i d . April 11, 1931.
I b i d . August 31, 1931.
5 Sfupra.
109
By April of the latter year the commission was on the verge
of beginning, its work, and persons having claims were told to
get in touch with the State Department.***
The Claims commission
to consider all claims of Panamans and Americans which had
arisen since the inception of the Republic, except those involv­
ing the construction of the Canal, these latter were provided
for by Article VI of the treaty of 1903.2
Senor Cruchaga, Chilean ambassador to thh United States,
was selected by the two governments to act as neutral presiding
c o m m i s s i o n e r J o s e p h R. Bakey, assistant legal advisor to the
State Department, represented the United States, and Doctor
Alfaro, Panaman minister to the United States,^ represented his
country.^
By the time the closing date for the filing of claims
arrived there were twenty-six cases involving 145 claims on the
docket.^
Before any work could be done a new Claims convention
1
Press R e l e a s e s . No. 79.
April 4, 1931.
2
Press R e l e a s e s , No. 105. October 3, 1931*. American
claims arising from the Colon fire of 1885 were the subject of
special negotiations.
^ Press R e l e a s e s , No. 117, December 26, 1931.
Senor
Cruchaga resigned as Ambassador to the United States on November
29, 1932.
Panama and the United States, failing to agree on
another neutral commissioner, appealed to the Permanent Court at
the Hague.
The president of the administrative council of the
Hague court named Baron Daniel Van Heeckeren, who accepted the
post (Press Releases No. 175, 177, February 4 and 18, 1933).
4
Harmodio Arias was elected President of Panama in the
regular election of 1932.
Dr. Alfaro returned to his old post
in Washington.
^ Press R e l e a s e s . No. 129. March 19, 1932.
^ Ibiji, No. 160. O c t o b e r ‘2 2 , 1932.
had to be drawn extending the time in which the commission
could do its work.l
The new convention was ratified by P a n ­
ama on March 25, 193 3 . 2
It extended the time for the examin
ation of claims to July 1, 1933, and also extended the time
which the debtor nation could pay until July 1, 1936.^
Department of State, Arbitration series No. 6 ,
American and Panamanian General Claims A rbitration.
2
Do£.
cijt. ~
• 3 Press R e l e a s e s . No. 183, April 1, 1933.
CHAPTER ¥111
THE GOOD NEIGHBOR POLICY IN ACTION
A reduction in the tempo of Canal Zone construction
work, resulting in unemployment of thousands of Panamans; a
decline in the tourist trade and the general reduction of
business volume hit Panama with full force in the first part of
1932*
In the early part of the year, American relations with
Panama were improved b y the signing of a treaty b y which
Panama could ship liquor across or through the Zone, and could
use Zone ports for the importation and exportation of liquor,
provided in all cases that the shipments were sealed and were
properly authenticated b y Panaman documents.
Ratifications were
exchanged on March 25, 1933.^
In May, Panama borrowed at the high rate of seven per
cent $100,000 f r o m the Panama branch of the National City
Bank with which to meet governmental salaries and ftpressing
local b i l l s ” .^
Finances deteriorated rapidly.
In June, there
was a general salary cut of ten per cent, with a m onthly deficit
of $125,000 under the budget estimates.^
On August,1, there
L Department of State, Treaty S e r i e s . No. 861.
^ Loc* c i t .
® ^ew ¥ork Times, M a y 22, 1932*
4
L b i d , June 16, 1932.
118
were further
salary cuts and President Alfaro reduced his own
salary by thirty per c e n t I n
September, the minister of
finance Introduced a bill in the National Assembly which pro­
vided for a moratorium on any and all debts of the national
government.2
This measure was followed b y a bill signed by
President Arias on October 2 b y which two hundred employees
of the government were dropped.
The chief of the Panama fire
department took charge of the police without any additional
compensation.^
Modification of the Eighteenth Amendment early
in 1933 after President Roosevelt took office, made it possible
for the clubs and commissaries in the Zone to sell beer, thus
depriving Panama of additional revenue.
The sale of beer
caused ill-will far out of proportion to the issue involved.
The financial stringency, already bad in 1932, became
worse as 1933 wore away, and help from the United States appear­
ed to be the only hope that Panama had of avoiding complete
collapse.
President Arias decided to make a trip to Washington,
there to lay a personal appeal before President Roosevelt.
an advance announcement of the trip^
In
Arias said that no
technical or legal questions would be dealt with, and that he
^ Ibid «, A u g u s t 1, 1932.
^ Ibid^^September 13, 1932.
3
Ibid ^.October 4, 1932.
4
Ibid^ .September 29, 1933.
113
wanted n . . . to discuss our relations in general in a
sincere, frank and friendly manner".^*
His departure was
the signal for an outburst of national feeling.
Business
houses closed so that all could bid farewell to the presi2
dent.
The Panama press reacted favorably to A r i a s 1 m i s ­
sion.
Two days after his departure the Archbishop of
Panama called upon all Panamans to make daily prayers for
3
the success of the trip.
President Arias reached N e w York on the United
Fruit company ship Q,uiragua on October 8 and left the next
4
day for Washington.
He met President Roosevelt on the
9th and was the guest of honor at an informal White House .
dinner that evening.
At the invitation of President R o o s ­
evelt, Arias was a guest at the White House for a portion
5
of his stay in ?vrashington.
On October 10 Arias and Secretary of State Hull
had a conference at the State Department.
The meeting was
also attended by Assistant Secretary Caffery, General
1
Loc.
cit.
2
I b i d . , October 2, 1933.
3
I b i d . .October 4, 1933.
4
N e w Y o r k T i m e s . October 9, 1933.
5
I b i d . , October 5, 1933.
114
MacArthur and Admiral Standley.^
The presence of the last
two officials gives an indication that questions involving
the strategy of the Canal were on the agenda for discussion.
The next day President Roosevelt invited President Arias
to attend a White House Press conference.
The two exec­
utives told the newsmen that they were well pleased with
the discussions they had had, and a proper solution of the
p
problem could be expected.
On October 17 Presidents Roosevelt and Arias isrz
sued a joint statement
indicating that sweeping changes
in Panama-United States relations were about to take place,
and that Panama was to realize m any of her wishes.
In
. 4
part, the statement said;
We have talked over in the most friendly and
cordial manner the field of Panamanian-American
re lations.. .We are in accord on certain general
principles as forming the
basis of the relations
between Panama and the United States infar as
the Canal Zone is concerned...
The statement set forth three general .topics which
5
would form the basis of the negotiation of a new treaty.
^ Ibid. ,,October 11, 1935.
^ I b i d . O c t o b e r 12, 1933.
3
I b i d .> October 18, 1 9 3 3 y
4
,
\/
Press Releases,Na'^l2.
October 21, 1933.
5
Press R e l e a s e s ,N<$212«
v/
October 21, 1933.
115
F i r s t , now that the Panama Canal had been completed, the
provisions of the treaty of 1903 between the United States
and Panama contemplated the use, occupation, and control
by the United States of the Canal Zone for the purpose of
the maintenance,
the Canal.
operation, sanitation and protection of
Second, in view of the purposes for which the
United States used the Canal Zone, Panama was recognized
as being entitled to take advantage of the geographical
situation which she occupied,
so long as this exercise of
opportunity did not in any way prejudice the maintenance,
operation,
sanitation and protection of the Canal.
Panama
was hailed as a sovereign nation in this portion of the
statement, and the United States was said to be ” ...
earnestly desirious of the prosperity of the Republic of
Pan a m a 1*.
Third, the United States volunteered to arbitrate
any economic question which did not affect the vital interests
of the Canal and which seemed impractical of settlement by
direct negotiation.
These three general expositions of policy were
followed by concrete declarations.
With regard to the activities of the United States
in the Canal Zone, Panama feels that some of them
constitute a competition prejudicial to Panamanian
commerce.
The United States has agreed to restrict
and regulate certain activities; for example, special
vigilance will be exercised to prevent contraband
trade in articles purchased from the commissaries;
for resale on ships transiting the Canal will be
116
prohibited; sales of other goods to ships from the
Canal Zone commissaries will be regulated with the
interests of Panamanian merchants in view.
The services of hospitals and dispensaries in the
Zone were to be restricted to Canal and Panama Railroad
company employees and officials and their families.
The
same restrictions were to be applied to restaurants,
clubhouses and m o v i n g picture houses.'1'
Panama was to receive help in solving the unempoloyment problem:
The United States also intends to request of
Congress an appropriation to assist in repatriating
some of the aliens w ho went to the Isthmus attracted
by construction w o r k of the Canal and have now come
to constitute a serious unemployment problem for
Panama.
The clauses in restaurant contracts which bound
the lessees or contractors to buy provisions from the com­
missaries were to be abolished.
Panama was given the
rights to establish in the terminal ports of the Canal
customs houses and to station guards to prevent smuggling
from the Zone.
The vital portion of this preliminary understanding
from Pa n a m a ’s point of view was the drastic restriction
put on the commissaries, clubhouses, restuarants and moving
The author visited Panama in 1934, 1935 and 1936'
and in the latter year spent several days in the Canal Zone.
Despite the restrictions placed on clubs and restaurants,
the author found no trouble in obtaining service in any
of these institutions.
It was said that the low sanitary
standards observed in Panaman restaurants had forced Zone
officials to ignore enforcement of the restrictions.
Panama
has two fine beer gardens, both American owned, one by the
Womack family.
117
picture houses.
The first portion of the statement pre­
saged a revolution in the American attitude toward the
question of sovereignty in the Canal Zone.
This latter de­
claration was to cause much uneasiness in Congress and in
the V'/ar and Navy Departments when the definitive treaty
came up for ratification.
Tender solicitude for the Panaman "businessman mrould
seem largely misplaced.
The retail business of Colon and
Panama, that is, that portion of the commercial life of
Panama with which the Zone commissaries conflict, is almost
entirely in the hands- of foreigners.-1-
As McCain points out2
the stores of the two cities which adjoin the terminal
ports of the Canal are owned and operated by Hindus, Greeks,
Chinese^,
Japanese, Armenians and others.
Hindu stevedores
on the docks of Panama are not an uncommon sight. Politics and
the professions are the leading occupations for the true
Isthmians; retail trade is their last choice for a career.
The Canal Zone authorities went ahead to put into
operation the details of the Roosevelt-Arias agreement.
By
November the principles outlined In the Washington declaration
-1- The absence of Spanish names is one of the most
striking facts about the shops of Panama and Colon.
2
S
McCain, pp. cit., p. 242.
The Chinese and Japanese own what Is probably the
major share of the restaurants and bars of Panama.
118
were, in theory at least, applied to the Zone and its agencies.
Five days after the joint statement the Panama press
hailed President R o o s e v e l t ’s Good Neighbor Policy as meaning
exactly what it said,
”a square deal and generous justice
for weaker countries ” .1
It now remained to draft the treaty; it was to be
almost six years before the United States Senate would
finally agree to surrender American privileges' in the
Canal Zone by ratifying the treaty.
1
New Y ork T i m e s .
October £2, 1933.
CHAPTER IX
THE TREATY OF 1936
The ways of governments are inscrutable*
Having
secured from President Roosevelt' far more than he probably
had hoped for, President Arias allowed the matter of a new
treaty to languish from mid-October 1933 until the end of May1934*
On the last day of that month President Arias announced 1
that he had decided to n e g o t i a t e s new treaty, and he called
upon the people of Panama to support h i m . A
few days later
he told a press conference that the article in the Panaman
constitution which allowed'the United States to intervene in
Panama could be abrogated without International complications*
Because the United States had dropped the Platt amendment,
Arias felt that the United States would surrender the right of
Intervention in a m e w treaty *2
Dr. Narciso Garay, Secretary of Education,
and Br. Car­
los Lopez were named treaty commissioners in October*
Dr.
G-aray left on the twenty second of October for the United
States, and Lopez followed him a few days later.^
Dr. Alfaro
was added to the treaty group, he being in Washington at his
1
N e w /York T i m e s ,: May 31; 1934.
^ Ibid., June 2, 1934.
3
Ibid., October 22, 1934.
120
old post of Panamanian minister.
The first conference was held on November 5 in the
State Department, and it was announced that the first conver­
sation was most satisfactory.-*-
By November
24 Arosemena,
Panamanian foreign secretary, was able to announce that at
that stage of ,the negotiations Article I of the treaty of
1903 had been cancelled, but no details of the negotiations
could be made public.
The Accion Communal published an al­
leged draft of the new pact, which was at once discredited
rz.
by the Panamanian government.
To the abrogation of Article I of the 1903 pact, BunauVarilla pungently dissented, with more than a modicum of truth,
that4
Sense of gratitude seems to be entirely absent in the
leadership of this little republic which owes its life to
my initiative and to the protection X was happy enough to
obtain for it from the United States President, Theodore
Roosevelt.
They v/ish to eliminate that protection, which
is not very wise . . .
The people of Panama, instead of cherishing the memory
of the historical circumstances owing to which they are
free, rich and independent, and keeping them well pro­
tected, want to forget them.
It appears that negotiations continued through the
winter and spring, and in August the treaty commissioners
3-Press Releases. No. 267, November 10, 1934.
%few York Times, November 25, 1934.
5L o c . c i t .
^Ibid., December 20, 1934.
Varilla.
Letter from Philippe Bunau-
went to Panama to consult their government,
United States in October 1935*-**
returning to the
Before leaving the United
States the commissioners had authenticated'the treaty for
identification purposes,^
and for this reason the Isthmians
were told that the pact would be signed early In the fall.3
The announcement was premature as the negotiations were not
entirely finished, and it was admitted'that two or three points
remained to be settled.
It was expected that these would be
the subject of direct diplomatic representations between the
two governments.^
Mr. Welles, Assistant Secretary of State,
who had been the principal American negotiator,
went on vaca­
tion in August, the understanding being that when the Panama­
nian commissioners returned in the fall the negotiations would
be brought to a formal conclusion as speedily as possible.5
Finally on March 2, 1936, Messrs.- Hull and Welles and
Senors Alfaro and G-aray signed a-series of four agreements as
f o l lows * 6
1.
A general treaty revising in some aspects the con­
vention of November 18, 1903, between the United States
and Panama.
This -treaty Is accompanied by sixteen e x ­
changes of notes embodying interpretations of the new
t r e a t y ”or agreements pursuant thereto;:
I McCain,
og; c i t ., p. 248.
New York T i m e s , August 16, 1934.
^ Ibid., August 2, 1934.
^ Ibid., August 1 6 , 1935*
5 Press Rele a s e s , No. 307? August 17? 1935*
This is
the only press release In 1935 which bears on the negotiation
of the ne w treaty.
6
Press Releases, No. 336, March 7, 1936.
122
2. A convention for the regulation of radio communi­
cations in the Republic of Panama and the Canal Zone, ac­
companied by three supplementary exchanges of notes;
3 . A convention providing for the transfer to Panama
of two naval radio stati o n s ; -and
4* A convention with regard to the construction of a
trans-Isthmian highway between the cities of Panama and
Colon.
A statement which accompanied the publication of the
V
summary reviewed briefly the history of the negotiations,
mentioning that since the abrogation of the Taft agreements
the need for a new arrangement had be e n felt, and that the
basis for the present conventions had been laid by the conver­
sations of Presidents Roosevelt and Arias in October 1933****
The atmosphere was soon rendered even more amicable by
P a n a m a 1s payment bn July 4 of #111,246.25 in satisfaction of
the awards made in favor of American nationals by the G-eneral
Claims Commission under the conventions of July 28, 1926 and
December 17* 1932.
#111,396.25,
0
The actual award to Americans totaled
from which was deducted #3,150.00 awarded to Pana?-
manians•
The general treaty was sent to the Senate,
where Sena­
tor Key Pittman of the Foreign Relations Committee asked that
it be considered behind closed doors because of the "military
1
Press R e l e a s e s , No. 336, March 7, 1936.
2
I b i d ., No. 353, July 4, 1936.
and naval aspects" of the document.**-
On the eve of the signa-?
ture of the treaty, military and naval considerations h a d a l ­
most brought negotiations to a standstill.
It was reported in
the press'tnat the United States^requested that no limit be
placed on Canal Zone military maneuvers in Panama,
and the
foreign minister had made a public statement that Panama could
not sign a treaty which contained 11such an obscure point with
reference to sovereignty of national territories .*!
Sumner
Welles declined to comment on this contretemps on the ground
that 11. . . both governments had agreed not t o discuss'them
(the negotiations) until they were concluded". ^
By mid-April b o t h Mr. Hull and Mr. Welles had made
numerous appearances before the powerful Foreign Relations
Committee of the Senate to answer questions regarding the
treaty.
The going was tough,
since^
The high commands of the army and navy are extremely
dubious about the military and naval provisions of the
treaty, but it is^understood that both services have come
to consider the terms lessvdangerous than they did at
first.
This was the situation as reported by the Times Washington
bureau.
On April 26 the text of the general treaty was published
1 'N e w York T i m e s g April 11, 1936.
2
February 24, 1936.
3 Loc. c l t .
4
Ibid., April 1 1 , 1936.
in the N e w York Times!
It" was reported from Washington
that army and navy officials, who had yet to testify before
the Senate Committee, were perturbed by a convention which
accompanied the treaty and which would “put' vital Canal Zone
p
communications under the control of Panama” *
Three days
later administration leaders abandoned the attempt to secure
passage of the treaty at that session of Congress*^
Reasons
for this action were that the pact had become a campaign issue
in an election in Panama, the desire not to have any violent
debate on the subjedt during the forthcoming Pan-American
Peace Conference and the premature
” , . . revelation of the
Issues involved, through publication of an incorrect draft of
the treaty in the New York T i m e s . • .
Further, the United
States wanted Panama to take action on the treaty first.
The
Panamanian Congress was not in session, and the president was
reluctant to call a special:meeting until after the election,
which was scheduled for June 7 . 5
The Times also found that
some Senators s a w 1,danger of sabotage of the Canal through the
concessions made to Panama.
1
2
3
4
It would seem that the most
Ifcld-., April 26, 1936.
Loc. c i t .
Ibid., April 30, 1936.
Loc. cit.
l2Sf
cogent reason for the delay in acting on the treaty was the
objection raised by the array and navy high commands*
Un­
doubtedly these officials wanted.to make American control
over the Zone as complete as possible,
and saw in the relin­
quishment of sovereignty grave dangers involving the p r o t e c ­
tion of the Canal.
Obviously,
the fears of the army and navy
people would have to be quieted before they would approve the
pact.
Their testimony before the Senate Foreign Relations
Committee, though perhaps not decisive,
could be of ample
force to encompass the defeat of the pact unless it was found
so desirable that other considerations would be outweighed.
This was far from the case.
The treaty was a general sur­
render of rights, and even a Roosevelt-controlled'Senate was
likely to balk at such a surrender.
The treaty was submitted to the Panaman National
Assembly on September 9 by the new foreign minister, Narciso
G-aray, who had been one of the treaty commissioners .-**
The
Star and Herald and The Panama American editorially favored
ratification of the treaty.
The Star and Herald found that
Panama would not gain- all that she wished and all that right­
fully belonged to her, but it was all that na small weak
.1
country like Panama” could obtain.
^
2
, September 10, 1936.
2 Ibid., September 12, 1936.
18&
Dr* Juan Demostenes Arosemena.was inaugurated presi­
dent on October 1.
In his first speech after becoming presi­
dent Arosemena told of his part in drafting the pact*
left approval up to the National Assembly,
He
calling: attention
to the changed attitude of the United States which had re­
sulted from the Good Neighbor Policy*2
The National Assembly passed the treaty on second read­
ing on December 22*
The more pessimistic found that the
treaty had no arbitration clause, and that in all5 probability
regardless of what the pact said the United States would in­
terpret it to suit itself,
as it had the treaty of 1 9 0 3 *2
The next day the treaty was passed, on its third reading by
3
the substantial margin of 27 to 4*
It was now the turn of the United States to balk at a
treaty*
Indications of the troubles that lay ahead have al­
ready b e e n given.
By late July, 1937, President Arosemena
was urging the United States to ratify the treaty*
In ae
p u b l i c 'statement he declared that Panama would do nothing to
impede the passage of American troops from the Zone Into
Panama if such action was necessary to defend the Oanal.^
^ Ibid., October 2, 1936.
2 Ibid., December 23, 1936.
5 I b i d ., December 24, 1936*
4 I b i d ., July 26, 1937-
127:
Arosemena said Panama wished speedy ratification so as to end
American use of lands and waters outside the ten-mile zone as,,
allowed "by the treaty of 1903*
Meanwhile,
it had become known
that some high-ranking American army and navy officers were
-1
still disturbed over the rights Panama would gain*.
On Octo­
b e r 31 the Star of Panama r eported that American opposition to
the treaty was in part based on the totalitarian drift of the
Isthmian government.^
Pepper,
Byfthe end of November Senator Claude
member of the Foreign Relations Committee, was moving
in the Senate that consideration of the pact be put off until
the Far Eastern crisis was over.
Senator Pepper alleged that
under the pact the plans of defending the Canal would have to
be altered greatly, a thing that would require months or even
years to bring to completion.
While the treaty reposed peacefully in the bosom of the
Senate.Foreign Relations Committee, Panama was "acting up"
over the Canal annuities^
W h e n the United States reduced the
gold content of the dollar Panama refused to accept the Canal
annuity oh the basis of $250,000.
The first such refusal came
A
in 1934.
On M a y 24, 1938, President Arosemena announced
that Panama would make no more payments on the five and a half
'n
2
Loci cit *
I b i d ., November 1, 1937.
3 Ibid., November 29, 1937*
. 4 Ibid., M a rch 7, 1934. .
126
per cent Ponds of 1923 until the United States paid the a r ­
rears on the annuity.
due,
Panama claimed that $2,000,000 was now
and it would not divert money from the general revenues'1
I
■’
to meet the interest payments on the bonds, due June 1.
In
September Arosemena declared in opening the National Assembly
that"relations with the United States would be more cordial
if the treaty were ratified.
Panama intimated that unless":
bond-holders were willing to taice a reduction in the interest
rate on their holdings,
there would be no payments.2
Secretary of State Hull passed through Panama on
November 30 on his way to the Lima Conference.
He expressed
the belief that the-treaty would be ratified and refused to
comment on the alleged opposition of*army and'navy offlcials.3
On his return from Lima on January 3, Hull again passed through
Panama and conferred with Arosemena, but no details of the .
conversation were made public*4
On June 15, 19.58, the four conventions had all been
reported favorably by Senator Pittman, no reservations being
demanded by the Committee on Foreign Relations,
5
but more
than a year,was to elapse before final ratification.
By March of 1939 it was reported that the opposition of
^ N e w 1York T i m e s , May 29, 1938.
2 I b i d ., September 2, 1938.
^ Ibid., December 1, 1938.
^ Ibid., January 4, 1939.
5 Congressional R e c o r d , Senate.
session, Vol. 83, Pt. 8, p. 9419. •
75th Congress, 3rd
1£9
army and navy officials had been withdrawn.
President Roose­
velt gave a boost to the Panamanian ego on March 13 when he
raised the legation in Panama to the rank of embassy-*-
and
appointed William Dawson, a career diplomat'of Minnesota,
first' ambassador.
The ostensible reason for this action, in
the ?/ords of the State Department, faa to further friendly
relations, for "an ambassador is in better position to obtain
such relations than a minister”
The withdrawal of army and navy opposition was the re­
sult of an understanding between the two governments affected
by an exchange of notes, all dated February 1, 1939.
Mr. Hull
wrote the Panamanian minister that members of the Senate in
their consideration of the treaty,
11. . . may ask for c l ari­
fication as to the precise meaning of certain important p r o ­
visions of the General Treaty which affect the security and
neutrality of the Panama Canal". 3
Mr. Hull” then set forth
the interpretation which the United States placed on three
provisions of the treaty.
First, the word "maintenance" as
applied to the Canal was to be so construed that the United
States could expand its facilities in the Zone and undertake
new construction.
Second, the holding of army maneuvers in
Panama was assured.
Third,
in the event of great emergency
^ N e w vYork T i m e s , March 14, 1939*
^
Loc. c i t .
3
Department of State, Treaty S e r i e s , No. 945 > p. 63*•
T3G
w h e n it would be impossible to consult with Panama, in advance
due to lack of time, the United States was allowed to take
such measures for the protection of the Canal as were deemed
necessary
The Panamanian minister replied that the interpreta­
tion's given by Mr. Hull on the three points in question co­
incided with the Panamanian view.
It was probably this exchange of notes which Senator
Pittftan found 11conclusive11 in clearing the way for ratifica-t i o n of the pact.2
A subcommittee of the Senate, headed by
Senator George, was not so easily impressed and demanded to
know whether the National Assembly of Panama had had before it
the minutes of the negotiations when it ratified the pact.
The minutes went into all phases of the negotiations In full
detail and laid the foundation for the Hull note of February 1.
H a d the National Assembly not had access-to these notes, there
might later on have been a question of the interpretation
agreed upon b y the American and Panamanian foreign departments,
and also upon the authority of these two governmental agencies
to construe a bilateral pact,
which had been ratified by only
one party, in a way so that the second party was induced to
passnthe pact,
the first ratifier having acted before the
**• Department of State, Treaty S e r i e s , No. 945, pp. 63-64.
2
New York Times, June 15, 1939.
130i
interpretive notes were exchanged.
The minutes of the n e g o ­
tiations indicated the intention of the treaty commissioners,
and set forth completely,
in a way not possible in a formal
£reaty, the exact interpretations and understandings reached.
A ’knowledge of these minutes made it impossible for the Pana^
manian National Assembly later to repudiate the Hull notes,
since they merely restated in concise form the understandings
incorporated in the minutes.
On July 24 the Senate failed to muster a quorum for
consideration of the treaty.
Senator Johnson,
of California,
attacked the proviso that Panama aid the United States in the
protection of the Canal.
Realistically,
the California Sena­
tor found that l,Panama .has: never been of any help to the
United States and I venture to say never will be of any help.11^
The debate centered around concessions of former Canal Zone
territory to Panama.
Senator Pitttnan pleaded for ratification
on the ground that nothing would do more to win a friendly
atmosphere for this country in Latin America.
Senator B'Orah
added his endorsement to the pact, but an amendment making
American rights in the Zone and its vicinity more explicit
was^offered, and again the question of whether the Panamanian
National Assembly had known the details of the negotiations
when it ratified the pact came up*
p
1 M e w York Times* July 25, 1939*
2 Loc. cit.
13B
On July 2 5 Mr* Hull obtained a note from the Panamanian
minister in which the latter stated that the Panamanian N a ­
tional Assembly had, in accordance with the constitution,
seen
the minutes of the negotiations before it ratified the pact#-*'
The treaty was finally ratified by the Senate, 65 to 16,
fifteen Senators not voting*2
with
The treaty passed without amend­
ment, although at the last minute an attempt was made to change
the pae:t so that in case of emergency it would not b e neceshary
for the United States to consult Panama before sending troops,
into that country.
This amendment was offered by Senator Con-
nally and was beaten 49 to 30, after Senator Pittman read the
Hull note covering this point to the S e n a t e *3
The amendment -
covering a-more concise definition of American rights was withdrawn by its author, Senator Gerry.
4
Almost unnoticed,
the
trans-Isthmian highway treaty was passed the same day without
a record v o t e *5
amendments were offered to this pact.
The
treaties covering the transfer of the two naval radio stations,
and the regulation of radio communications, although reported
favorably out of committee,^ received no further consideration
1 Department of State, Treaty Series, No. 945, pp. 68-69**
11
Congressional R e c o r d , Senate.
76th Congress^ 1st
session, Vol. 8-4, Pt. 9, p. 9907*
3
NewvYork Times, July 26, 1939*
Loc . cit.
Congressional R e c o r d , Senate.
76th Congress, 1st
session, Vol. 84, Pt. 9, pp. 9907-9908.
6
Congressional R e c o r d , Senate.
75th Cbngress, 5rd
session, Vol. 83* Pt. 8, p. 9419.
Known as Executive C and D
(Exec* R e p t s . , Nos. 18 and 19)*
13*
at this time*
But the main objective,
the general treaty,
had been passed*
The treaty consists or eleven articles, exclusive of
the article outlining the ratification procedure*
Forsaking
the usual method of analyzing a treaty article by article,
method frequently clumsy and confusing,
a
the provisions of the
pact, may be set forth in the following manner:^
PANAMA GAINS
1.
Article I of the treaty of 1903 was revoked,
re­
moving any stigma of "protectorate" that might attach to Panao
m a Ts sovereignty.
(Article I, treaty of 1936).
2.
The United States renounced its right in perpetuity
to lands and waters outside the Canal Zone*
XArticle II, 1936
cancels latter portion of Article II, 1903)*^
3*
The United States renounced in a broad way its
commercial privileges,
limited the sales of commissaries, the
sales to ships, and also limited the use of laundries, moving
picture houses, restaurants,
e t c 4, maintained in the Canal
**• Department of State, Treaty S e r i e s , No. 945, PP* 1-21
Body of text, pp. 1-21; ratification proclamation, p. 22; ex­
changes of notes, pp. 23-69*2
The treaties of 1936 and 1903 will be referred to in
this list by their numerals, 1936 and 1903, alone.
The United States under Article VI, 1936, retains the
right to obtain lands and waters outside the Zone by purchase.
The privilege of obtaining lands by right of eminent domain,
as provided by Article VII, 1903, was surrendered by the
United States.
134
Zone.
(Article III, 1936).1
A.
The United States limited the classes of persons
who could rent houses in the Zone.
(Article III,
Section 3)•
B.
The United States limited the private "businesses
that might operate in the Zone.
C.
(Article III, Section 5)*^
The United States pledged its aid to Panama to
stop the smuggling of goods from the Zone into Panama.
(Article III, Section 4).
D.
The United States surrenders its right to make
unrestricted use of the harbors of Colon and Panama.
These
harbors could be used by the United States only in time of
emergency.
E.
(Article III, Section 6)..
The merchants of Panama were granted the n e ces­
sary facilities in order for them to visit ships transit­
ing the Canal.
4.
(Article III, Section 7)*
Article IX, 1903, was repealed and Panama was given
permission to levy harbor, pilot, anchorage,
etc., fees on
American ships used in connection with the Canal,
ships made use of Panamanian harbors.
if those
Ships transiting the
Canal and not touching at Panamanian harbors were to remain
free from any Panamanian tax,
as in the past.
(Article V, 1936).
For details of the limitations imposed,
2
see Appendix.
Private enterprises exempt from this^restriction were
those engaged in the operation of cables and telegraphs, ship­
ping, the selling of fuel oil to ships using the Canal, et<r«
Existing private businesses were also exempt.
13b
5*
The United States agreed to furnish Panama with
sites in the Ganal Zone where customs houses could be built.
Panama is to use these customs facilities for the inspection
of baggage, merchandise and passengers arriving in the Canal
Zone and destined for Panama points.
6.
(Article V, 1936).^
Panama was granted the right to have its immigra­
tion officials visit inbound liners off Cristobal and Balboa
for the purpose of examining passengers bound for Panama
points.
(Article V, 1936).
7-
The United States surrenders the right to acquire
lands and waters in Colon and Panama by use of the right of
eminent domain.
8.
(Article VI, 1936).^
Tiie United States renounced its right to intervene
in the cities of Panama and Colon to preserve order.
VI,
1936, cancelling specifically Article VII,
9.
(Article
1903)*
The United States^agreed to pay the Canal annuity,
beginning with the 1934 payment, in balboas.'
The payment is
to be reckoned at 430,000 balboas, it being agreed that this
sum shall represent the equivalent of $250^000 in gold.
^ Most shipping lines seem to prefer to use Canal Zone
ports rather than Panamanian.
This is probably due to the
superior facilities in the Zone ports.
The author knows of no
steamship line sailing to Panamanian ports.
2
Article VI, 1936, reenforces the provisions of Article
II, 1936, in this regard, but the force of Article II Is weak­
ened by the provision that the United States may still requi­
sition lands outside the Zone in the event.of “ some now unfore­
seen contingency11. This fatter provision seems to vitiate the
force of both Articles II and VI.
136
10*
f
!h.e United States ceded to Panama a narrow strip
of land in the Canal Zone so that the city of Colon might be
linked by an all-Panama route with the rest of Panama.^UNITED STATES GAINS--*
The United States made only one gain*
This was a
s m a l l \strip of land linking the Canal Zone with the site of
Madden Dam, and given to the United States by Panama-.so that
the power lines from the dam to the Zone might traverse t e r ­
ritory under American jurisdiction.
(Article IX, 1936).
The series of sixteen notes, which Mr. Hull and the
Panamanian commissioners exchanged on the day the treaty was
signed, covered the following points:
1.
The treaty covered all possessions of the United
States on the Isthmus, whether in the Canal Zone or not.
2.
W i t h reference to those allowed to purchase in the
commissaries, this class was specifically said to consist of
officers,
employees*' laborers and workmen of the Panama Canal,
the Panama Railroad Company and their auxiliary works, and to
duly accredited representatives of any branch of the government
of the United States exercising official duties in the Republic
of Panama, including diplomatic officers and consuls.
Colon occupies a large thumb of land almost completely
surrounded by water.
The very narrow strip of land which con­
nects Colon to the mainland is about four hundred yards wide,
and is a portion of the Canal Zone.
137
.
3,
J
Panama recognized the right of a small number of
truck gardners and hucksters to live and cultivate ground in
the Zone in order to supply residents with vegetables,
4.
The temporary guests of the Canal Zone hotels were
exempt from Zone residential restrictions; the United States
was to withdraw from the hotel business when Panama is able
to meet the demand with, institutions
5*
of her own.
Servants of those allowed to reside in the Zone
were permitted to purchase food, clothing and medicines.in
the commissaries.
6.The United States was to withdraw from
warehouse,
the bonded
business as soon as Panama has institutions capable
of assuming the business now conducted in Zone w a r e h o u s e s . 7
.
Facilities of lunch rooms, restaurants, hospitals,
moving picture houses,
be limited.
clubs,
etc^,
in the Canal Zone are to
These facilities will not be available to passen­
gers and members of crews of ships transiting the
8.
The United
States was to cooperate
Canal.
with Panama in
stopping smuggling from the Zone into Panama.
9
.
The ban on private businesses in the Zone shall
not be extended to temporary private enterprises which are en­
gaged
in construction work in connection with
10.
Schedules
of various classes of goods sold in the
Zone to ships must be kept.
11.
the Canal.
See Appendix A.
Panama makes a special reservation of its rights
135'
in connection with commissary sales.
12.
The right of the Panama Railroad Company to oper­
ate port facilities under its concession,
and the reversion­
ary rights held by the United States to continue this practice,
were confirmed.
13*
'^he right of Panama to exclude such persons as it
wishes does not prejudice the right of persons employed by
the United States in the Zone to enter the Republic of Panama*
14.
Health agreements regarding Panama and Colon were
to be concluded by the appropriate authorities of the two
g o v e rnments♦
15.
Details of the negotiations looking to separate
settlement of the water works and sewer question.
16.
Panamanian citizens were guaranteed equality of
opportunity for employment on government works in the Zone.
The special provisions of the monetary agreement re­
duced the gold content of the balboa so that it was made equal
to the dollar.
In effect, Panama wasto receive about |7>500
more per year than under the gold payments.
The United States
was relieved from accepting payment or Canal tolls in Panama­
nian silver.***5
Besides these notes,
signed at the same time as the
treaty, the Hull note of February 1, 1939*2 with its three'
*** Department of State, Treaty S e r i e s , No. 94-5* PP* 58-60.
^ Cf. ante., p. 109*
13.9
provisions must be considered a portion or the explanatory
material which accompanied the general treaty.
contained two general provisions,
by the Hull note.
The treaty
one of which was amplified
This article provides that in Case of in­
ternational conflagration the two governments shall consult
together as to the best means to be adopted for the protection
of their common interests.
The second general article stipu­
lates that the treaty of 1903 shall remain in force', the pre­
sent treaty in no way limiting or restricting the earlier
pact,
except^ that those specific additions, abrogations and
modifications made by the treaty of 1936 shall supersede the
relevant clauses and provisions of the treaty of 1903*
^ Author*s italics.
CHAPTER Xu
SUMMARY A N D CONCLUSIONS
N o detailed comment on the- treaty of 1936 seems n e ces­
sary.
In large measure Panama achieved all of her major ob­
jectives and a number of minor ones.
For the United States
the treaty was merely a rear-guard action in which this coun­
try was lucky to have escaped from the diplomatic battlefield
with what it did.
The present administration in Washington which has
carried forward the Good Neighbor policy first formulated by
Herbert Hoover, was in power in 1933 when President Arias made.
his famous trip to Washington, and has continued in power
through the negotiation and ratification of the treaty.
Pres­
ident Roosevelt has followed a policy of placating Latin A m ­
erica.
There was no greater sore spot than Panama, and here
the United States leaned over backwards to accommodate itself
to the wishes of the Isthmians.
position in this country,
That this policy met with o p ­
from those persons charged with the
defense of the Canal, has already been shown.
Panama was brought into being to make the Canal possible.
As a political entity it was no more than a protectorate of
the United States.
This was the position clearly marked out
for it by the treaty of 1903*
The position of Panama with
regard to finances, radio communications,
railroads and other
141
matters of vital internal concern has been shown,
Panama
made no moves without the consent, tacit or implicit of the *
State Department in Washington*
debit side*
This has not all been on the
Panama has been saved from foolish and b u rden­
some expenditures during the years that she was growing into
nationhood.
The position p f Panama athwart the Isthmus has
been tempting to every type of adventurer, and the steadying,
If restraining,
hand of the United States hassnot always been
stretched forth to strangle Panama, as some weepy antiimperialists would have one believe.
The treaty of 1926 was drawn by the United States upon
the same fundamental premise that had been the basis of the
treaty of 1903; that Panama was a protectorate of the United
States*
That treaty showed no change in the American attitude,
and it contained some few concessions to Panama, but in es­
sence it represented a continuation of the policy inaugurated
in 1903.
The treaty of 1936 was drawn in a far different atmo­
sphere.
The G-ood Neighbor policy is one of cooperation and
helpfulness,
with all nations meeting as equals around the
conference table.
The treaty granted P a n a m a ’s two great wishes.
First, the protectorate established by the first article of
the treaty of 1903 was removed and the limited nature of the
sovereignty enjoyed by the United States in the Canal Zone was
recognized.
Second, and of more importance from a practical
142
point of view, the commissaries and many other commercial
activities of the United States were curbed*
Also looming
large, but taking place well behind these two points were the
surrender of the right of eminent domain in connection with
lands in Colon, the surrender of the privileges of free use
of Panaman harbors,
the surrender of the right of interven­
tion in Panama and Colon and the customs and inspection rights
granted.to Panama*
Panama was not quite able to achieve the surrender of
the right by the United States to intervene with armed forces
in Panama in case-of international crisis in order to protect
the Canal.
The army and navy authorities balked at this, and
it took an exchange of notes to confirm and make clear this
right*
Panama also had to confirm the right of the United
States to hold military maneuvers on Panamanian soil, and the
right to acquire additional lands for use of the Canal was
grudgingly given*
Panama won her independence in the treaty of 1936 as
far as she will ever have complete independence *
Canal is too important,
But
the
it is too large an investment, and it
is too hard to defend, being so far from the United States,
for the State Department ever to grant to Panama all of the
things that she wants*
In the last analysis,
when tne Canal
is threatened, no policy, G-ood Neighbor or other, will stand
in the way of the army and navy making their own arrangements,
14i3
and in their own time, place and manner,
the C a n a l •
Until that time comes,
for the defense of
if ever, Panama is free
to enjoy the fruits of the treaty of 1936*
BIBLIOGRAPHY
BIBLIOGRAPHY
A.
GOVERNMENT PUBLIGATIONS
Congress^
Cdngresslonal Record
62nd. Congress/ 2nd session
69th Congress, 2nd session
75th Cdngress^ 3rd session
76th Congress, 1 s t - session
Senate Documents
61st Congress, 2nd session, No. 357*
Treaties, Conventions, International Acts, Protocols
and Agreements between the United States of America
and Other Powers.
Edf William M. Malloy.
2 vols.
67th Congress/ 4th session, No. 348.
Treaties, Conventions, International Acts, Protocols.,
and Agreements between the United States of America
and Other Powers.
6?th Congress, 2nd session, No. 248.
Department of State
Hunt, Bert L*, American and Panamanian General Claims Arbi­
tration under the Conventions between the United States
and Panama of J u l y 2 8 , 1 9 2 6 f""and December 17, 1 9 5 2 .
Washington,~TArbitration series, N o . 6), 1934*
Papers Relating to the Foreign Relations of the United
S t a t e s , 1903-1925.
Washington, 1904-197)O.
Press R e l e a s e s , 1929-1939*
-Treaty S e r i e s , Nos. 7 0 7 j 861, 945, and 946.
B.
OTHER DOCUMENTS
League of Nations, Official Journal* Eighth Ordinary Session
of the Assembly.
Special Supplement, No. 54*
C'i
BOOKS?
Bunau-Varilla, Philippe, The G-reat Adventure of Panama^
New York; Doubleday, Page, and Company, 1920..
McCain, William D., The United'States and the Republic off
P a n a m a . Durham, North C a r o l i n a : Duke University Press,
1937 •
Miller, Hugh Cbrdon, The Isthmian H i g h w a y .
Macmillan Company, 1929*
Newv Y o r k T h e
Miner, Dwight Carroll, The Fight for the Panama R o u t e .
York: Columbia University Press, 1940.
D.
New York Times, 1922-1939*
NEWSPAPERS
New,
BIBLIOGRAPHICAL NOTE
The author has sought so far as the resources of the
available libraries have been concerned to base this paper
upon official government documents.
The Congressional Record
has been of service in giving the text of the treaty of 1926,
and in connection with discussions of Panamanian affairs.
The
excellent series of the State Department published under the
title of Papers Relating to the Foreign Relations of the United
S t a t e s , has been invaluable for the period from 1903 to 1926.
Unfortunately this series is published about fifteen years
after the events described took place.
and notes are omitted.
Also,
some dispatches
The P r e s s -Releases of the State De­
partment were first published in 1929, and while satisfactory
in the absence of other material,
and touch only the high points.
they are of necessity brief
The N e w York Times has been
of great value in making possible a running account of various
events, particularly the revolution of 1931*
The author recog­
nises that the value of this study is much impaired by the
lack of Panamanian sources,
but this material appears to be
available only in the large libraries of the east, and in manu­
script form in. various places.'
Dr. Miner's book is of recent publication and may per­
haps be called a definitive study of the background of the
revolution of 1903, so far as American-Colombian-Panamanian
relations are concerned.
Dr. Miner had access to m uch manu-
148
script material.
Dr. M c C a i n ’s study is well documented, but
he has set himself an ambitious pro j ec.t in studying Panama
from pre-Spanish times to the present in a volume of two hun­
dred and fifty pages.
It is, nevertheless,
the best study the
author has found on the subject of United States-Panamanian
r el a t i o n s .
APPENDIX
APPENDIX A'
Schedules and classifications of goods which may he
sold by the commissaries to ships transiting the Canal, t o ­
gether with lists of restricted goods which may not be sold.^*
I
The following goods may be sold by the commissaries:
A.
Articles classed by the Panama Canal authorities
as Hships stores11, such as articles, materials and supplies
necessary for the navigation,
B.
propulsion and upkeep of vessels.
Articles classed by the Panama.Canal authorities
as 11sea stores11,, such as articles for the use or consumption
of the passengers and crew of the ship upon its voyage,
and
articles of other classes,2 will be sold at prices which,
in
the judgment of the G-overnment of the United States and Inso­
far as may appear feasible, will afford merchants of Panama
fair opportunity to sell oh equal terms.
II
The following goods may not be sold by the commissaries':
Articles classed by the Panama Canal authorities as
tourist or luxury g o o d s *.
1 Department of State, Treaty Series, No* 945 > PP* 4-3-45*
2
Articles of other classes are comprised in list IV.
Cf. a n t e * , p. 121.
APPENDIX B.:
I
SHIPS*
STORES
Fuel
Oil and grease
Hardware ('bolts, nuts, nails,
tools,
etca)
Paints
Disinfectants and insecticides
Rope, cable, cahin
II
SEA STORES
G-oods only of standard quality and almost without
exception of American source
Food supplies
Medical supplies.
Stationery and stationery supplies
Galley and table utensils and equipment
Table and bunk linen
III
TOURIST OR LUXURY GOODS
Articles of personal adornment
W o m e n ’s and children’s fancy and foreign wearing
apparel
Perfumes and expensive lotions and fancy and for­
eign toilet articles
Foreign high quality linens, table ware and house
furnishing articles
153
Tourist or Luxury G-oods (Continued)
Expensive and foreign "bolt goods
Men*s. foreign articles and wearing apparel
Panama hats
Liquors/ wines and beer
IV ARTICLES OF OTHER CLASSES
G-oods similar to those listed under sea stores, but
of better than standard quality
Many articles of many classes,
department stores,
such as those sold in
excepting those articles classed
■under "tourist or luxury goods" .
These four lists were to be considered illustrative
of the goods in the various classifications, but were not
considered by the United States to be exhaustive.
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