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The principle thus asserted by Mr. Adams was afterwards sustained by an international commission in respect to the precise stipulation to which he referred; and a similar position was taken by the United States with regard to the binding obligation upon the independent State of Texas of commercial stipulations embodied in prior treaties between the United States and Mexico when Texas formed a part of the latter country. But in the present case it is unnecessary to go so far. Even if it be admitted that prior treaties of a political and commercial complexion generally do not bind a new state formed by separation, it is undeniable that stipulations having a local application to the territory embraced in the new state continue in force and are binding upon the new sovereign. Thus it is on all hands conceded that treaties relating to boundaries and to rights of navigation continue in force without regard to changes in government or in sovereignty. This principle obviously applies to that part of the treaty of 1846 which relates to the Isthmus of Panama.

In conclusion let me repeat that the question actually before this Government is not that of the recognition of Panama as an independent republic. That is already an accomplished fact. The question, and the only question, is whether or not we shall build an Isthmian canal.

I transmit herewith copies of the latest notes from the minister of the Republic of Panama to this Government, and of certain notes which have passed between the special envoy of the Republic of Colombia and this Government.

THEODORE ROOSEVELT. WHITE HOUSE,

January 4, 1901.

ATTITUDE OF THE UNITED STATES GOVERNMENT IN THE EVENT OF THE COLOMBIAN GOVERNMENT LANDING TROOPS IN THE REPUBLIC OF PANAMA.

DEPARTMENT OF STATE,

Washington, January 4, 1904. The PRESIDENT:

The undersigned, Acting Secretary of State, has the honor to lay before the President copies of the notes exchanged between General Reyes and the Secretary of State concerning this Government's attitude in case Colombian troops should be sent to the Republic of Panama; also copies of two notes addressed to this Department by the minister of the Republic of Panama at this capital, the first stating that it is the purpose of the Government of that Republic, as soon as its independence shall have been recognized by the Government of the Republic of Colombia, to assume a portion of the exterior debt of Colombia proportionate to the relative populations of the two Republics; the second in regard to the method of payment of the $10,000,000, the payment of which by the United States to Panama is stipulated by the convention concluded between them on November 18, 1903. Respectfully submitted.

Francis B. LOOMIS,

Acting Secretary.

[Translation.]

LEGATION OF COLOMBIA ON SPECIAL MISSION,

ARLINGTON HOTEL,

Washington, D. C., December 8, 1903. MR. SECRETARY: I have the honor to address your excellency for the purpose of stating respectfully that I have received from my Government instructions to inquire what attitude would be assumed by the Government of the United States in the event which may take place of Colombian troops or forces under the Colombian flag making their appearance on the Isthmus, or attempting a landing on that territory, for the defense of the sovereignty and integrity of Colombia, and respecting the railroad line and the terminal points in accordance with the stipulation of the treaty of 1846, which my country is ever ready to observe. I salute your excellency with my distinguished consideration.

RAFAEL REYES. Hon. John Hay, Secretary of State of the United States,

Department of State.

No. 1.]

DEPARTMENT OF STATE,

Washington, December 11, 1903. Sir: I beg leave to acknowledge your communication of December

ment to ask "what attitude would be assumed by the Government of the United States in the event, which may take place, of Colombian troops or forces under the Colombian flag making their appearance on the Isthmus, or attempting a landing in that territory for the defense of the sovereignty and integrity of Colombia, and respecting the railroad line and the terininal points, in accordance with the stipulation of the treaty of 1846, which my country is ever ready to observe.”

I have quoted your question textually, and in reference to it I am instructed by the President to bring to the attention of your excellency the following facts: That the Republic of Panama proclaimed its independence on the 3d of last month; that in consequence of this movement the independence of Panama has been recognized by this Government and by many others; that a treaty has been signed between the United States and Panama, which has been ratified by the latter State and is now waiting ratification by the American Senate; that by the provisions of the said treaty the United States agrees to maintain the independence of the Republic of Panama; that although the treaty has not yet become law by the action of the Senate, there are already inchoate rights and duties created by it which place the responsibility of preserving peace and order on the Isthmus in the hands of the Government of the United States and of Panama, even if such responsibilities were not imposed by the historical events of the last fifty years.

In view of these facts I am instructed to say to your excellency that the Government of the United States would regard with the gravest concern any invasion of the territory of Panama by Colombian troops, for the reason that bloodshed and disorder would inevitably result throughout the whole extent of the Isthmus, and for the broader reason that, in the opinion of the President, the time has come, in the interest of universal commerce and civilization, to close the chapter of sanguinary and ruinous civil war in Panama. I have the honor to be, sir, your obedient servant,

John Hay. Gen. RAFAEL REYES, etc.

LEGATION OF COLOMBIA ON SPECIAL MISSION,

Washington, December 29, 1903. EXCELLENCY: On the 13th instant I telegraphed to my Government, pointing out the expediency of awaiting the result of my mission to the Government of the United States before moving forces on the territory of Panama to subdue the insurrection To that telegram I have received a reply which reads as follows:

Bogotá, December 26. Before the arrival of your telegram of the 13th, Colombian forces had entered the Panama territory with the object of subjugating the rebels. The Isthmus traffic will not be interrupted. Communication with commanding officers is difficult and very slow. Obtain from the Government of the United States official statement that military action to subjugate rebels will be declaration of war. Such a statement will not impede action. Government requires such statement in order formally to determine its attitude and support it before the nation and history. Press for prompt categorical answer.

As a reply to the quoted telegram of my Government is extremely urgent, I beg that your excellency will tell me whether the military action of the Government of Colombia to subjugate the Panama rebels would be held by the Government of the United States to be a declaration of war. I have the honor to be your excellency's humble and obedient servant,

RAFAEL REYES. To His Excellency the Honorable John Hay,

Secretary of State of the United States.

DEPARTMENT OF STATE,

Washington, December 30, 1903. DEAR MR. MINISTER: I have received the letter which you have done me the honor to address me under date of yesterday, in which, obeying the instructions of your Government, you ask me to say whether the invasion of the territory of the Republic of Panama by Colombian soldiers will be considered by the United States as a declaration of war.

I beg to remind your excellency that when, on the 8th of December, you addressed a similar question to this Department I replied on the ilth, reciting the following facts:

That the Republic of Panama proclaimed its independence on the 3d of last month; that, in consequence of this movement, the independence of Panama has been recognized by this Government and by many others; that a treaty has been signed between the United States and Panama which has been ratified by the latter State and is now awaiting ratification by the American Senate; that by the provisions of the said treaty the United States agrees to maintain the independence of the Republic of Panama; that although the treaty has not yet become a law by the action of the Senate, there are already inchoate rights and duties created by it which place the responsibility of preserving peace and order on the Isthmus in the hands of the Government of the United States and of Panama, even if such responsibility were not imposed by the historical events of the last fifty years.

I then had the honor to inform you that

The Government of the United States would regard with the gravest concern any invasion of the territory of Panama by Colombian troops, for the reason that bloodshed and disorder would inevitably result throughout the whole extent of the Isthmus, and for the broader reason that, in the opinion of the President, the time has come, in the interest of universal commerce and civilization, to close the chapter of sanguinary and ruinous civil war in Panama.

In reply to your question received yesterday, I can only reiterate what I had the honor to say on the 11th of this month, and to add that the time which has elapsed since then has only tended to deepen the painful impression which would be created in this country by the armed invasion of Panaman territory by Colombian troops, and the sense of the responsibility which would thereby be imposed on the Government of the United States; but that the formal action we should take upon such a contingency must be determined by the circumstances of the case. I am instructed further to inform you that this Government has only the friendliest intentions toward Colombia, and will not lightly be provoked into assuming a hostile attitude toward that Republic. I have, etc.,

JOHN HAY. Gen. RAFAEL REYES, etc.

INTENTION OF GOVERNMENT OF PANAMA TO ASSUME PORTION OF EXTERIOR DEBT OF COLOMBIA. METHOD OF PAYMENT OF $10,000,000, THE PAYMENT OF WHICH BY THE UNITED STATES TO PANAMA IS STIPULATED IN TREATY OF NOVEMBER 18, 1903.

The Minister of Panama to the Secretary of State.
THE LEGATION OF THE REPUBLIC OF PANAMA,

Washington, D. C., December 31, 1903. DEAR Sir: The treaty of the 18th of November, 1903, provides for the payment to the Republic of Panama of the sum of $10,000,000 after the exchange of ratifications.

The Government of the Republic of Panama has always been anxious to insure a proper and useful employment of said sum. The delegates of the Government, Doctor Amador and Señor Don Frederico Boyd, bave repeatedly told me that the principle which the Government intended to carry out for the employment of said sum was, not to invest any part of the capital in anything but consistent works which would permanently represent the counter value of the expenses incurred.

According to this principle the Government expressed the desire to take only $2,000,000 out of the $10,000,000 from the United States Treasury after exchange of ratifications, leaving the remaining $8,000,000 in the United States Treasury to be later on employed according to the necessities of the future and to the principle which I explained above.

At the same time the Government desired that this sum should be productive of interest in order to help to obtain the equilibrium of the budget.

According to the recommendations that were made to me by the Government of the Republic, I was requested to ask the Government of the United States if it would accept to pay an interest of 3 per cent on the sum remaining in its hands out of the total sum of $10,000,000 provided for in the treaty of the 18th of November.

The interest to be paid on the $8,000,000 that the Government intends now to leave in the American Treasury would be $240,000.

The expression of this desire of my Government came by mail after the signature of the treaty, and I did not feel justified at that moment to call your attention to this point on account of the more important matters which required your attention, but now that the situation has progressed and that the Treasury Department may be considering the measures to be taken in the event of a prompt ratification of the treaty, I feel justified in submitting the case to your excellency, so that if the United States Government thinks the intentions of the Republic of Panama in harmony with its own, a special convention may be drafted to settle this particular point. I am, sir, with great respect, your very obedient servant,

P. BUNAU-VARILLA. His excellency John Hay,

Secretary of State, Washington, D. C.

The Minister of Panama to the Secretary of State.

LEGATION OF THE REPUBLIC OF PANAMA AT WASHINGTON,

Washington, D. C., December 31, 1903. DEAR SIR: I have the honor of bringing to your knowledge that by a telegram received during the night of the 21st of December, I have been authorized by my Government to declare that the Republic of Panama, as soon as its independence shall be recognized by the Republic of Colombia, intends to assume a part of Colombia's exterior debt, of which the principal was settled at £2,000,000 by special convention and which is now accrued by the unpaid interest. The Republic of Panama has determined that the proportion of that debt it is ready to assume will be equal to the proportion between its population and the population of Colombia, a proportion which is not very far from 1 to 15.

I beg, sir, to call your attention to the fact that the Government of the Republic of Panama in making such declaration is actuated by the desire of showing its good faith and its liberality toward the citizens of foreign countries who may think they bave a just claim against it rather than by the sentiment that by right they owe any part of the Colombian debt.

The distribution according to the number of inhabitants of the two Republics would be just only if it could be established, which is generally the case, that the money has been employed for the common utility of all the parts of the Republic and that Panama has enjoyed its share of it. On the contrary, this distribution is not just and ought not to be made in strict right if, as is this case, no part of the loans were ever employed for the benefit of the State of Panama, now the Republic of Panama. Since its union to greater Colombia, for the liberation of which said loans were made, the State of Panama has never received any money from the mother country, but, on the contrary, it has sent to it very important sums, and one can say, as a rule, that the funds never went from Bogotá to Panama, but always from Pan

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