In addition the following persons were designated by the War and Navy Departments, to assist in the defense of cases in which their respective Departments were especially interested:

H. A. A. Smith

Major J. A. Parker

Hugh McGrath

Legal Adviser to the Washington Office of the Panama Canal

Office of the Judge Advocate General of the War Department

Attorney in the Office of the Judge Advocate General of the Navy Department

In the De Sabla claim (Docket Registry No. 11) the Agency was assisted by the Honorable Lester H. Woolsey, former Solicitor of the Department of State, and Mr. Edward F. Yardley, and in the claim of the Mariposa Development Company et al. (Docket Registry No. 15) by the distinguished international lawyer, publicist, and jurist, the Honorable Jackson H. Ralston.

The American Joint Secretaryship was originally filled by Mr. Benedict M. English and later by Mr. Walter E. Pelton.

Respectfully yours,

BERT L. HUNT
Agent for the United States

REPORT

BRIEF HISTORY OF THE ARBITRATION

Panama declared its independence from the Republic of Colombia on November 3, 1903.

The relationship of the Governments of the United States and Panama since that date has been more intimate than that of either of the Governments with any other government. It is due to the constant efforts of both Governments to foster harmonious relations that the claims, which had arisen during the 30-year period covered by this arbitration, were so few.

One claim of the United States, which arose long before Panama attained its independence, namely, that resulting from the Colón fire of March 31, 1885, which involves questions of both international responsibility and succession to such responsibility as between the Governments of Colombia and Panama, was, by the terms of the arbitral convention, reserved for consideration at a time when Colombia might join with Panama and the United States in the necessary tripartite arbitral proceedings. Claims resulting from the acquisition of lands for the construction of the Panama Canal and other claims incidental to that monumental undertaking were disposed of, in general, by the Joint Land Commission created by the Panama Canal Convention of 1903 and were specifically excepted from the jurisdiction of the General Claims Commission. As a special exception to that arrangement, however, two such claims were, by the terms of the General Claims Convention, brought before this Tribunal.'

The two Governments concluded the General Claims Convention of 1926 for the obvious purpose of adjudicat

'See claims on behalf of Caselli and Monteverde, post, p. 581.

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ing all outstanding pecuniary claims of each Government against the other, with the exceptions specifically mentioned in that convention. Although the convention was concluded on July 28, 1926, it was not ratified by the President of the United States until September 11, 1931, or by the Panamanian Government until September 25, 1931. Perhaps more energetic action by the executive branches of the two Governments would have brought about earlier acceptances of the convention by the respective legislative branches. Ratifications were finally exchanged on October 3, 1931. Several claims developed after the conclusion of the convention and, as the convention was silent with respect to the jurisdiction of the Commission from the standpoint of the date of the claims, a considerable amount of difficulty and inconvenience was encountered in this connection. Under the terms of article II of the convention, the Commission (consisting of one commissioner to be designated by each Government, and a neutral presiding commissioner to be designated by mutual agreement of the contracting parties, or, in case such agreement were impossible, by the President of the Permanent Administrative Council of the Permanent Court of Arbitration at The Hague) was required to meet in Washington for organization "within six months after the exchange of ratifications" and, under the terms of article VI, the Commission was "bound to hear, examine and decide, within one year from the date of its first meeting all the claims filed". Therefore, the last date for the first meeting of the Commission was April 3, 1932, and the last date on which the Commission might properly terminate its labors was April 3, 1933.

When the convention was concluded in 1926 there were of record in the Department of State 77 claims of American citizens against the Government of Panama and, apparently, the Panamanian Government had about 50 claims of Panamanian citizens against the Government of

'See claim of the Mariposa Development Company et al., post, p 533, also Noyes claim, post, p. 155.

the United States. Before the beginning of the adjudications the number of American claims had increased to 133 and those of Panama had increased to 55.

It was obvious to the American Agency that the Commission could not possibly perform, in one year, the services required of it by the convention if, according to previous general practice, there were to be presented for adjudication, separately, each claim of record regardless of its individual merits, and especially if the two Governments were to wait for the development of the pleadings in the respective cases until after the Commission should come into existence and prescribe rules regulating the number, form, and periods for filing such pleadings.

The Agency, therefore, adopted three expedients with a view to facilitating the accomplishment of the otherwise impossible task of completing the arbitration within the time allowed by the convention. Those expedients were:

First. To make a careful preliminary study of the merits of the respective claims, and to eliminate those inadequately supported by evidence or not well founded in law, by closing the cases without submitting them to the Commission.

Second. To combine, in one set of pleadings, all cases based upon a related state of facts.

Third. To undertake to determine by agreement with the Panamanian Government, and in advance of the exchange of ratifications, the number and form of the various pleadings to be filed as well as the periods to be allowed for the preparation of each pleading, in order to avoid the loss to the Commission of a large part of the one year allowed for its work while awaiting the development of pleadings in particular cases which would occur if the adoption of rules to govern the pleadings were to be held in abeyance until the first meeting of the Commission. In other words, the Agency desired to utilize the 6 months' period between exchange of ratifications and the first meeting of the Commission in such a manner

that some cases might be ready for adjudication at the time of the first meeting of the Commission and thus avoid its meeting 6 months after the exchange of ratifications for the sole purpose of adopting rules to govern pleadings and then adjourn for a period of 6 months-one half of its entire period of existencewhile claims were being matured, under its rules, for its adjudication.

The first expedient constituted what is believed to be a sensible, economical, and, on the whole, entirely satisfactory procedure. Theretofore it had been, in general, the practice in such general arbitrations to consider that every person who had undertaken to prefer a claim against the foreign government in question had the right to have his " day in court", regardless of the inadequacy of the evidence filed in support of the claim or the untenable bases upon which the claim was supposed to rest. That system had the one merit, of course, of providing a record showing adjudications in all cases and, in that manner, of ending discussions. It is, however, an unjustifiably expensive and protracted procedure to pleod, and cause an international tribunal to pass upon and adjudicate, claims which, although perhaps involving voluminous records, are clearly not well founded. It is believed that, in these matters, form should be sacrificed in the interest of economy and that the governments should not be burdened with the expense incident to the maintenance of the staffs of two agencies and of the commission while mere gestures in the form of elaborate pleadings and adjudications are being recorded. Commissions also have the right to resent the wholesale reference to them for decision of claims not established in even a prima-facie manner. In the case of the American-Mexican Claims Arbitration of 1868-1871, the American Commissioner said on one occasion:

"This case serves to show how carelessly the dusty records of the State Department have been emptied on this Commission, and how its labors have been unnecessarily and greatly increased." Laurent case, Docket No. 205.