[Memorandum found with foregoing, but not stipulating as to which articles it refers.]

Once the canal open to commerce and its tariffs established, an agreement will be entered into by which a certain return of the canal transit duties paid by the carrying vessel will be made to the owner of goods landed at Colombian ports. Said return will be made on a fair calculation and deduction of that part of duties which does not affect the actual transit expenses.

Articles 15 and 17 of the Hay-Herran treaty to be maintained extending the exemption of duties on war vessels to vessels carrying the Colombian flag.

LEGACIÓN DE COLOMBIA,

Washington, D. C., Privado, March 7, 1907. DEAR MR. BUCHANAN: I perceive that on page 17 of my Panama memorandum, Paragraph IX, the idea expressed in it might be construed in a contrary way to the idea I intended to convey.

I do modify said clause, which should read as follows after the word "hereafter":

This payment to be in settlement of all claims mentioned in this memorandum, it being understood that Colombia does not assume any responsibility in the settlement of any claims not presented against her up to the 3d of November, 1903, on account of damages by wars or state of war carried on in the territory of Panama from the year 1899 to the 3d of November, 1903.

I remain, dear Mr. Buchanan,

Yours, very sincerely,

ENRIQUE CORTES.

Secretary Root to Minister of Colombia.

APRIL 24, 1907.

MY DEAR MR. CORTES: I am sending you a copy of a letter and inclosure which I propose to send immediately to Mr. Obaldia, unless you see some objection.

Faithfully yours,

Inclosures as above.

[Inclosure.]

ELIHU ROOT.

Secretary Root to the Minister of Panama.

No. 53.] APRIL 24, 1907. SIR: As the Government of Panama is already aware, the Government of Colombia in June last suggested to the United States that the United States should use its good offices to bring about an arrangement between Colombia and Panama whereby the independence of Panama, which the United States had guaranteed, should be recognized by Colombia, and whereby such adjustments should be effected between Colombia and Panama as would naturally accompany a peaceable partition under which the economic and political relations of the people about to be separated and their respective

shares of the public obligations of the country about to be divided, are determined by agreement. The views of Colombia as to what such an agreement should provide included stipulations for equal political and civil rights; for reciprocal tariff concessions; for an obligation to respect the established boundary between the two countries similar to that adopted by Colombia and Ecuador at the time of their separation in 1832; and for a contribution by Panama toward the payment of the Colombian debt, taking into consideration certain claims of Colombia to continued property interests on the Isthmus, and taking into consideration, also, internal as well as external debts, and suggesting a sum very much in excess of that which Panama had advised the creditors of her willingness to pay immediately after the revolution in November, 1903. Colombia also proposed, as part of the same transaction, that there should be a new treaty of friendship and commerce between Colombia and the United States, which should include the grant to Colombia of certain privileges in connection with the use of the canal across the Isthmus similar to those stipulated for in the seventeenth article of the old unratified Hay-Herran treaty of January, 1903. The United States readily agreed to this proposal of Colombia, so far as the United States and Colombia were concerned. We did not, however, wish to assume the duty of presenting any proposals of Colombia to Panama without first being satisfied ourselves that they were reasonable and that it would be for the best interest of Panama to accept them. The whole subject of the relations which ought to be established between Colombia and Panama has accordingly been made the subject of extended informal discussion, including a great number of interviews, between Mr. Buchanan, Mr. Cortes, the minister of Colombia, and your good self, and between me and all the other gentlemen named; as well as between Mr. Barrett, the former minister of the United States to Colombia, and Mr. Vasquez Cobo, the Colombian Minister for Foreign Affairs, and between Mr. Vasquez Cobo and myself. During these discussions the Government of the United States became satisfied that the sum of $6,000,000, which Colombia wished us to ask Panama to pay was, for various reasons, too large, being to some extent based upon property claims which we deemed inadmissible, and to some extent upon considerations relating to the internal debt, which did not include certain offsets on the part of Panama; and that in view of the importance of the cattle-raising industry in Panama the proposal of Colombia that all cattle should be placed upon the free list would not lead to an equitable result. Our informal representations upon these points have led to a modification of the Colombian position, so that Colombia is now willing to assent to an arrangement under which the sum of $3,000,000, or one-half of the sum originally proposed, shall be taken as the full amount to be paid by Panama; and the proposed reciprocal exemptions of cattle from import duty shall be limited to lean cattle and shall not apply to cattle weighing above 400 kilos. The external debt of Colombia is stated at 3,051.000 pounds sterling, to which is to be added interest from July 1, 1905, to January 1, 1906, at 2 per cent per annum, and interest since the last-mentioned date at 3 per cent per annum. The internal debt is stated at $17,498,000. It appears to this Government that the proposals of Colombia as thus modified, are reasonable, and that it is clearly for the interest of Panama to

accept them as a part of an arrangement which shall include the recognition by Colombia of the independence of Panama and the establishment of the relations of the two countries, which must always be so closely associated, upon an enduring basis of peace and mutual benefit. This Government therefore feels it to be due to the warm and peculiar friendship which exists between Panama and the United States, as well as to the ancient friendship which the United States has entertained for the Republic of Colombia and wishes to perpetuate, that the United States shall use its good offices in presenting these proposals to the Government of Panama, and expressing, as it now does, an earnest hope that they may receive favorable consideration.

I accordingly transmit herewith a literal copy of the last paper received from the Minister of Colombia stating these proposals in their present form, omitting, however, certain matters of argument which were relevant only to the previous discussion that it would not now be useful to reproduce.

Accept, Mr. Minister, the renewed assurance of my highest consideration.

ELIHU ROOT.

Inclosure as above.

I.

[Inclosure.]

The Government of Colombia demands from Panama the payment of three millions of dollars gold, cash, under the guaranty of the United States and under the stipulations and formalities which should be agreed upon hereafter. This payment to be in settlement of all claims mentioned in this memorandum, it being understood that Colombia does not assume any responsibility in the settlement of any claims not presented against her up to the 3d of November, 1903. Panama to declare her recognition of the property of Colombia in 50,000 shares of the New Canal Co., issued by said company in favor of the Government of Colombia, the certificates of which are lying now in the hands of the New Canal Co.

II.

A stipulation should be agreed upon to the effect that all citizens of either of the two countries, residing in the other, should enjoy equal political and civil rights as the natives, being, however, exempted from military service in the alien country. A prudential term should be fixed for the citizens of one country residing in the other at the time of the secession of Panama to declare which of the two nationalities they choose to select.

III.

According to the concordat concluded between Colombia and the Holy See, the former is to disburse $100,000 annually to be devoted to the maintenance of Catholic seminaries, hospitals, and other beneficent works, and any buildings or other real estate formerly belonging to the church and seized by the nation, which had not

been appropriated for any political purpose, should revert to the religious community to which it formerly belonged. I suggest that Panama should maintain her proportional obligation under the above, and that consequently she would continue to devote to that purpose the quota that was apportioned to the diocese of Panama by the convention of October 2, 1888, to wit, $13,000 annually, and that the stipulation above mentioned, relating to real estate, should be complied with.

The justice and statesmanlike policy of this action do not require, in my opinion, further comment, and I have no doubt that it will be readily accepted by Panama.

IV.

As there may possibly appear in either of the two countries movements tending to the annexation to the other of a part of their respective territories, I propose as a safeguard to both, and as a means to avoid future causes of differences between them, that a stipulation similar to the one concluded between Colombia and Ecuador at the time of their separation in 1832 should be agreed upon.

Said stipulation runs as follows:

The States of New Granada and Ecuador, animated as they are by the best wishes to maintain forever the most complete harmony of neighborhood and good understanding, solemnly engage themselves to respect their respective boundaries as agreed. In consequence thereof, New Granada shall never admit to form part of her nationality any group or groups of population which, separating themselves forcibly from Ecuador, seek annexation to New Granada; nor shall Ecuador admit any group or groups of population that, separating themselves forcibly from New Granada, seek annexation to the State of Ecuador.

V.

As a means of stimulating and strengthening the commerce between the two countries it is agreed that all natural products belonging to the three natural kingdoms, vegetable, mineral, and animal, the origin of which proceeds from either of the two contracting parties, shall not be submitted, on their importation into the other, to any duty whatever such as customhouse duties, commercial tax, or any other collected at the time of and on account of their importation into the country. It is understood that such freedom of importation is to be applied to all natural products as above, provided they have not been submitted to any manufacturing process subsequent to their usual preparation for the market. Mention is especially made of the following: Coffee, maize, rice, potatoes, wheat, barley and all cereals, all kinds of fibers, tobacco in leaves, woods for building, furniture, or dying, salt, platinum, gold, copper, iron, coals, live animals or in carcasses, etc.

The above exemption from duty on importation does not exonerate the articles mentioned from the payment of duties, national, departmental, or municipal, imposed on similar articles of home production in the respective country.

The above exemption from import duties does not apply to fat cattle of the bovine genus (ganado vacuno). By fat cattle is meant a live animal weighing above 400 kilos, the importation of which will be subject to the general regulations as to duty in the respective country.

VI.

It should be stipulated that goods in transit through the territory of Panama other than the Canal Zone or Panama Railway, shall not be subject to payment of any transit duty.

VII.

There shall be inserted in the treaty, embodying the stipulations referred to in the present memorandum, a special clause of amity and friendship between the two countries and a recognition by the Republic of Colombia of the independence of the Republic of Panama, mentioning the boundaries between the two countries, as per the Colombian law of June 9, 1855, which fixed the line of boundaries between the State of Cauca and the State of Panama; which is also included in the official edition of the geography of T. C. Mosquera, published in London in 1866, as follows:

From the Atlantic, a line from Cape Tiburon 8° 41′ north latitude, 3° 8' west longitude from Bogota to the head of the Rio de la Miel, and following the Cordillera by the hill of Gandi to the Sierra de Chugargun and Sierra de Mali, going down by the hill of Nique to the heights of Aspave and thence to the Pacific, between Cocalito and La Ardita, 7° 12′ north latitude, 3° 37' west longitude from Bogota.

VIII.

A stipulation should be inserted in this treaty to the effect that as soon as it is ratified by the two nations in the usual form and ratifications exchanged, negotiations should be opened for a treaty or treaties on navigation, commerce, consular conventions, postal and telegraphic conventions, parcel post, artistic, literary, and scientific property, extradition of criminals, etc. Meanwhile it is agreed that the citizens of each country shall enjoy in the other full legal protection in their persons and property, that both countries will solicit from the United States the good offices of their diplomatic and consular representatives in favor of their respective citizens of one country residing in the other, that the forwarding and transportation of mail matter and post parcels, in transit or originated in either country and destined to the other, shall be speedily attended to and cared for as if there existed a postal convention between the two countries.

Minister of Colombia to Secretary Root.

[Private.]

LEGATION OF COLOMBIA, Washington, D. C., April 25, 1907.

MY DEAR SIR: I have the honor to acknowledge receipt of your communication dated yesterday, which reached my hands at 6 o'clock p. m., accompanying the draft of a letter you purpose sending immediately to Mr. Obaldia, unless I see some objection.

In answer I have great pleasure to express my satisfaction at the course you consider acceptable for the United States to follow in the matter of the relations between my country, the United States, and Panama. Your proposed letter to Mr. Obaldia is a fair and unbiased exposition of the question at issue, doing honor to the Government of the United States. I have nothing to reflect upon it, as a few personal remarks of slight importance might be considered later