APPENDIX IX THE PANAMAN PROTEST THE following is the text of the Panaman Government's official representation, against the Administrative Order. It was addressed by the Panaman Secretary for Foreign Affairs to the American Minister at Panama : MR. ARIAS TO MR. BARRETT. Memorandum. OFFICE OF THE SECRETARY OF GOVERNMENT Panama, July 27, 1904. The undersigned, secretary of government and foreign affairs of the Republic of Panama, has received instructions from the President of the aforesaid Republic to submit to his excellency the envoy extraordinary and minister plenipotentiary of the United States the following: Pursuant to orders given by the President of the United States of America for the creation of ports and establishment of customs regulations in the canal zone, the governor of said zone has forthwith declared as ports of entry the section denominated La Boca, wherein he has, in consequence, thought fit to assume, disregarding the Republic of Panama, the prerogatives of sovereign of the port, entering and clearing vessels, establishing and collecting port dues and, finally, adopting measures tending to the establishment in the canal zone of the customs system of the United States. In a similar fashion the postal tariff and postage stamps of the United States have been made obligatory within the limits of the canal zone, and it appears the belief was entertained that the United States could, at its option, establish in the canal zone a monetary system different from any adopted by the Republic of Panama. Such proceeding and intentions are, undoubtedly, the result of the interpretation given by the United States of America to the treaty concluded with Panama on the 18th of November, 1903, on points such as those of vital importance for the growing Republic and as said interpretation clashes with the opinion of the government of Panama in what concerns the treaty itself and points at issue, the undersigned, in the name of the President of the Republic, respectfully invites his excellency the envoy extraordinary and minister plenipotentiary of the United States to exchange views in connection with the measures recently adopted in the canal zone, so as to convey to the treaty, by mutual accord, such interpretation as is found more to conform to the spirit and letter of its stipulations. Although the Republic of Panama when negotiating with the United States the treaty of the 18th of November, 1903, could not offer any obstacle whatsoever to the wishes and convenience of the United States, it did observe, nevertheless, with pleasure, when approving without restrictions said treaty, that the United States had waived in favour of the Republic of Panama that which was neither needed by the United States nor by the canal enterprise, but which for the Republic constitutes the most effective guaranty of its existence-in other words, fiscal and economical sovereignty within and without the canal zone. This point is of great importance because it is really a fact that a nation can cede part of its territory and sovereign rights in connection therewith, without materially affecting its proper existence, in surrendering life itself, and this very life, without the corresponding nourishment, is thereby doomed to sure death. From this it follows that the treaty concluded with the United States amply provides, on the one hand, for all requirements of the canal enterprise, and, on the other hand, it fully provides for the perpetual existence of the Republic of Panama. The said Republic thus agreed to surrender a strip of land of the required size, and boundaries to be excavated for a canal and to be eventually used by the shipping communicating the Atlantic and Pacific oceans, and the zone thus surrendered was ceded to the government of the United States, in perpetuity for "the construction, maintenance, operation, sanitation, and protection of said canal." (Article II of the treaty.) Whatever was considered indispensable by the United States to secure perpetually the canal enterprise was readily granted by the Republic of Panama. By such concession the canal zone, properly speaking, was comprised in the grant, and such lands and waters without the zone as would be found necessary, the islands of Perico, Naos, Culebra, and Flamenco, and moreover, the rights, power, and authority (as per Article III of the treaty) which the United States "shall have and exercise as if it were sovereign of the territory wherein said land and waters are located," entirely precluding the Republic of Panama in the exercise of such sovereign rights, power, or authority. But the general, and so to speak, the universal phase of these concessions of sovereignty, has, to judge from the treaty, two conceptions, one conditional and the other exceptional, both indispensable to the existence of the Republic of Panama. These two points are those which the undersigned believes have been disregarded by the authorities of the canal zone, by means of the measures set forth at the commencement of this memorandum. According to the clause in question, referred to in Article II of the treaty, "the cities of Panama and Colon and adjacent ports which are included in the described zone shall not be considered as comprised in this concession." This provision has an object further than that of indicating the material possession of said cities and ports. The evident object of that provision tends to insure and safeguard the very existence of the Republic of Panama, reserving to it in perpetuity the aforesaid cities and ports as fiscal resources, wherefrom to derive the most effective means of subsistence. The canal zone, before being ceded to the United States and subsequent to its cession, forms part of the region wherefrom importation and exportation take place and is the central spot between the two seas. The very existence of the Republic is derived from there; hence it was necessary to reserve that spot, although in other respects ceded to the United States. Such is, in the opinion of the undersigned, the reason and the object why from the canal zone the cities of Panama and Colon are set apart and the ports adjacent thereto, virtually leaving the zone without jurisdictional ports. Hence the right of levying and collecting maritime taxes, etc. (without regard to the exceptions provided in the treaty referring to all shipping and otherwise everything connected with the canal enterprise,) has invariably been a prerogative of the Republic of Panama, and the Republic claims it by virtue of the spirit and letter of the treaty concluded on the 18th of November, 1903. Not only that, the Republic claims the acknowledgment to the full extent of its economical and fiscal sovereignty within the canal zone, not only because it considers it has a right according to the treaty, but that its very existence and future depend on it. The fact stands, therefore, that Panama, being the original owner of the canal zone, clearly reserved what it did not expressly surrender. The sovereign right of levying taxes within the zone does not appear by any of the stipulations of the treaty to have been expressly surrendered to the United States. On the contrary, the right is implicitly acknowledged by Clauses X and XIII, wherein are specified the effects that cannot be subject to taxes. It follows therefore, that other effects are liable to taxation. In other words, national taxes and contribution take effect in the canal zone in so far as not expressly excepted by said Articles X and XIII. This being the case, the fact of excluding from the canal zone, by order of the authorities there, the postal tariff and postage stamps of the Republic of Panama, is, to say the least, improper, inasmuch as such proceedings affect, in a marked manner, a source of revenue from which it expects brilliant results in the near future. Finally, and as logical understanding of the meaning of a treaty whereby the fiscal and economical sovereignty is assured to the Republic, it considers that the rights which it so clearly and expressly reserved to itself have not been taken into proper consideration. The foregoing are the ideas which have been considered as proper to submit to his excellency the envoy extraordinary and minister plenipotentiary of the United States of America as a true expression of the feeling of the national government in order to serve as the basis of interpretation of the treaty of the 18th of November, 1903, in a matter of such vital importance for the Republic of Panama. TOMAS ARIAS. APPENDIX X THE REVISED EXECUTIVE ORDER THE following is the text of the new administrative or executive order, made by the United States Secretary of War as a result of a long controversy with the Panaman Government, during his visit to Panama in 1904. PANAMA, December 3, 1904. By the direction of the President it is ordered, that, subject to the action of the Fifty-eighth Congress, as contemplated by the act of Congress approved April 28, 1904: Section 1. No importation of goods, wares, and merchandise shall be entered at Ancon or Cristobal, the terminal ports of the canal, except such goods, wares, and merchandise as are described in Article XIII of the treaty between the Republic of Panama and the United States, the ratifications of which were exchanged on the 26th day of February, 1904, and except goods, wares and merchandise in transit across the Isthmus for a destination without the limits of said Isthmus, and except coal, and crude mineral oil for fuel purposes to be sold at Ancon or Cristobal, to sea-going vessels, said coal and oil to be admitted to those ports free of duties for said purposes: Provided, however, that this order shall be inoperative, first, unless the Republic of Panama shall reduce the ad valorem duty on imported articles described in the class 2 of the act of the National Convention of Panama, passed July 5, 1904, and taking effect October 12, 1904, from 15 per centum to 10 per centum and shall not increase the rates of duty on the imported articles described in the other schedules of said act except on all forms of imported wines, liquors, alcohol, and opium, on which the Republic may fix higher rates; second, unless Article 38 of the Constitution of the Republic of Panama as modified by Article 146 thereof, shall remain in full force and unchanged, so far as the importation and sale of all kinds of merchandise are concerned; third, unless the consular fees and charges of the |