Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-03-03
PANAMA GAMER BY GOLD
RULING ON u. S. DEALINGS
Canal Treaty Check for s25O,OOO Sent
Back-COurt's View Cited as
Lifting ''Obstacles.''

of Panama by reason of laws enacted
by the Congress of the United States
changing the gold content of the dol
lar to 1873 grains of the same fineness.
The Congress of the United States
might likewise, and with indisputable
right, as the Panamanian Minister
says. enact some other law reducing
the gold content of the dollar TO S
or to grain, and, if dollars of such
weight could legitimately be used in
discharge of the treaty annuity the
compensation agreed upon in 1908
would be virtually wiped out.
Money to Bondholders.
1t has been argued that Panama
should overlook the whole matter be-
cause the canal annuity has been for
years. and is still allocated to the
service of the Panamanian bonds in the
hands OF United States investors, and
that, therefore. as the money is not
going out of the United States the
government of Panama would not be
benefited by the payment in gold
To this the Panamanians answer
that the right of their country to re-
ceive the gold coin stipulated in the
treaty is not dependent upon the use
to which the money may be destined,
or upon considerations of whether
Panama will be benefited or not by
such payment in gold The existence
Of a right does not cease or vary, they
say, by reason of the fact that the
person vested with the right is or is
not benefited by its exercise.
It has also been said that If Pan
anna demands payment in gold of the
canal annuity the American holders
of Panamanian bonds can also de-
mand payment in gold and thus offset
any benefit which might accrue the
former. But here the fundamental
difference is again disregarded While
the payment to the government of
Panama is ruled by international law,
the relations of Panama with the
bondholders of her foreign debt resid-
ing in the United States are governed
by the internal laws of the United
States. Who will dispute the right of
the Panamanian government to dis
charge its obligations in the United
States in accordance with the laws of
the United States?
Debt Greatly Lightened.
Still another objection to the Pana-
manian demand seems to be that Pan
anna has already benefited by the re-
duction in the value (not the amount)
of her debt, produced automatically
by the devaluation of the dollar, and
that she should be satisfied with that.
Aside from the fact that Panama has
not been the only one, and that every
debtor in the United States, whether
citizen or an alien. whether a natu-
raj or a juridical person, has been
equally benefited, the Panamanians
retort that that has nothing to do
with the discharge of an international
obligation established by treaty.
Whether the debts of Panama in the
United States are larger than her
credits, or vice versa, and whether
Panama had no debt at all or no credit
at all in the United States, these facts
are immaterial, in the opinion of the
diplomatic representative of Panama,
with regard to the international obi
cation of the United States toward
his country. Such obligation exists
and is immutable. It cannot be
affected or varied. Except by agree
ment of the two parties, it remains
and will remain exactly the same
whether Panama happens to have con-
tracted loans in the United States or
in case she had contracted the same
loans in France and had now to buy
francs at the rate of 6.56 for the serv-
ice of the debt.
The lease for Panama" ends by
quoting a clause from the loan inden-
ture of 1928, which provides that the
Republic of Panama will not at any
time, while any of the bonds issued
hereunder are outstanding. enter into
agreement or understanding or do any
act or thing whereby the obligation of
the United States of America to make |
the treaty payments shall or may be
in any manner released, affected or |
impaired" And to acquiesce in the |
that payment may be made |
now, not in the gold coin of 1908, but |
in any other lawful currency" Of a
lesser value would, naturally, be to al
low that obligation to be affected or
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