Evening star., 1936-03-29
NEW TREATY ANSWERS
PANAMA GOLD DEMAND
Supreme Court Ruling Established
Clearly There Was No Domestic
illegal Obstacle"

out Of the United States, the govern.
ment of Panama would not be bene.
f1ted by the payment in gold.
To this the Panamaians retorted
that the right of their country to re-
ceive the gold coin stipulated in the
1903 treaty was not dependent upon
the use to which the money might be
destined, or upon considerations Of
whether Panama would be benefited
or not by such payment in gold. The
existence of right did not cease or
vary, they added, by reason of the
fact that the person vested with the
right was or was not benefited by its
exercise.
Cite Fundamental Difference.
1t had also been said that if Panama
demanded payment in gold Of the
Canal annuity, the citizens of the
United States, holders Of Panamaian
bonds, could also demand payment in
gold, and thus Offset any benefit which
might accrue to the former. Here,
again, the Panamaians called atten-
tion to a fundamental difference.
of Panama was ruled by international
law, the relations of Panama with the
bondholders of her foreign debt resid-
ing in the United States were governed
by the internal laws of the United
States. Who could dispute the right of
the Panamaian government to dis
charge its obligations in the United
States in accordance with the laws
of the United States?
Still another objection to the Pam
amanian demand seemed to be that
Panama had already benefited by the
reduction 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 had
not been the only one, and that every
debtor in the United States, whether
a citizen or an alien, whether natural
or juridical person, had been equally
benefited, the Panamaian answered
that that had nothing to do with
the discharge of an international obli-
CATION established by treaty.
Implication Is Obvious.
In a later memorandum, prepared
after the gold decision" of the Su.
preme Court of the United States,
the Minister of Panama in Washing
ton argued that even the domestic
legal obstacles" which were said to
prevent the gold payment to Panama
had been removed Such legal OBJ
stacleS" we're, apparently, those en-
countered in the joint congressional
resolution of June, 1888. declaring
that provisions requiring payment in
gold or a particular kind of coin or
currency were against public policy"
and providing that every obligation,
heretofore or hereafter incurred"
should be discharged upon payment,
dollar for dollar. in any coin or cur
rency which. at the time of payment,
is legal tender for public or private
debts" But the Supreme Court ruled
that the Government of the United
States must pay its gold obligations
as originally contracted. OF course, in
the case of individual bondholders,
the court added that they could not
sue the Government in order to en-
force payment, but in reference to an
international agreement, the implica-
tions Of the Supreme Courts decision
were obvious. 1t at least established
clearly that there was no domestic
legal obstacle" which prevented the
United States Government from max
ing the canal payment in the terms
agreed in the 1903 treaty.
Once that was established, as we
pointed out at the time, there re-
manned little doubt-if. indeed, there
could have been any before-that the
United States would presently ac-
quiesce i'll the legitimate demand Of
the Repunblic Of Panama.
ICCpyrieht, 1876