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nations, and if there has been such violation, then the question comes up as to how much damages she is entitled to receive.
Mr. SHARP. For which a money compensation ought to settle?
Mr. RAINEY. It is so late. The Republic of Panama has been recognized by many of the great nations of the world. We can not destroy that recognition if we want to do so. The question can only be a question of indemnity.
Mr. SHARP. The Government of Panama is recognized everywhere now? No nation is withholding recognition on account of the question of its establishment?
Mr. RAINEY. No, sir; not at all. They are all recognizing the independence of Panama. There is no question about it now. It is established forever. The only nation that could ever interfere with it would be this Nation itself, if we ever should conclude to annex Panama. I hope we never will.
Mr. SHARP. Perhaps I ought to keep this in mind. What, if any, consideration or reparation has ever been made by the United States Government to the United States of Colombia for recognizing or aiding in the establishment of this independence of Panama?
Mr. RAINEY. None whatever except that a little over a year ago three treaties were negotiated here in this country. Under our contract with Panama, we were to pay her $10,000,000 for her relinquishment of her sovereignty on the Canal Zone, and then we agreed to pay her
Mr. SHARP. Pay who?
Mr. RAINEY. Panama. We agreed to pay her, commencing in 1913, $250,000 a year, and there is still in controversy the question as to the ownership of certain of the Panama Canal shares of the French company in Paris amounting to a considerable sum of money. The treaties we negotiated here between this country and Panama, between this country and Colombia, and between Colombia and Panama provide that commencing with 1913, if I remember now, we should pay not to Panama but to Colombia for a term of years this $250,000 rental; and these treaties also provided for the payment to Colombia of $10,000,000 by the United States upon relinquishment by that country of her rights of sovereignty over certain little islands. Mr. KENDALL. What was that proposition? I understand the terms of it. Was it a bill introduced?
Mr. RAINEY. No, sir; three treaties were negotiated by the United States by which our State Department virtually conceded the claims of Colombia and endeavored to satisfy them by making this arrangement between the three nations; the $250,000 per year that we commence to pay Panama in 1913 under these proposed treaties was to be paid not to Panama but to Colombia.
Mr. CLINE. Did Colombia participate in that agreement?
Mr. RAINEY. Her representative here did and the representative of the Republic of Panama participated and we participated in these treaties here; they were immediately afterwards ratified by Panama. I think Colombia refused to ratify them.
Mr. KENDALL. The Colombian Government disavowed it?
Mr. RAINEY. They refused to ratify the treaties. Panama is the only one of the three Governments that ratified the treaties. The
refusal of Colombia to ratify led to a period of nonaction in our Senate.
Mr. FOSTER. Will you permit just a suggestion? First, while the original arrangement was that we were to begin in 1913 to pay $250,000, under the new arrangement we began earlier than that. We have already appropriated $500,000 and last year, as long as the money had not been taken, we didn't appropriate the money.
Second, that the $250,000, was the arrangement between Panama and Colombia for the amount that Panama really owed Colombia as her part of the national debt, and so on.
Mr. RAINEY. You are right about that-and the $250,000 is the rental we agreed to pay Panama per year for the use by us of the Canal Zone.
Mr. FOSTER. Between us and Panama?
Mr. RAINEY. Yes.
Mr. FOSTER. And we agreed to pay it over to Colombia instead of pay it to Panama?
Mr. RAINEY. Yes.
Mr. FOSTER. And Panama agreed to that because of her share of the outstanding national debt?
Mr. RAINEY. Yes; that was the consideration.
Mr. KENDALL. That was in discharge of obligations existing between Panama and Colombia?
Mr. RAINEY. Yes, sir.
Mr. CLINE. In satisfaction of any damages?
Mr. RAINEY. The willingness of our State Department to enter into those treaties shows that this department recognized Colombia's claims, although we do not admit it in these treaties. The origin of the $250,000 proposition is this: The Panama Railway & Steamship Co., a New Jersey corporation, agreed to pay Colombia $250,000 rental a year for a right of way across the Isthmus of Panama, and they continued that payment until the independence of Panama. At the time when the independence occurred and for some 13 years prior to that time the Panama Canal Co., first the old and then the new company, owned a controlling interest in the railroad, and these French companies paid the rental.
Now we own the railroad, and this amount heretofore paid as rental for the railroad right of way we are paying now to Panama as rental for the Canal Zone, and by these three treaties we were to pay it, not to Panama, but to Colombia.
Mr. SHARP. The ostensible purpose, and perhaps the sole purpose, in this Government recognizing the independence of Panama against the protests of the United States of Colombia was to facilitate the building and construction of this canal, was it not; so as to secure rights to cross the Isthmus and go ahead and build the canal? Mr. RAINEY. I think that was it; yes, sir.
Mr. KENDALL. The acknowledgment of the independence occurred on the 18th of November by this Govenrment?
Mr. RAINEY. Yes, sir.
Mr. KENDALL. Recognition, I mean?
Mr. RAINEY. No; the recognition of Panama occurred immediately after the revolution.
Mr. KENDALL. That was the 4th, then?
Mr. RAINEY. Yes, sir; or perhaps it was the 6th when our State Department cabled to our representative to recognize the de facto government. The 6th day of November we commenced to recognize the representatives of the new Panama Republic.
Mr. KENDALL. Prior to that time for a number of years there had been negotiations between the United States and Colombia looking to Colombia relinquishing a strip across there for canal purposes? Mr. RAINEY. That, among other things. Yes, sir.
Mr. KENDALL. Do you remember the amount of money we had tendered her for the surrender of her sovereignty there?
Mr. RAINEY. I think we tendered $10,000,000; something like that.
Mr. KENDALL. $20,000,000 at one time?
Mr. RAINEY. Perhaps we did.
Mr. KENDALL. Colombia refused?
Mr. RAINEY. No; Colombia at no time demanded larger payments from the United States. That is an impression that has been spread abroad in this country, but you will find when this evidence is all in that at no time did Colombia expect the United States to pay more than $40,000,000 for the Canal. What she was claiming was a larger interest herself in the $40,000,000, or any amount that we were going to pay the French companies. In 1904 the charter she had given the French company, and all legal extensions of it, expired. This charter provided that the General Assembly of Colombia must approve any act of the President of Colombia in extending the charter. This charter expired in 1904, and the President of Colombia extended it himself, without any authority from the General Assembly, for 10 years. The position of Colombia was that in 1904 all this property would revert to Colombia. She has always denied the legality of the extension made after 1904 by the President of Colombia; and her position was that, in view of the fact that by its very terms the contract would soon expire, and when it did expire all the work the French company had done on the Isthmus would revert to her, that she ought to get a share of the $40,000,000, the consideration we proposed to pay the French companies. There was at no time any demand on her part that the United States increase its expenditures. As far back as 1869 a treaty was proposed between this country and Colombia by which Colombia agreed to everything we wanted her to agree to in the matter of a canal across the Isthmus. That treaty we never ratified.
Mr. CLINE. Is it your contention that the United States exercised undue haste in the recognition of the Republic of Panama before its status was established and that President Roosevelt did so for the purpose of promoting and handling the Panama Canal?
Mr. RAINEY. It is my contention that the representatives of this Government made possible the revolution on the Isthmus of Panama. That had it not been for the interference of this Government a successful revolution could not possibly have occurred, and I contend that this Government violated the treaty of 1846. I will be able to produce evidence to show that the declaration of independence which was promulgated in Panama on the 3d day of November, 1903, was prepared right here in New York City and carried down there-prepared in the office of William Nelson Cromwell. I will show you that our State Department was cognizant of the fact that a revolution
was to occur on the 3d day of November, 1903, and that in this country, months before that revolution occurred, there was an agreement as to the date it was to occur, and at this time we most solemnly pledged by the treaty of 1846 to maintain the sovereignty of Colombia on the Isthmus of Panama. Our State Department was a party to the agreement that a revolution should occur on that date-the 3d day of November, 1903—and that day was selected for the reason the papers of the United States would be filled with election news on that day and would not give much attention to news from the Isthmus of Panama.
My contention is that the part we played for months prior to the revolution in promoting that revolution in this country is a stain upon the history of this Government--such a stain as has never been placed upon it before. At this time, when we are preparing for the opening of this great canal, which everybody is in favor of, across the Isthmus of Panama-we are even building the lighthouses to-day to guide ships through the canal from sea to sea-at a time when we are contributing so much to all the nations, we can contribute a little something to the Republic of Colombia if we violated our treaty with her.
What better thing can we do, at a time we expect this canal to revolutionize the commerce of the world, than to make reparation to Colombia for the wrong we have done her, if we have done her any wrong. We expended $100,000,000 to free Cuba; we recently returned to China $12,000,000, which we did not think we were entitled to retain; therefore, in view of our recent career in matters of this kind, I contend-and I am asking the committee to take this position, if I succeed by evidence in sustaining the statements I have madeI contend that we should at this time give Colombia her day in court. In this way we may square ourselves with the nations of the world; in this way we may become a "gentleman among the nations"use a term coined, I think, by William Nelson Cromwell himselfin this way we may wipe out this stain upon the diplomatic history of our country.
A MEMBER. Don't you think our intrigue in abetting this revolution constitutes the blackest page in the history of our international diplomacy?
That is what I want to talk to this comMr. RAINEY. I think so. mittee about. We expect to produce evidence that will convince the committee, and in my statement of the case now I propose simply to tell the committee what evidence we can produce. I am not going to enter into any criticism or abuse of anybody, but I want to outline in this opening the evidence that we can present to this committee, and I want to assure the committee that we will be able to present to them the evidence I say we can present.
Mr. SHARP. Broadly stating it then, your views would be that our Government took the position that in its desire to build that canal the end justified the means?
Mr. RAINEY. They did a great wrong.
Mr. SHARP. The end justified the wrong?
Mr. RAINEY. I think that is the view our Government took of it. Mr. LEVY. Do you consider that amount of money paid$10,000,000-excessive? Why should we pay $10,000,000?
Mr. RAINEY. I do not want to discuss that, because it has nothing to do with the question I present.
Mr. LEVY. Some of it, or a portion of it, is invested in the United States?
Mr. RAINEY. $6,000,000 of it is supposed to be invested here, and it is believed to be invested in New York real estate; the only man who knows that is William Nelson Cromwell.
Mr. GOODWIN. Your position then is not exactly as was Portia's, who said that in order to do a great right, do a little wrong? But that the attitude of the administration at that time was that inasmuch as the election was on it was prompted to pull off this political stunt and in doing so committed an irreparable injury?
Mr. RAINEY. My position is this: That even if in doing something that may prove of great commercial advantage to this country we committed a wrong upon a little republic that can not resist us except in The Hague tribunal, we ought to go with them to The Hague. They can not resist us by resorting to a clash of armored vessels on the seas and great armies upon the land; can not challenge us as to that sort of arbitration; they can only ask us to settle this in The Hague tribunal, and we can not in honor deny this reasonable request. My position is that if I can produce evidence
Mr. LEVY. You claim this $40,000,000 paid was paid for a franchise that we had no use for?
Mr. RAINEY. I am not questioning the canal title at all. That has been settled so long that it is a closed incident.
Mr. LEVY. The only question is the excessiveness of the payments by the department?
Mr. RAINEY. I do not want to discuss the question as to whether it was excessive or not. I don't care whether it was or not. But in referring to the amount we paid to the French company, I referred to it only incidentally in my endeavor to show what Colombia's position. was, and the procrastination with which she is unjustly charged simply grew out of her desire to get more of the $40,000,000. Her position was this, and it is a legal position that any country ought to take, or that any individual would take: In 1904 the French property, for which we paid $40,000,000, absolutely reverted to Colombia, and, therefore, she was waiting until the expiration of that time when it would all belong to her, and when we would be compelled to buy it all from her. That is the position we would have taken in this matter or any other matter, and Colombia took exactly the proper position. She wasn't demanding a larger indemnity from the United States. All that she was insisting upon was that she was entitled to more of the compensation we were willing to pay.
Mr. LEVY. If that company was defaulting and had virtually nothing and we paid them $40,000,000?
Mr. RAINEY. The French company had defaulted for many years and had not completed one-third of this work, and so under the original contract it was forfeited long before they opened negotiations with us.
Mr. CLINE. If the contention of Colombia was correct the French company eliminated all of their interest in the matter.
Mr. RAINEY. Yes. If the contentions of Colombia were correct, all the rights of the French company would expire in 1904.
Mr. CLINE. So whatever indemnity was fair should have been paid to Colombia?