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rated in the Panaman legislation. American Alien Property Custodian has power under Enemy Trading Act to sell real property in United States belonging to persons defined as enemies by section 2 of act, or proclamations issued thereunder, but the disposition of the proceeds of such sales is left for the decision of Congress. As yet Congress has not determined the disposition of such proceeds.


File No. 763.72112/10814

The Minister in Panama (Price) to the Secretary of State

No. 2158

PANAMA, November 5, 1918.

[Received November 20.] Sir: In accordance with the Department's cablegram of October 18, 9 p. m., that it would seem advisable that in the trading with the enemy act under consideration by Panama provisions be included authorizing land holdings to be sold and title conveyed, I have submitted to the Panaman Foreign Office an amended bill, containing these provisions. Maj. Ira K. Wells, Judge Advocate on the staff of Brig. Gen. R. M. Blatchford, commanding the Panama Canal Department, had charge of drawing the amendments after my presentation of the matter to him. I have the honor to enclose (enclosure No. 11) a copy of my note to Secretary Lefevre submitting them. I enclose also (enclosure No. 2') a copy of the proposed bill, including said additions. They are incorporated as sections 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14 in the draft of the bill which constitutes a part of enclosure No. 1 with my despatch No. 1923 of April 24, 1918, which was corrected by the incorporation of the subsection reported in my despatch No. 2109 of September 30, 1918.1 With these additions inserted under the section numbers mentioned, section No. 5 in the draft accompanying said despatch No. 1923 becomes section 15 in the present draft.

I now refer to another despatch in this mail' relating to the steps being taken to sell for taxes and lawyers' fees the lands on Puerto Piñas Bay, which have been owned by Germans under the name of the Balboa & Pacific Estates Co., Ltd., and managed by Augusto Dzuik, now an inmate of an internment camp in the United States.

With the very satisfactory progress of the war in late weeks the question has presented itself as to whether further steps along the line of this bill were worth while, but in view of the protracted length of time required to put through any measure like this in Panama, it seemed just as well to submit it, and, if passed, to decide


* Not printed.

later whether we thought best to put into motion the machinery making efficient the work of the alien property custodian.

It will be noted that his selection is to be by President of Panama, “ with the concurrence of the Chairman of the War Trade Board of the United States." I have [etc.]


File No. 763.72112/10987

The Minister in Panama (Price) to the Secretary of State

No. 2179

PANAMA, November 20, 1918.

[Received December 5.] SIR: Referring to my despatch No. 2158 of November 5, with which I sent a copy of a new draft of the enemy trading bill proposed to Panama, including provisions for an alien property custodian, and authority to sell real estate and convey titles, I have the honor to enclose (enclosure No. 1) a translation of a note from the Panaman Foreign Office acknowledging the receipt of the proposed bill, but expressing the opinion that inasmuch as the war has virtually ended, the adoption of such a law is entirely unnecessary.

It would seem that the opinion of Secretary Lefevre is well taken, and I shall await further instructions from the Department before asking additional action at the hands of the Panaman authorities. I have [etc.]


The Panaman Minister of Foreign Affairs (Lefevre) to the

American Minister (Price)

S.P. No. 2246

PANAMA, November 20, 1918. MR. MINISTER: I have had the honor to receive the courteous communication of Your Excellency, F.O. 696, of the 5th instant, together with which you transmit a rough copy of a project of law relative to“ trading with the enemy,” which contains a few amendments and additions to the one which that Legation sent me previously, expressing in due time the opinion of the military authorities of the Panama Canal, that the adoption of such a law by the National Assembly of Panama would be very beneficial to the interests of Panama and the United States in the present war.

I have read said project with great interest, but, since the war has virtually ended and the signing of peace is near, I believe that the adoption of such a law by our Assembly under the present circumstances would be absolutely unnecessary. I improve this opportunity [etc.]


Peru: The Casa Grande Sugar Plant

File No. 763.72112C26/51
The Peruvian Legation to the Department of State


WASHINGTON, January 25, 1918. The Legation has been instructed to place before the Department of State, as it hereby has the honor to do, the following facts, with the purpose of seeking a practical understanding whereby the Casa Grande Sugar Plant, established in the valley of Chicama, Peru, may not be forced to close its works, with great detriment to the region in which it operates.

The Casa Grande Sugar Plant, owned and worked by German capital, has been placed on the trading with the enemy list; and in consequence thereof finds it impossible to discount the drafts received in payment of sugar shipped to Chile. Owing to this situation, it will be obliged to close its works, thereby dismissing about 10,000 laborers and employees at present engaged in its service. The sudden and enforced inactivity of such a large number of men would cause unrest and disturbances, social and economic; the general production of sugar in Peru would be curtailed; and, incidentally, the Peruvian Treasury would be deprived of a not negligible source of revenue, through nonpayment of export duties for sugar shipped by the Casa Grande Plant.

In view of these facts, it would seem advisable that an agreement be reached by the Government of Peru and the Government of the United States, whereby the purposes of the Trading with the Enemy Act be not defeated, and unnecessary suffering be not imposed upon the Government and people of Peru.

It should not be impossible to find a means enabling the Casa Grande Plant to continue its operations, without aiding the enemy.

Were the Government of Peru to exact that the net earnings of the Casa Grande Plant be deposited in Peru until after the war, with all necessary guaranties, the object desired apparently would be attained.

The Government of Peru proposes this plan, as one which seems feasible and fair; but it is willing to accept any suggestion from the Government of the United States which might answer the purposes of the Trading with the Enemy. Act, and at the same time permit the Casa Grande Plant to discount the drafts received in payment of its sugar, and thereby to continue operating its works.

File No. 763.72112C26/14

The Peruvian Minister (De Freyre) to the Secretary of State


WASHINGTON, February 27, 1918.

[Received February 28.] Sir: After the exchange of views effected between the Legation and the Department of State, with the purpose of reaching an agreement whereby the Casa Grande Sugar Plant, a firm incorporated at Bremen, Germany, and established in Peru, should be permitted to discount the drafts it receives in payment of sugar shipped to Chile, and thereby to continue its operations, I have been instructed to state, as I hereby have the honor to do, that my Government is disposed, with the consent of the Casa Grande Sugar Plant, to appoint an administrator with full powers to conduct the business of the Plant.

The control exerted by this administrator will include the authority to retain or dismiss the German employees at the Plant, according to the attitude they may assume with regard to American interests.

The administrator will also have full powers to sell the shares, which the firm should be willing to dispose of, and the proceeds of this sale will be deposited in the Peruvian Treasury until after the termination of the war.

The net earnings of the Plant will also be deposited in the same form and for the same period.

In consideration of these measures, which would seem fully to answer the requirements of the United States Government that no possible aid should be given her enemies, a license shall be issued by the competent authorities in the United States, whereby the Casa Grande Sugar Plant shall be permitted to discount the drafts it receives in payment of sugar shipped to Chile. Accept [etc.]


File No. 763.72112C26/21
Memorandum of the Chief of the Division of Latin American Affairs


March 19, 1918. The Minister from Peru called by appointment to see Mr. Stabler this afternoon and informed him that Mr. Lay had spoken with

1 him in the morning in regard to the regulations under consideration

* Julius G. Lay, Acting Foreign Trade Adviser for the Department of State.



by the War Trade Board for the granting of licenses to banks to trade with the “ Casa Grande ” Sugar Co. in Peru, and that Mr. Lay had told him that, while the matter was almost settled, there were some points which were under discussion and that he felt that, should the Government of Peru give a favorable reply in regard to the turning over to the United States of the ex-German ships in Peruvian waters, the matter of the “Casa Grande ” would be facilitated thereby.

The Peruvian Minister informed Mr. Stabler that he thought possibly the Peruvian Government was holding up definite action in the matter of the ships until a favorable reply had been received from the United States in regard to the “ Casa Grande ” and that he was in a quandary as to what course to pursue as he felt that public opinion in Peru was difficult to deal with, and earnestly hoped that both questions would be settled in a manner satisfactory to the two countries.

Mr. Stabler informed Mr. Freyre that he was not fully cognizant of all of the details of the War Trade Board's attitude in regard to the “ Casa Grande," but tried to present to that Board the political side of the case in an endeavor to have the wishes of Peru met as much as possible. He further stated that the Department would be placed in a much more advantageous position to deal with the War Trade Board should a favorable reply be received from the Government of Peru in the near future regarding the ships.

The Peruvian Minister then informed Mr. Stabler that he would cable his Government to the effect that should the proposal of the United States Shipping Board, for the use of the ships, be accepted in principle, the War Trade Board would give a favorable answer to the “Casa Grande " question.

Mr. Stabler informed the Minister that he thought probably this would be of advantage and that, should a favorable reply be received in the near future, the State Department's hand would be strengthened, and he would do all in his power to see that the Government of Peru received treatment which he wished.

File No. 763.72112C26/39
The Peruvian Legation to the Department of State

WASHINGTON, April 27, 1918.

[Received April 29.] The Legation has the honor to request that the long-deferred settlement of the difficulties arising from the restrictions placed by

*For correspondence regarding these ships see Supplement 1, vol. I, “ Latin America in Relation to the War,” pp. 661-740.

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