File No. 819.77/120.

The Secretary of State to the American Minister.

[Telegram.—Paraphrase.]

Concerning the Hyatt and Wilcox contract and your dispatch No. 128 of May 13—the Department would not object to the contract if Article VII were omitted, and paragraph 5 of Article XVI, and if amended so as to conform to the recommendations of the board. You will so inform the Minister for Foreign Affairs, adding that if the railroad is built the United States Government would like to have an understanding that it could use the railroad in case of emergency, the same as the other railroads near the Canal Zone.

Knox.