Ootober 5, 1939
My dear Ambassador;
In accordance with our conversation this
morning, I enclose a short note on points whioh
may arise concerning the Panama Conference proposal
for a zone round the United States and South
America.
Yours sincerely,
T • S. V. PHILLIPS
While the proposal in general Is welcomed,
the following points will need attention.
(1) Prom the point of view of international law,
it would obviously be necessary to make it clear that
British assent to the proposal was not any precedent
and did not imply a recognition of a right on the part
of a neutral to exclude belligerents from operating
anywhere on the high seas (i.e. outside the three
mile limit).
(2) It would naturally be necessary for bel-
ligerent forces to have free access to their own or al-
lied territory and territorial waters within the zone.
(3) It would be a fundamental part of the scheme
that it should be effective, i.e. not only that enemy
action against territory, forces or shipping should be
prevented, but also that the use of the area as a
sanctuary in which raiders or supply ships might take
refuge should be. prevented.   The question of the use
of the area as a sanctuary is olearly very important
because, unless such action were prevented, it would
olearly facilitate greatly the operations of enemy
raiders in areas outside the zone.
(4) The extent of the zone to be finally accepted
would presumably be linked up with the possibilities
of effective enforcement.
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(5) The oonversion of belligerent merchant ships
into warships in ports within the zone would presumably
be prevented,
(6) It would naturally be necessary that a bel-
ligerent should retain the right to continue a pursuit
of the forces of his enemy into that area, because other-
wise the existence of the zone might frequently enable
a raider to escape destruction and subsequently emerge
from the zone to re-commence raiding in some other area*
(7) We should of course hope to obtain any informa-
tion concerning the movements of enemy forces within
the area since otherwise the operation of the scheme
would greatly reduce the possibilities of obtaining such
information for ourselves.
(8) The question of enemy merchant ships is also
of some importance because the number now interned in
various American ports might presumably* under the
safety given by the scheme, resume trading on the Ameri-
can continent, so earning considerable quantities of
foreign currency.   Such trading would presumably in any
case not be allowed unless the Germans themselves had ac-
cepted the scheme and respected it.