4. Whenever there is produced an excess of electrical energy from
 the Panama Canal's generating plants it shall be furnished at
 an agreed price to the cities of Panama and Colon.




5. The United States agreed to assume the entire cost of the Rio
 Hato Highway.




6. Right-of-way for the construction of an oil pipeline, connecting
 Panama with the port of Balboa, was granted by the United
 States.


Treaty of Mutual Understanding and Cooperation, signed at
 Panama Jan. 25, 1955.
[Cut of 21 demands sought hy the Republic of Panama, the
 United States agreed to 11 major concessions.]


1. The annuity was increased from $430,000 to $1,930,000 (the
 State Department assumed the obligation to include the additional $1,500,000 in its annual budget although there
 was no need so stipulated in the treaty).



2. Subject to certain conditions, Panama was granted the power
 to levy 'income taxes on personnel employed by Canal Zone
 agenciec, regardless of their place of residence.


8. Provision of electrical current from the Aihajuela Dam for use
 in the Republic: The Government of the United States agrees that electircal energy, whenever an excess beyond the needs of the United States is available in commercial quantities at the generating station of the Panama Canal at Madden Dam, will be furnished upon request of the Panamanian Government, to the cities of Panama and Colon at a price and at points to
 be agreed upon by the two Governments.
 9. The assumption by the United States of the entire cost of the
 Rio Hato Highway: The Government of the United States will after the necessary funds have been obtained by appropriations from the Congress, liquidate the credit of $2,500,000 made available to the Republic of Panama by the Export-import Bank for the construction of Panama's share of the CohrreraRio Hato Road.
10. The desire of the Panamanian Government for 3 gasoline or
 oil tanks at Balboa: The Government of the United States will make available to the Republic of Panama a right-of-way beginning in the port of Balboa and ending at the Canal Zone-city of Panama boundary at a point to be agreed by the 2 Governments for the construction of a petroleum pipeline. It will also agree that the facilities of the Panama Canal for discharging bulk petroleum products from ships berthed at Balboa and for the direction of such products into the pipeline above mentioned would be made available in regular
 turn to the Republic of Panama at reasonable cost.
Art. I sec. 122: Beginning with the 1st annuity payable after the
 exchange of ratifications of the present treaty, the payments under art. XIV of the Convention for the Construction of a Ship Canal * as amended by art. VII of the General Treaty of Friendship and Cooperation * shall be one million nine hundred thirty thousand and no/lOG Balboas (B/1,930,000) as defined by the agreement embodied in the exchange of notes of
 Mar 2, 1936 * *
Art. 11 sec. 123: * the United States of America agrees that
 the Republic of Panama may, subject to the provisions of paragraphs (2) and (3) of this Article, impose taxes upon the income (including income from Sources within the Canal Zone) of all persons who are employed in the service of the Canal, the railroad, or auxiliary works, whether resident within or outside
 the Canal Zone, except:
 (a) members if the Armed Forces of the United States of
 America,
 (b) citizens of the United States of America, including those
 who have dual nationality, and
 (c) other individuals who are not citizens of the Republic
 of Panama and who reside within the Canal Zone.


I.