Panama Orders Banks to Cash Checks

The cash-strapped government of Panama is trying to get around U.S. prohibitions on money transfers to its treasury by tapping funds held by private Panamanian banks here and in the United States.

On Thursday, the government ordered private Panamanian bankers to cash checks made out to the government for payments of taxes and services and give the money to the government.

Bankers, whose institutions have been closed since early March, are resisting the request.

“This is expropriation,” said a Panamanian banker. “We are not allowed to cash checks of our regular customers because it would dry up our funds, yet the government wants us to cash checks for it.”

The government has yet to announce how it will react to the bankers’ stand. Panamanian banks hold millions of dollars in their vaults here and in bank accounts in the United States.

The government’s severe cash shortage has come about because foes of Panamanian military strongman Manuel A. Noriega, with Reagan Administration backing, have successfully tied up Panamanian government funds in U.S. courts.

The cash crunch made it impossible for Gen. Noriega’s government to meet public payrolls due last week. Another $30 million in wages is scheduled to be paid next week. Delayed salary payments have sparked walkouts by workers in electrical, telephone, water, port and teachers’ unions, interfering with important government services.

The Reagan Administration has expressed hope that the economic crisis will bring down Noriega, who is accused in the United States of drug trafficking.

Panamanian officials say that the government here has tried to get funds from a variety of sources, including European banks.

Noriega’s government has also been attempting to overcome an internal political stalemate. Nominal civilian President Manuel Solis Palma has invited opponents of Noriega to discuss a solution to the crisis in return for a vague pledge that Noriega will step down.

Opposition politician Ricardo Arias Calderon on Thursday rejected the proposal. “We have one objective: to get rid of Noriega,” said Arias upon his arrival at the airport here, where he was greeted by a small crowd of supporters.

Arias, who heads the Christian Democratic Party, was barred from re-entering Panama last month by the government after he left to attend a conference in Miami. The government later lifted the restriction. He is considered a likely candidate for president in elections scheduled for next year.

Meanwhile, Panama City has been all but paralyzed by a general commercial strike that completed its fourth day Thursday. Most stores and businesses in the capital were closed. The strike was organized by the Civic Crusade, an alliance of anti-Noriega business and professional groups.