/ ^^2d Ses^foir^ } COMMITTEE PRINT THE PROPOSED PANAMA CAI^fAL TREATIES A DIGEST OF INFORMATION PREPARED FOR TPIE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE BY ITS SUBCOMMITTEE ON SEPARATION OF POWERS James B. Allen, Alabama, Chairman Printed for the use of the Committee on the Judiciary 95th Congress 1 2d Session / COMMITTEE PRINT THE PROPOSED PANAMA CANAL TREATIES A DIGEST OF INFORMATION PREPARED FOR THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE BY ITS SUBCOMMITTEE ON SEPARATION OF POWERS James B. Allen, Alabama, Clmirman rEBRUARY 1978 Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE 99-592 WASHINGTON : 1978 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 COMMITTEE ON THE JUDICIARY JAMES O. EASTLAND, Mississippi, Chairman EDWARD M. KENNEDY, Massachusetts BIRCH BAYH, Indiana ROBERT C. BTRD, West Virginia JAMES ABOUREZK, South Dakota JAMES B. ALLEN, Alabama JOSEPH R. BIDEN, Jr., Delaware JOHN C. CULVER, Iowa HOWARD M. METZENBAUM, Ohio DENNIS DeCONCINI, Arizona PAUL G. HATFIELD, Montana STROM THURMOND, South Carolina CHARLES McC. MATHIAS, Jr., Maryland WILLIAM L. SCOTT, Virginia PAUL LAXALT, Nevada ORRIN G. HATCH, Utah MALCOLM WALLOP, Wyoming Francis C. Rosexberger, Chief Counsel and Staff Director Subcommittee on Separation of Powers JAMES B. ALLEN, Alabama, Chairman ROBERT C. BYRD, West Virginia ORRIN G. HATCH. Utah JAMES O. EASTLAND, Mississippi WILLIAM L. SCOTT, Virginia QUEXTIN Crommelin, Jr., Chief Counsel and Staff Director Paul Guller, Editorial Director Melixda Campbell, Chief Clerk (11) LETTER OF TRANSMITTAL U.S. Sexate, CoMMriTEE OX THE JuDICIARY, SUBCOZMMITTEE OS SePARATIOX^ OF PoAVERS, Washington, B.C., January 12, 1978. Hon. James O. Easti^\nd. Chabinan, Committee on the Judiciary, U.S. Senate, Washington, B.C. Dear Mr. Ciiairmax : The Subcommittee on Separation of Powers respectfully submits the following digest of information on the pro- posed Panama Canal treaties. The information set forth has been collected by the subcommittee during the coui^e of its investigation of constitutional issues associated with the proposed treaties and is provided for the use of the committee and the Senate in studying these and related issues. A^'ith kindest personal regards, I am Respectfully, James B. Allex, Chairman, Subcommittee on Separation of Powers. (HI) CONTENTS TREATIES A General Treaty of Peace, Amity, Navigation and Commerce Between the United States and the Republic of New Granada (184G) 3 Ship Canal (Clayton-Bulwer Treaty) — Convention Between the United States and Her Britannic Majesty (1850) 13 Ship Canal (Hay-Pauncefote Treaty) (1901) 17 The Spooner Act (1902) 19 Treaty with Colombia (Hay-Herr^n) — Transmitting a Convention Be- tween the United States and the Repubhc of Colombia for the Construc- tion of a Ship Canal, etc., to Connect the Waters of the Atlantic and Pacific Oceans (1903) 23 Panama — Isthmian Canal (Hay-Varilla Treaty) (1903) 33 Treaty Between the United States and Panama for the Mutual Extra- dition of Criminals (1905) 39 Neutrality Agreement (1914) 43 Convention Between the United States and Nicaragua ceding rights for Construction of ship Canal by Nicaraguan Route (1916) 45 Friendship and Cooperation Treaty With Panama (1936) 47 Mutual Understanding and Cooperation Treat}^ with Panama (1955) 55 Termination of convention of 1914 between the U.S. and the Republic of Nicaragua respecting a Nicaraguan canal route, 1971 64 COSTS Total payments as a result of the 1903 treaty 69 Announcement of Secretarj^ of the Army Clifford L. Alexander, Jr., of appointments to the Board of Directors of the Panama Canal Company, dated September 2, 1977 71 Economic studies of the State of the Panamanian economy and projections for its future 71 Letter from David Hoyt, analyst in banking and capital markets, Congres- sional Research Service. On U.S. Commercial Bank Loans to the Gov- ernment of Panama 75 STATEMENTS Bell, Griffin B., Attorney General, opinion on a question involving the treaty-making power of the President and its relation to the power of Congress to dispose of property 79 Berger, Prof. Raoul 85 Appendix 91 Addendum 92 Rice, Charles E., professor of law, University of Notre Dame Law School__ 95 Statutory authority for certain transfers of IJ.S. property in the Isthmus of Panama • 101 Moorer, Adm. Thomas H., USN (Ret.), Chairman of the Joint Chiefs of Staff 1970-74 103 Bendetsen, Karl R., Under Secretary of the Army, 1948-52 107 Reagan, Hon. Ronald, former Governor of California 129 Rogers, William J., Past National Commander, American Legion 137 Resolution No. 445 142 Letter to President Carter 143 Haar, Herbert R., Jr., Associate Port Director, Port of New Orleans, on behalf of the Gulf Ports Association, Inc., the Mid- Gulf Seaports Marine Terminal Conference, and the Port of New Orleans 145 Two letters to President Carter 146 (V) VI CONTENTS— Continued EXCERPTS FROM THE CONGRESSIONAL RECORD- SENATE Convention With Nicaragua Terminating the Bryan-Chamorro Treaty of P»t» 1914 (Senator Mansfield) February 10, 1971 151 Convention With Nicaragua (Senator Mansfield) February 17, 1971, speech by Senator Thurmond on treaty vote 154 A compilation of 24 speeches by vSenator James B. Allen (Alabama) : 1. No Right To Intervene To Defend Canal, September 12, 1977_-_ 160 New York Times article, "The Canal Terms, Argued From Different Premises" by Paul B. Ryan 161 Washington Post article "The Case Against the Canal Treaties" by Philip Crane 162 Washington Post article "The Alternative to the Carter Pro- posals" bj^ Jesse Helms 163 2. Remarks to the Leadership and opening statement before the Subcommittee on Separation of Powers regarding Constitutional issues, September 13, 1977 165 3. Construction of New Canal In Another Country Forbidden Unless Permitted by Panama, September 15, 1977 168 4. Panamanian Minister Barletta Estimates the Cash Flow From the Proposed New Treaties in Stark Contrast With Analysis by the Treasury Department, September 16, 1977 172 Excerpt from speech bv Minister Nicolas Ardito Barletta 174 5. Ability To Operate and Defend the Canal Questionable, Septem- ber 20, 1977 176 6. Old Soldiers Never Die— They Just Obev, September 21, 1977__ 179 Editorial from Army Times, "Using the Chiefs" 180 7. Treaties Help Perpetuate Present Dictatorial Regime, Septem- ber 22, 1977 182 8. Treaties Designed To Prevent Panama From Defaulting On Tre- mendous Loans Owed Multi-National Banks, September 27, 1977 187 9. L'navoidable Adverse Environmental Impact of Proposed Treaties, September 28, 1977 195 Major Trade Routes in Panama Canal Traffic: 1975___- 198 Panama Canal traffic by commodities, 1975 199 Effect of 50-percent Tolls Increase On Commodity Move- ments Through Panama Canal in 1985 199 Diversion of commodities from Panama Canal to Suez or Cape of Good Hope resulting from oO-percent increase in Panama Canal Tolls (1985) 200 Cargo diversions involving vo3^ages of decreased length via Suez Canal or Cape of Good Hope 201 Distances Yokohama to New York on all-water routes via Panama Canal 201 10. Treaties if Ratified, Could Be Greatly Altered bv Executive Agree- ment Without Approval of the Senate, September 29, 1977___ 202 11. Statement Before The Committee on Foreign Relations — Five Major Flaws In The Treaties, October 4, 1977 205 12. Misinformation in The Historical Background, October 5, 1977. . 210 13. Events Leading to the Hav/Bunau-Varilla Treaty of 1903, October 6, 1977 214 14. Proposed Treaties Should Be Withdrawn, Redrafted, and Renego- tiated, Octol)er 10, 1977 218 15. Brilliant U.S. Negotiators in Diplomatic Coup Secured "Conces- sion" Already Provided in 1903 Treaty, October 12, 1977 222 16. Heroin Connection, Octo))er 13, 1977 225 Articles from the Washington Star and the New York Times. 226 17. Unsigned, Meaningless, Nonbinding, and Confusing Document, October 19, 1977 229 18. Panamanian Leaders Get Assets — U.S. Taxpayers Get Liabilities, October 20, 1977 232 19. Democracy and Human Rights In Panama A Farce, October 26, 1977 236 20. Existing Treaty Ties Abrogated, October 27, 1977 240 VII CONTENTS— Continued EXCERPTS FROM THE CONGRESSIONAL RECORD— SENATE A compilation of 24 speeches by Senator James B. Allen (Alabama) — Con. 21. When Present Dictator Falls, New Government Could Reject Page Troatios, Octoljer 28, 1977 242 22. No Pi-iorit}' Transit of U.S. War Vessels, November 1, 1977 244 23. Pi'csent Drug Traffic Not Foreseen in Extradition Treaty of 1904, November 2, 1977 247 24. Executive Agreement Longer Than Both Treaties Combined, November 8, 1977 251 Article from the San Diego Evening Tribune, entitled "Ad- miral Opposed Canal Treaties" ))y Adm. Horacio Rivero_. 253 Panama Canal Giveaway Violates Constitution (Senator Garn) Septem- ber 7, 1977 256 Article from the Conservative Digest 1)V Senator Orrin G. Hatch 257 Panama Canal Treaties (Senator Thurmond) September 8, 1977 260 Comparative Survey of Freedom — Tal)le of Nations 261 Poll Shows Close Margin on Panama Canal Treaty (Senator Chafee) September 8, 1977 1 265 Gallup Poll 266 Text of the Proposed Panama Canal Treaties (Senator Muskie) 266 The Canal Treaties: Reason or Risk? (Senator Harry F. Byrd, Jr.) Sep- tember 13, 1977 284 "Panama: The Specter of Violence" (Senator Cranston) September 14, 1977 289 Misconceptions About Panama (Senator Cranston) September 16, 1977 292 The Panama Canal Treaty (Senator Harry F. Byrd, Jr.) September 16, 1977 1 293 The Panama Canal: Sovereignty and Security, by Hanson W. Baldwin, AEI Defense Review 293 The Panama Canal Treaty (Senator Thurmond) September 21, 1977 314 Article from the Jacksonville Times-L"^nion entitled "Guantanamo Surrender Next" by John Chamberlain 314 The Panama Canal (Mr. Cranston) statement l)y Senator Hollings 316 The Panama Canal Treaties (Senator Dole), defines defects of treaties and suggests amendments 322 The Panama Canal Treaties (Senator Harry F. Byrd, Jr.) September 23, 1977 331 "Communists Welcome Panama Canal Treaty," b\" Henry J. Taylor, sjmdicated columnist 331 Panama Canal Issue (Senator Mathias), editorial in the Cleveland Press, with response from Reed I. Irvine 332 Ratification of the Panama Canal Treaties (Senator Sparkman) statement by Senator Strom Thurmond 334 The Panama Canal Treaties (Senator Thurmond), news release by Senator Dole: "Confidential Cable Proves Panama Canal Treaty Flawed" 338 Panama Canal Treaties (Senator Percy), statement by Senator William L. Scott 1 340 The Panama Canal Treaty Cable (Senator Dole) 345 Doul)ts Al^out the Canal Treaties TSenator Harry F. Byrd Jr.), article from Human Events discusses the effects of the Escoljar statements entitled "Senate Remains Skeptical About Panama Canal Treaties" 347 Statements before the Committee on Foreign Relations: Senator Mike Gravel 350 Senator Paul Laxalt 359 Senator Bob Dole 365 Senator William L. Scott 371 Senator Jesse Helms 375 Panama Canal Treaty (Senator Thurmond), articles: "U.S., Panama Differences Cited: Canal Treaties Get a Jolt," from the Washington Post, October 5, 1977, by John M. Goshko 379 "Dole Says U.S. Cable Shows Differences With Panama on Treaties," from the New York Times, October 5, 1977, by Graham Hovey 381 The Panama Canal (Senator McGovern), letters to the editor. Nation's Center News, September 16, 1977 383 VIII CONTENTS— Continued EXCERPTS FROM THE CONGRESSIONAL RECORD— SENATE— Continued Page The Panama Canal Treaties (Senator Harry F. Byrd, Jr.) 385 The Panama Canal Treaty Should Be Amended or Withdrawn (Senator Dole) 387 Switch in Panama Canal Position of U.S. Shipping (Senator Thurmond) article entitled "Canal Toll Plan Sours Lykes Chief — Support for Pact Dropped Because of Toll Increase," from the Journal of Commerce by Anita Schrodt 388 Another Panamanian Negotiator Denies U.S. Intervention Rights Under Treaty (Senator Dole), television report from the Foreign Broadcast Information Service 390 Senator Jesse Helms Upon Filing Suit Asks the U.S. Supreme Court To Rule on Meaning of Article IV, Section 3 391 The Panama Canal and Allegations of Drug Trafficking (Senator Dole) 400 Panama Canal Poll (Senator Thurmond) article in October 18, 1977 En- quirer, Lantana, Fla., entitled Poll: 97 Percent Say Don't Give Control of Canal to Panama 403 The Panama Canal Treaties (Senator Thurmond) : Statement of Understanding issued by the White House 406 Report from the Foreign Information Broadcast Service 406 Article from the Washington Post, October 16, 1977, entitled "Gen. Omar Torrijos Denies Signing New Canal Pact 406 U.S. Interests in the Panama Canal (Senator Harry F. Byrd, Jr.) articles: "Keep the Canal" from the Richmond Va. New Leader, February 3, 1976 408 "Panama: Strategic Pitfall" from Strategic Review, Winter 1976, by Lt. Gen. V. R. Krulak, USMC, (Ret.) 409 Torrijos Continues to Orchestrate Blackmail (Senator Thurmond) article from the Richmond Times-Dispatch, April 10, 1976, entitled "Resolve Dispute by 1977, Panamanian Warns" 413 Panama Canal: Catalyst for Restoration of National Will (Senator Harry F. Byrd, Jr.), address by Franz O. WiUenbucher, J. D., Captain, U.S. Navy, (Ret.) 415 EXCERPTS FROM THE CONGRESSIONAL RECORD- HOUSE The Canal Zone — Panama and the United States (Representative Hansen of Idaho), article from the Heritage Foundation 423 Worried About A Giveaway (Representative James Abdor of (South Dakota) editorial from the Herald, Canova, S.D., entitled "To Give Away— Or Keep It" 430 The Panama Canal Treaty: Questionable Defense Provisions (Representa- tive Leo C. Zeferetti, New York), article entitled "The Canal Terms, Argued From Different Premises," September 11, 1977, New York Times, by Paul B. Ryan 430 A Fresh Look at the Panama Canal Treaty (Representative Robert H. Michel, Illinois), article from the Peoria Journal Star, September 8, 1977, entitled "Gangster in the White House" 433 An Opponent to New Panama Treaties (Representative Robert J. Lago- marsino, California), statement by Dr. John Wasylik, National Com- mander-in-Chief, Veterans of Foreign Wars 435 State Department Negotiated Panama Canal Treaties in Flagrant Violation of National Environment PoHcy Act (Representative Gene Snyder, Kentucky), press release and correspondence 441 The Panama Canal Treaty (Representative Dan Daniel, Virginia), state- ment of Governor Meldrim Thomson, Jr., N.H., and Resolution No. 445_ 444 Latin Leaders Refuse To Endorse Treaties (Representative Gene Snyder, Kentucky) article from the Hemisphere Hotline Report by Virginia Prewett ----- 4o0 "Human Rights in Panama" (Representative Lagomarsino, California) __ 4o2 Ranking of Nations by Political Rights 453 Ranking of Nations by Civil Rights 454 IX CONTENTS— Continued EXCERPTS FROM THE CONGRESSIONAL RECORD- HOUSE— Continued Letter to Representative Gene Snyder, Kentucky, from Carolyn Lowe, Page vice president, Panama Audubon Society 456 Why We Must Keep America's Canal In American Hands (Representative Steven D. Sj^mms, Idaho), address by Governor Meldrim Thomson, Jr., New Hampshire, to the John Birch Society 457 Panama Canal Treaty Issue (Representative Robert J. Lagomarsino, California), testimony of Representative Samuel S. Stratton, New York. 463 MISCELLANEOUS Excerpts from speeches given on July 19, 1977 before the Panamanian National Assembly at Panama City, Panama 469 Letters to the New York Times editor from Representative John M. Mur- phy 476 "The Nicaragua Canal Storj^", by Lt. Col. H. R. Haar, Jr., Corps of Engineers, U.S. Army 479 Map: Route of the Nicaragua Canal Location 483 Panama Canal Plays Vital United States Business Role, by Guy Halverson, Christian Science Monitor 489 Scare Talk and the Canal, by Roger W. Fontaine, director of Latin Amer- ican Studies at Georgetown University Center for Strategic and Inter- national Studies, from the Wall Street journal 491 Map: The Third Locks — Terminal Lake Plan, showing extensive excava- tions made between 1939 and 1942 493 "Panama Canal", excerpted from the Encvclopaedia Britannica 1970, by Capt. Miles P. Du Val, Jr., U.S. Navy (Retired) 494 Submitted for the record by the Panamanian Committee for Human Rights. 503 Letter to Bernard Diederich, Time Magazine, from Phillip Harman, director of information. Canal Zone Non-Profit Public Information Corporation, August 20, 1977 515 Excerpt from statement of Virginia Prewett, Washington columist on Latin America, North American Newsletter Alliance 517 Prepared statement of Hon. Gene Snyder of Kentucky 518 The Panama Canal— An Early View (1910), by the late Fred S. Ball, Sr., of Montgomery, Ala 522 Letter from Senator Allen to Secretary of the Army, Chfford Alexander, inquiring about the authenticity of a memorandum 525 Sworn statements of Leland L. Riggs, Jr., retired Special Agent in Charge of the U.S. Drug Enforcement Administration, dated December 1, 1977. 528 TREATIES PEACE, AMITY, NAVIGATION, AND COMMERCE General treaty, rcith additional article, signed at Bogold Decenvber 12, 184O. Ratified by Ncto Granada ^ June 15, 1847. Senate advice and consent to ratification June 3, 18^8. Ratified by the President of the United States June 10, 1848. Ratification's exchanged at Washington June 10, 1848. Entered into force June 10, 1848. Proclaimed by the President of the United States June 12, 1848. Article 33 abrogated by the United States July 1, 1916, in accordance tcith Seaman's Act of March 4, 1915.^ Provisions inconsistent with those of agreement of September 13, 1935,^ superseded by 1935 provisions ichile later agreement remained in force. 9 Stat. 881 ; Treaty Series 54 * A General Treaty of Peace, Amity, Navigation and Commerce Be- tween THE United States of America and the Republic of New Granada The United States of North America and the Republic of New Granada ^ in South America, desiring to make lasting and firm the friendship and good understanding which happily exists between both nations have resolved to fix in a manner clear, distinct and posi- tive, the rules which shall in future be religiously observed between each other by means of a treaty, or general convention of peace and friendship, commerce and navigation. For tliis desirable object the President of the United States of America has conferred full powers on Benjamin A. Bidlack a citizen of the said States and their Charge d'Atfaires in Bogota, and the President of the Republic of New Granada has conferred similar and equal powers upon Manuel Maria Mallarino Secretary of State and foreign relations, who, after having exchanged their said full powers in due form, have agreed to the following articles. Article 1^* There shall be a perfect, firm and inviolable peace and sincere friendship be- tween the United States of America and the Republic of New Granada, in all the extent of their possessions and territories, and between their citizens re- spectively, without distinction of persons or places. Article 2"* The United States of America and the Republic of New Granada, desiring to live in peace and harmony with all the nations of the earth, by means of a policy frank and equally friendly with all, engage mutually not to grant any particular favor to other nations, in respect of commerce and navigation, which shall not immediately become common to the other party, who shall enjoy the same freely, if the concession was freely made, or on allowing the same com- pensation, if the concession was conditional. 1 See footnote 1, ante, p. 865. « 38 Stat. 1164. 3 EAS 89. post, p. 913. * For a detailed study of this treaty, see 5 Miller 115. (3) 4 Article 3'" The two high contracting parties, being likewise desirous of placing the com- merce and navigation of their respective countries on the liberal basis of per- fect equality and reciprocity, mutually agree that the citizens of each may frequent all the coasts of countries of the other, and reside and trade there, in all kinds of produce, manufactui-es and merchandize ; and that they shall enjoy, all the rights, privileges and exemptions, in navigation and commerce, which native citizens do or shall enjoy, submitting themselves to the laws, decrees and usages there established, to which native citizens are subjected. But it is understood that this article does not include the coasting trade of either country, the regulation of which is reserved by the parties respectively according to their own separate laws. Article 4*'* They likewise agree that whatever kind of produce, manufacture of mer- chandize of any foreign country can be, from time to time, lawfully imported in- to the United States in their own vessels, may be also imported in vessels of the Republic of New Granada ; and that no higher or other duties upon the ton- nage of the vessel and her cargo, shall be levied and collected, whether the im- portation be made in vessels of the one country or of the other. And in like manner, that whatever kind of produce, manufactures or merchandize of any foreign country, can be from time to time lawfully imported into the Republic of New Granada in its own vessels, may be also imported in vessels of the United States ; and that no higher or other duties, upon the tonnage of the vessel and her cargo, shall be levied or collected, whether the importation be made in ves- sels of the one country or the other. And they further agree, that whatever may be lawfully exported or reexported, from the one country, in its own vessels to any foreign country, may in like man- ner be exported or reexported, in the vessels of the other country. And the same bounties, duties and drawbacks, shall be allowed and collected, whether such exportation or reexportation, be made in vessels of the United States or of the Republic of New Granada. Article 5^'' No higher or other duties shall be imposed on the importation into the United States of any articles the produce or manufacture of the Republic of New Granada, and no higher or other duties shall be imposed on the importation into the Republic of New Granada of any articles the produce or manufactures of the United States, than are or shall be payable on the like articles being the produce or manufactures of any other foreign country ; nor shall any higher or other duties or charges be imposed in either of the two countries on the exportation of any articles to the United States or to the Republic of New Granada respectively, than such as are payable on the exportation of the like articles to any other foreign country, nor shall any prohibition be imposed on the exportation or importation of any articles, the produce or manufactures of the I'uited States or the Republic of New Granada to or from the territories of the United States or to or from the territories of the Republic of New Granada which shall not equally extend to all other nations. Article 6*" In order to prevent the possibility of any misunderstanding, it is hereby declared that the stipulations contained in the three preceding articles are to their full extent applicable to the vessels of the United States and their cargoes arriving in the ports of New Granada, and reciprocally to the vessels of the said Republic of New Granada and their cargoes arriving in the ports of the Ignited States ; whether they proceed from the ports of the country to which they respectively belong, or from the ports of any other foreign country: and in either case no discriminating duty shall be imposed or collected in the ports of either country on said vessels or their cargoes, whether the same shall be of native or foreign produce or manufacture. Article 7*'' It is likewise agreed, that it shall be wholly free for all merchants, commanders of ships, and other citizens of both countries to manage by themselves or agents their own business in all the ports and places subject to the jurisdiction of each 5 other, as well with respect to the consignments and sale of their goods and merchandize by whole sale or retail, as with respect to: the loading, unloading and sending off their ships ; they being, in all these cases, to be treated as citizens of the country in which they reside, or at least to be placed on an equality with the subjects or citizens of the most favored nation. Article 8*" The citizens of neither of the contracting parties shall be liable to any em- J)argo, nor be detained with their vessels, cargoes, merchandize or effects for any military expedition, nor for any public or private purpose whatever, without allowing to those interested an equitable and suflacient indemnification. Article 9*" Whenever the citizens of either of the contracting parties shall be forced to seek refuge or asylum, in the rivers, bays, ports or dominions of the other with their vessels, whether merchant or of war, public or private, through stress of weather, pursuit of pirates or enemies, or want of provisions or water, they shall be received and treated with humanity, giving to them all favor and protec- tion for repairing their ships, procuring provisions, and placing themselves in a situation to continue their voyage, without obstacle or hindrance of any kind or the payment of port fees or any charges other than pilotage, except such vessels continue in port longer than forty eight hours counting from the time they cast anchor in port. Article 10'" All the ships, merchandize and effects belonging to the citizens of one of the contracting parties, which may be captured by pirates, whether within the limits of its jurisdiction or on the high seas, and may be carried or found in the rivers, roads, bays, ports or dominions of the other, shall be delivered up to the owners, they proving in due and proper form their rights, before the competent tribunals; it being well understood that the claim shall be made within the term of one year by the parties themselves, their attorneys, or agents of their respective Governments. Article ll*** When any vessels belonging to the citizens of either of the contracting parties shall be wrecked or foundered or shall suffer any damage on the coasts, or within the dominions of the other, there shall be given to them all assistance and protection, in the same manner which is usual and customary with the vessels of the nation where the damage happens : permitting them to unload the said vessel, if necessary, of its merchandize and effects, without exacting for it any duty, impost or contribution whatever, unless they may be destined for consumption or sale in the country of the port where they may have been disembarked. Article 12''' The citizens of each of the contracting parties shall have power to dispose of their personal goods or real estate within the jurisdiction of the other, by sale, donation, testament, or otherwise, and their representatives being citizens of the other party, shall succeed to their said personal goods or real estate, whether by testament or ah intestatn, and they may take possession thereof, either by them- selves or others acting for them, and dispose of the same at their will, paying such dues only as the inhabitants of the country, wherein said goods are, shall be sub- ject to pay in like cases. Article 13*'' Both contracting parties promise and engage formally to give their special pro- tection to the persons and property of the citizens of each other, of all occupations, who may be in the territories subject to the jurisdiction of one or the other, tran- sient or dwelling therein, leaving open and free to them the tribunals of justice for their judicial recourse, on the same terms which are usual and customary with the' natives or citizens of the country ; for which purpose they may either appear in proper person or employ in the prosecution or defense of their rights such ad- vocates, solicitors, notaries, agents and factors as they may judge proper in all their trials at law ; and such citizens or agents shall have free opiwrtunity to be 6 present at the decisions or sentences of the tribunals, in all cases which may con- cern them, and likewise at the taking of all examinations and evidence which may be exhibited in the said trials. Article 14^** The citizens of the United States residing in the territories of the Republic of New Granada, shall enjoy the most perfect and entire security of conscience with- out being annoyed, prevented, or disturbed on account of their religious belief. Neither shall they be annoyed, molested or disturbed in the proper exercise of their religion in private houses or in the Chapels or places of worship appointed for that purpose, provided that in so doing they observe the decorum due to divine worship, and the respect due to the laws, usages and customs of the country. Liberty shall also be gi-anted to bury the citizens of the United States who may die in the territories of the Republic of New Granada in convenient and adequate places to be appointed and established by themselves for that purpose, with the knowledge of the local authorities, or in such other places of sepulture as may be chosen by the friends of the deceased ; nor shall the funerals or sepulchres of the dead be disturbed in any wise nor upon any account. In like manner the citizens of New Granada shall enjoy, within the Govern- ment and territories of the United States, a perfect and unrestrained liberty of conscience and of exercising their religion, publicly or privately, within their own dwelling houses, or in the chapels and places of worship appointed for that purpose, agreeably to the laws, usages & customs of the United States. Article 15*" It shall be lawful for the citizens of the United States of America and of the Republic of New Granada to sail with their ships, with all manner of lil>erty and security, no distinction being made who are the proprietors of the merchandize laden thereon, from any port to the places of those who now are or hereafter shall be at enmity with either of the contracting parties. It shall likewise be lau-f ul for the citizens aforesaid to sail with the ships and merchandize before mentioned and to trade with the same liberty and security from the places, ports and havens of those who are enemies of both or either party, without any opposition or dis- turbance whatsoever, not only directly from the places of the enemy before men- tioneil to neutral places, but also from one place belonging to an enemy to another place belonging to an enemy, whether they be under the jurisdiction of one power or under several. And it is hereby stipulated that free ships shall also give free- dom to goods, and that every thing which shall be found on board the ships be- longing to the citizens of either of the contracting parties, shall be deemed to be free and exempt, although the whole lading or any part thereof should appertain to the enemies of either (contraband goods being always excepted.) It is also agreed in like manner, that the same liberty shall be extendetl to i)ersons who are on board a free ship, with this effect, that although they be enemies to both or either party, they are not to be taken out of that free ship, unless they are oflScers and soldiers, and in the actual service of the enemies ; provided however, and it is hereby agreed, that the stipulations in this article contained, declaring that the flag shall cover the property, shall be understood as applying to those powers only, who recognize this principle, but if either of the two contracting parties shall be at war with a third, and the other remains neutral, the flag of the neutral shall cover the property of enemies whose Governments acknowledge this principle and not of others. Article 16**" It is likewise agreed, that in the case where the neutral flag of one of the con- tracting ixarties .shall protect the property of the enemies of the other, by virtue of the above stipulation it shall always be understood that the neutral property found on board such enemy's vessels, shall be held and considered as enemy's property, and as such shall be liable to detention and confiscation, except such property as was put on board such vessel before the declaration of war, or even afterwards, if it were done without the knowledge of it: but the contracting parties agree that two months having elapsed after the declaration of war. their citizens shall not plead ignorance thereof. On the contrary, if the flag of the neutral does not pro- tect the enemy's property, in that case, the goods and merchandize of the neutral embarked on such enemy's shij) shall be free. 7 COLOMBIA Aeticle 17*^ This liberty of navigation and commerce shall extend to all kinds of mer- chandise, excepting those only which are distinguished by the name of contra- hand; and under this name of contrahand, or prohibited goods, shall be com- prehended. 1^* Cannons, mortars, howitzers, swivels, blunderbusses, muskets, rifles, car- bines, pistols, pikes, swords, sabres, lances, spears, halberts ; and grenades, bombs, powder, matches, balls, and all other things belonging to the use of these arms. 2"*^ Bucklers, helmets, breast plates, coats of mail, infantry belts, and clothes made up in the form and for the military use. S** Cavalry belts, and horses with their furniture. 4**" And generally all kind of arms and instruments of iron, steel, brass, and copper, or of any other materials manufactured, prepared and formed, expressly to make war by sea or land. 5th Provisions that are imported into a besieged or blockaded place. Article 18*" All other merchandize and things not comprehended in the articles of contra- band, explicitly enumerated and classified as above, shall be held and con- sidered as free, and subjects of free and lawful commerce, so that they may be carried and transported in the freest manner by the citizens of both the con- tracting parties, even to places belonging to an enemy, excepting those places only which are at that time besieged or blockaded ; and to avoid all doubt in this particular, it is declared, that those places only are besieged, or blockaded, which are actually attacked by a belligerent force capable of preventing the entry of the neutral. Article 19*'' The articles of contraband, before enumerated and classified, which may be found in a vessel bound for an enemy's port, shall be subject to detention and confiscation, leaving free the rest of the cargo and the ship, that the owners may dispose of them as they see proper. No vessel of either of the two nations shall be detained on the high seas on account of having on board articles of contra- band, whenever the master, captain or supercargo of said vessels will deliver up the articles of contraband to the captor, unless the quantity of such articles be so great and of so large a bulk, that they cannot be received on board the capturing ship without great inconvenience ; but in this and all other cases of just detention, the vessel detained shall be sent to the nearest convenient and safe port, for trial and judgment according to law. Article 20*" And whereas it frequently happens, that vessels sail for a port or place be- longing to an enemy, without knowing that the same is besieged or blockaded or invested, it is agreed that every vessel so circumstanced may be turned away from such port or place, but shall not be detained, nor shall any part of her cargo, if not contraband, be confiscated, unless, after warning of such blockade or investment, from the commanding officer of the blockading forces, she shall again attempt to enter; but she shall be permitted to go to any other port or place she shall think proper. Nor shall any vessel that may have entered into such port before the same was actually besieged, blockaded or invested by the other, be restrained from quitting that place with her cargo, nor if found therein, after the reduction and surrender, shall such vessel or her cargo be liable to confisca- tion, but they shall be restored to the owners thereof. Article 21'* In order to prevent all kind of disorder in the visiting and examination of the ships and cargoes of both the contracting parties on the high seas, they have agreed mutually, that whenever a national vessel of war, public or private, shall meet with a neutral of the other contracting party, the first shall remahi out of cannon shot, unless in stress of weather, and may send its boat with two 99-592—78 2 8 or three men only, in order to execute the said examination of the papers concerning the ownership and cargo of the vessel, without causing the least extortion, violence or ill treatment, for which the commanders of said armed ships shall be responsible with their persons and property ; for which purpose the commanders of private armed vessels shall, before receiving their com- missions, give suflBcient security to answer for all the damages they may commit. And it is expressly agreed, that the neutral party shall in no case be required to go on board the examining vessel, for the purpose of exhibiting her papers, or for any other purpose whatever. Article 22°<* To avoid all kind of vexation and abuse in the examination of the papers relat- ing to the ownership of the vessels belonging to the citizens of the two contract- ing parties, they have agreed, and do hereby agree, that in case one of them should be engaged in war, the ships and vessels belonging to the citizens of the other must be furnished with sea letters or passports, expressing the name, prop- erty and bulk of the ship, as also the name and place of habitation of the master and commander of the said vessel, in order that it may thereby appear, that the ship really and truly belongs to the citizens of one of the parties : they have like- wise agreed, that when such ships have a cargo, they shall also be provided, besides the said sea letters or passports, with certificates containing the several particulars of the cargo, and the place whence the ship sailed, so that it may be known, whether any forbidden or contraband goods are on board the same, which certificates shall be made out by the oflScers of the place whence the ship sailed, in the accustomed form, without which requisites, said vessel may be detained, to be adjudged by the competent tribunal, and may be declared lawful prize, unless the said defect shall be proved to be owing to accident and shall be satis- fied or supplied by testimony entirely equivalent. Article 23*^ It is further agreed, that the stipulations above expressed, relative to the visit- ing and examination of vessels, shall apply only to those which sail without convoy, and when said vessels shall be under convoy, the verbal declaration of the commander of the convoy, on his word of honor, that the vessels under his protection belong to the nation whose flag he carries, and when they may be bound to an enemy's port, that they have no contraband goods on board, shall be sufficient. Article 24*" It is further agreed, that, in all cases, the established courts for prize causes, in the country to which the prizes may be conducted, shall alone take cognizance of them. And whenever such tribunals of either party shall pronounce judgment against any vessel or goods or property claimed by the citizens of the other party, the sentence or decree shall mention the reasons or motives upon which the same shall have been founded, and an authenticated copy of the sentence or decree and of all the proceedings in the case, shall, if demanded, be delivered to the com- mander or agent of said vessel, without any delay, he paying the legal fees for the same. Article 25" For the purpose of lessening the evils of war, the two high contracting parties, farther agree that, in case a war should unfortunately take place between them, liostilities shall only be carried on by persons duly commissioned by the Govern- ment, and by those under their orders, except in repelling an attack or invasion, and in the defense of property. Article 26*" Whenever one of the contracting parties shall be engaged in war with another State, no citizen of the other contracting party shall accept a commission or letter of marque, for the purpose of assisting or cooperating hostilely with the said enemy against the said parties so at war, under the pain of being treated as a pirate. Article 27*" If by any fatality which cannot be expected, and Ood forbid, the two contract- ing parties should be engaged in a war with each other, they have agreed and do agree now for then, that there shall be allowed the term of six months to the 9 merchants residing on the coasts and in the ports of each other, and the term of one year to those who dwell in the interior, to arrange their business and trans- port their effects wherever they please, giving to them the safe conduct necessary for it, which may serve as a sufficient protection until they arrive at the desig- nated port. The citizens of all other occupations, who may be established in the territories or dominions of the United States or of New Granada, shall be re- spected, and maintained in the full enjoyment of their personal liberty and prop- erty, unless their particular conduct, shall cause them to forfeit this protection, which in consideration of humanity, the contracting parties engage to give them. Abticle 28^" Neither the debts due from individuals of the one nation to the individuals of the other, nor shares, nor money which they may have in public funds, nor in public or private banks, shall ever in any event of war or of national difference be sequestered or confiscated. Aeticle 29*'* Both the contracting parties being desirous of avoiding all inequality, in rela- tion to their public communications and official intercourse, have agreed and do agree to grant to the envoys, ministers, and other public agents, the same favors, immunities and exemptions, which those of the most favored nations do or shall enjoy, it being understood that, whatever favors, immunities or privileges, the United States of America or the Republic of New Granada may find it proper to give to the ministers and public agents of any other power, shall, by the same act, i)e extended to those of each of the contracting parties. Article 30*'' To make more effectual the protection which the United States and the Re- public of New Granada shall afford in future to the navigation and commerce of the citizens of each other, they agree to receive and admit Consuls and Vice- consuls, in all the ports open to foreign commerce, who shall enjoy in them all the rights, prerogatives and immunities of the Consuls and Viceconsuls of the most favored nation, each contracting party, however, remaining at liberty to except those ports and places in which the admission and residence of such Consuls may not seem convenient. Article 31^* In order that the Consuls and Viceconsuls of the two contracting parties may enjoy the rights, prerogatives and immunities which belong to them, l)y their public character, they shall, before entering on the exercise of their functions, exhibit their commission, or patent, in due form, to the Government to which they are accredited, and having obtained their Exequatur, they shall be held and considered as such by all the authorities, magistrates and inhabitants in the consular district in which they reside. Article 32* It is likewise agreed that the Consuls, their Secretaries, officers and persons attached to the service of Consuls, they not being citizens of the country in which the Consul resides, shall be exempt from all public senice, and also from all kind of taxes, imposts and contributions, except those which they shall be obliged to pay on account of commerce or their property, to which the citizens and inhabi- tants native and foreign of the country in which they reside are subject, being in every thing Itesides subject to the laws of the respective States. The archives and papers of the Consulates shall be respected inviolably, and under no pretext, whatever, shall any magistrate seize, or, in any way, interfere with them. Article 33'' The said Consuls shall have power to require the assistance of tlie authorities of the country, for the arrest, detention and custody of deserters from the public and private vessels of their country, and for that purpose they sliall address themselves, to the courts, judges, and officers competent, and shall demand in •'■'Art. 8?. abropratpfl by the United States July 1, 1916, In accordance with Seamen's Act of Mar. 4, 101.5 (3S Stat. 1164). 10 writing the said deserters, proving by an exhibition of the registers of the vessel's or ship's roll, or other public documents, that those men were part of the said crews ; and on this demand so proved (saving however where the contrary is proved by other testimonies) the delivery shall not be refused: Such deserters, when arrested, shall be put at the disposal of the said Consuls, and may be put in the public prisons, at the request and expense of those who reclaim them, to be sent to the ships to which they belonged, or to others of the same nation. But if they be not sent back within two months, to be counted from the day of their arrest, they shall be set at liberty, and shall be no more arrested for the same cause. Article 34''' For the purpose of more effectually protecting their commerce and navigation, the two contracting parties do hereby agree to form as soon hereafter as cir- cumstances will permit, a consular convention, which shall declare specially the powers ami immunities of the Consuls and Yiceconsuls of the respective parties.^ Aeticle 35*^ The United States of America and the Republic of New Granada desiring to make as durable as possible, the relations which are to be established between the two parties by virtue of this treaty, have declared solemnly, and do agree to the following points. 1'* For the better understanding of the preceding articles, it is, and has been stipulated, between the high contracting parties, that the citizens, vessels and merchandize of the United States shall enjoy in the ports of New Granada, in- cluding those of the part of the granadian territory generally denominated Isthmus of Panama from its southern-most extremity until the boundary of Costa Rica, all the exemptions, privileges and immunities, concerning commerce and navigation, which are now, or may hereafter be enjoyed by Granadian citizens, their vessels and merchandize ; and that this equality of favours shall be made to extend to the passengers, correspondence and merchandize of the United States in their transit across the said territory, from one sea to the other. The Govern- ment of New Granada guarantees to the Government of the United States, that the right of way or transit across the Istfimns of Payiamd, upon any modes of communication that now exist, or that may be, hereafter, constructed, shall be open and free to the Government and citizens of the United States, and for the transportation of any articles of produce, manufactures or merchandize, of law- ful commerce, belonging to the citizens of the United States ; that no other tolls or charges shall be levied or collected upon the citizens of the United States, or their said merchandize thus passing over any road or canal that may be made by the Government of New Granada, or by the authority of the same, than is under like circumstances levied upon and collected from the granadian citizens : that any lawful produce, manufactures or merchandize belonging to citizens of the T^nited States thus passing from one sea to the other, in either direction, for the purpose of exportation to any other foreign country, shall not be liable to any import duties whatever; or having paid such duties, they shall be entitled to drawback, upon their exportation: nor shall the citizens of the United States be liable to any duties, tolls, or charges of any kind to which native citizens are not subjected for thus passing the said Isthmus. And, in order to secure to themselves the tranquil and constant enjoyment of these advantages, and as an especial com- pensation for the said advantages and for the favours they have acquired by the and G**' articles of this Treaty, the United States guarantee positively and efficaciously to New Granada, by the present stipulation, the perfect neutrality of the before mentioned Isthmus, with the view that the free transit from the one to the other sea, may not be interrupted or embarrassed in any future time while this Treaty exists : and in consequence, the United States also guarantee, in the same manner, the rights of sovereignty and property which New Granada has and possesses over the said territory. 2'^ Tlie present Treaty shall remain in full force and vigor, for the term of twenty years, from the day of the exchange of the ratitications ; and. from the same day, the treaty that was concluded between the United States and Colombia on the 18th of October 1824,'^ shall cease to have effect, notwithstanding what was disposed in the 1"* point of its 31st article. « Rpo TS 55. post. p. 882. ■ TS 52, ante, p. 855. 11 S""** Notwithstanding the foregoing, if neither party notifies to the other its intention of reforming any of, or all, the articles of this treaty twelve months before the expiration of the twenty years, stipulated above, the said treaty shall continue binding on both parties, beyond the said twenty years, until twelve months from the time that one of the parties notifies its intention of proceeding to a reform. 4'" If any one or more of the citizens of either party shall infringe any of the articles of this treaty, such citizens shall be held personally responsible for the same, and the harmony and good correspondence between the nations shall not be interrupted thereby ; each party engaging in no way to protect the offender, or sanction such violation. o^^ If, unfortunately, any of the articles contained in this treaty should be violated or infringed in any way whatever, it is expressly stipulated that neither of the two contracting i:)arties shall ordain or authorize any acts of reprisal, nor shall declare war against the other on complaints of injuries or damages, until the said party considering itself offended shall have laid before the other a statement of such injuries or damages, verified by competent proofs, demand- ing justice and satisfaction, and the same shall have been denied, in violation of the laws of international right. 6*" Any special or remarkable advantage that one or the other power may enjoy, from the foregoing stipulations, are and ought to be always understood in virtue and as in compensation of the obligations they have just contracted and which have been specified in the first number of this article. Article 36*'' The present treaty of i>eace, amity, commerce and navigation shall be ap- proved and ratified by the President of the United States, by and with the advice and consent of the senate thereof, and by the President of the Republic of New^ Granada with the consent and approbation of the Congress of the same, and the ratifications shall be exchanged in the city of Washington, within eighteen months from the date of the signature thereof, or sooner, if possible. In faith whereof, we the Plenipotentiaries of the United States of America, and of the Republic of New Granada have signed and sealed these presents in the city of Bogota on the twelfth day of December, in the year of Our Lord one thousand eight hundred and forty six. [SEAL] B. A. BiDLACK. [seal] M. M. Mallaeino. Additional Article The RepubUcs of the United States and of New Granada vnll hold and admit as national ships of one or the other, all those that shall be provided by the respective Government with a Patent issued according to its laws. The present additional article shall have the same force and validity as if it were inserted, word for word, in the Treaty signed this day. It shaU be ratified, and the ratifications shall be exchanged at the same time. In 'n-itness whereof, the respective Plenipotentiaries have signed the same, and have affixed thereto their seals. Done in the city of Bogota, the twelfth day of December, in the year of Our Lord one thousand eight hundred and forty six. [seal] [seal] B. A. BiDLACK. M. M. Mallarino. SHIP CANAL (CLAYTOX-BULWER TREATY) Convention signed at Washington April 19, 1850. Senate advice and consent to ratification May 22. 1850. Ratified the President of the United States May 23, 1850. Ratified ly the United Kingdom June 11, 1850. Ratifications exchanged at Washington July 4, 1850. Entered into force J uly 4, 1850. Proclaimed hy the President of the United States July 5. 1850. Stipcrsvded February 21, 1902, by treaty of Xovemher 18, 1901} Stat. 095 ; Treaty Series 122 Convention Between the United States of America and Her Britannic Majesty The United States of America and Her Britannic Ma jesty, bein^ desirous of consolidating the relations of amity which so hapitily subsist between them, by setting forth and fixing in a Convention their views and intentions with reference to any means of commnnication by Ship Canal, which may be constructed between the Atlantic and Pacific Oceans, by the way of the River San Juan de Nicaragua and either or both of the Lakes of Nicaragua or Managua, to any port or place on the Pacific Ocean — The President of the United States, has conferred full powers on John M. Clayton. Secretary of State of the United States ; and Her Britannic Majesty on the Right Honourable Sir Plenry Lytton Bulwer, a Member of Her Majesty's Most Honourable Privy Council, Knight Commander of the Most Hon- ourable Order of the Bath, and Envoy Extraordinary and Minister Plenipoten- tiary of Her Britannic Majesty to the United States, for the aforesaid purpose ; and the said Plenipotentiaries having exchanged their full powers, which were found to be in proper form, have agreed to the following articles. Article I The Governments of the United States and Great Britain hereby declare, that neither the one nor the other will ever obtain or maintain for itself any exclusive control over the said Ship Canal ; agreeing, that neither will ever erect or main- tain any fortifications commanding the same, or in the vicinity thereof, or occupy, or fortify, or colonize, or assume, or exercise any dominion over Nicaragua, Costa Rica, tlie Mosquito Coast, or any part of Central America ; nor will either make use of any protection which either affords or may afford, or any alliance which either has or may have, to or with any State or People for the purpose of erecting or maintaining any such fortifications, or of occupying, fortifying, or colonizing Nicaragua, Costa Rica, the Mosquito Coast or any part of Central America, or of assuming or exercising dominion over the same: nor will the United States or Great Britain take advantage of any intimacy, or use any alliance, connection or influence that either may possess with any State or Government through whose territory the said Canal may pass, for the purpose of acquiring or holding, directly or indirectly, for the citizens or subjects of the one, any rights or advantages in regard to commerce or navigation through the said Canal, which shall not be offered on the same tenns to the citizens or subjects of the other. Article II Vessels of the United States or Great Britain, traversing the said Canal, shall, in case of war between the contracting parties, be exempted from blockade, deten- tion or capture, by either of the belligerents : and this provision shall extend to such a distance from the two ends of the said Canal, as may hereafter be found experitain and Ireland, and of the British Dominions lieyond the Seas, King, and Emperor of India, being desirous to facilitate the construction of a ship canal to connect the Atlantic and Pacific Oceans, hy wliatever route may be considered expedient, and to that end to remove any objection which may arise out of the Convention of the 19th April, 19o0.^ commonly called the Clayton-Bulwer Treaty, to the construction of such canal under the auspices of the (iovernment of the United States, without impairing the "general principle" of neutralization established in Article XllI of that Convention, have for that purpose appointed as their Plenipotentiaries. The I*resident of the T'nited States, John Hay, Secretary of State of the United States of America ; And His Majesty Edward the Seventh, of the United Kingdom of Great Britain and Ireland, and of the British Dominions beyond the Seas, King, and Emperor of India, the Right Honorable Lord I»auncefote, G. C. B., G. C. M. G., His Majesty's Ambassador Extraordinary and Plenipotentiary to the United States: Who. having communicated to each other their full powers which were found to be in due and proper foi-m, have agreed upon the foll(»wing Articles : x\rticle I The High Contracting Parties agree that the present Treaty shall supersede the afore-mentioned Convention of the 19th April, 1850, Article II It is agreed tlxat the canal may be constructed under the auspices of the Government of the United States, either directly at its own cost, or by gift or loan of money to individuals or Corporations, or through subscription to or purchase of stock or shares, and that, subject to the provisions of the present Treaty, the said Government shall have and enjoy all the rights incident to such construction, as well as the exclusive right of providing for the regulation and management of the canal. Article III The United States adopts, as the basis of the neutralization of such ship canal, the following Rules, substantially as embodied in the Convention of CV)nstantinople, signed the 28th [29th] October, 1888,- for the free naviga- tion of the Suez Canal, that is to say : 1. The canal shall be free and open to the vessels of commerce and of war of all nations observing these Rules, on terms of entire equality, so that there shall be no discrimination against any such nation, or its citizens or subjects, in respect of the conditions or charges of traffic, or otherwise. Such conditions and charged of traffic shall be just and equitable. ITS 122. ante, p. lOH. ~ For text, see British and Foreign State Papers, vol, 79, p. 18. (17) 18 2. The canal shall never be blockaded, nor shall any right of war be exercised nor any act of hostility be committed within it. The United States, however, shall be at liberty to maintain such military police along the canal as may be necessary to protect it against lawlessness and disorder. 3. Vessels of war of a belligerent shall not revictual nor take any stores in the canal except so far as may be strictly necessary ; and the transit of such vessels through the canal shall be effected with the least possible delay in ac- cordance with the Regulations in force, and with only such intermission as may result from the necessities of the service. Prizes shall be in all respects subject to the same Rules as vessels of war of the belligerents. 4. No belligerent shall embark or disembark troops, munitions of war, or warlike materials in the canal, except in case of accidental hindrance of the transit, and in such case the transit shall be resumed with all possible dispatcli. 5. The provisions of this Article shall apply to waters adjacent to the canal, within 3 marine miles of either end. Vessels of war of a belligerent shall not remain in such waters longer than twenty-four hours at any one time, except in case of distress, and in such case shall depart as soon as possible ; but a vessel of war of one belligerent shall not depart within twenty-four hours from the departure of a vessel of war of the other belligerent. G. The plant, establishments, buildings, and all works necessary to the con- struction, maintenance, and operation of the canal shall be deemed to be part thereof, for the purposes of this Treaty, and in time of war, as in time of peace, shall enjoy complete immunity from attack or injury by belligerents, and from acts calculated to impair their usefulness as part of the canal. Article IV It is agreed that no change of territorial sovereignty or of the international relations of the country or countries traversed by the before-mentioned canal shall affect the general principle of neutralization or the obligation of the Higli Contracting Parties under the present Treaty. Article V The present Treaty shall be ratified by the President of the United States, by and with the advice and consent of the Senate thereof, and by His Britannic ]Majesty ; and the ratifications shall be exchanged at Washington or at London at the earliest possible time within six months from the date hereof. In faith whereof the respective Plenipotentiaries have signed this Treaty and thereunto afl3xed their seals. Done in duplicate at Washington, the 18th day of November, in the year of Our Lord one thousand nine hundred and one. [SEAL] John Hay [seal] Pauncefote. THE SPOONER ACT ^ AN ACT To provide for the construction of a canal connecting the ivaters of the Atlantic and Pacific oceans. Be it enacted hy the Senate and House of Representatives of the United States of America in Congress assemhled, That the President of the United States is hereby authorized to acquire, for and on behalf of the United States, at a cost not exceeding forty millions of dollars, the rights, privileges, franchises, concessions, grants of land, right of way, unfinished work, plants, and other property, real, personal, and mixed, of every name and nature, owned by the New Panama Canal Company, of France, on the Isthmus of Panama, and all its maps, plans, drawings, records on the Isthmus of Panama and in Paris, including all the capital stock, not less, however, than sixty-eight thousand eight hundred and sixty-three shares of the Panama Railroad Company, owned by or held for the use of said canal com- pany, provided a satisfactory title to all of said property can be obtained. Sec. 2. That the President is hereby authorized to acquire from the Republic of Colombia, for and on behalf of the United States, upon such terms as he may deem reasonable, perpetual control of a strip of land, the territory of the Republic of Colombia, not less than six miles in width, extending from the Caribbean Sea to the Pacific Ocean, and the right to use and dispose of the waters thereon, and to excavate, construct, and to perpetually maintain, operate, and protect thereon a canal, of such depth and capacity as will afford convenient passage of ships of the greatest tonnage and draft now in use, from the Caribbean Sea to the Pacific Ocean, which control shall include the right to perpetually maintain and operate the Panama Railroad, if the ownership thereof, or a controlling interest therein, shall have been acquired by the United States, and also jurisdiction over said strip and the ports at the ends thereof to make such police and sanitary rules and regu- lations as shall be necessary to preserve order and preserve the public health thereon, and to establish such judicial tribunals as may be agreed upon thereon as may be necessary to enforce such rules and regulations. The President may acquire such additional territory and rights from Golombia as in his judgment will facilitate the general purpose hereof. Sec. 3. That when the President shall have arranged to secure a satisfactory title to the property of the New Panama Canal Company, as provided in section one hereof, and shall have obtained by treaty control of the necessary territory from the Republic of Colombia, as provided in section two hereof, he is authorized to pay for the property of the New Panama Canal Company forty millions of dollars and to the Republic of Colombia such sum as shall have been agreed upon, and a sum suflacient for both said purposes is hereby appropriated, out of any money in the Treasury not otherwise appropriated, to be paid on warrant or warrants drawn by the President. The President shall then through the Isthmian Canal Commission hereinafter authorized cause to be excavated, constructed, and completed, utilizing to that end as far as practicable the work heretofore done by the New Panama Canal Company, of France, and its predecessor company, a ship canal from the Carib- bean Sea to the Pacific Ocean. Such canal shall be of sufficient capacity and depth as shall afford convenient passage for vessels of the largest tonnage and greatest draft now in use, and such as may be reasonably anticipated, and shall be supplied with all necessary locks and other appliances to meet the necessities of vessels passing through the same from ocean to ocean; and he shall also cause to be constructed such safe and commodious harbors at the termini of said canal, and make such provisions for defense as may be necessary for the safety and protection of said canal and harbors. That the President is authorized for the purposes aforesaid to employ such persons as he may deem necessary, and to fix their compensation. Sec. 4. That should the President be unable to obtain for the United States a satisfactor y title to the property of the New Panama Canal Company and 1 United States Statutes at Large, Vol. XXXII, Pt. I, Chap. 1302. (19) 20 the control of the necessary territory of the Republic of Colombia and the rights mentioned in sections one and two of this Act, within a reasonable time and upon reasonable terms, then the President, having first obtained for the United States perpetual control by treaty of the necessary territory from Costa Rica and Nicaragua, upon terms which he may consider reasonable, for the con- struction, perpetual maintenance, operation, and protection of a canal connect- ing the Caribbean Sea with the Pacific Ocean by what is commonly known as the Nicaragua route, shall through the said Isthmian Canal Commission cause to be excavated and constructed a ship canal and waterway from a point on the shore of the Caribbean Sea near Greytown, by way of Lake Nicaragua, to a point near Brito on the Pacific Ocean. Said canal shall be of sufiicient capacity and depth to afford convenient passage for vessels of the largest tonnage and greatest draft now in use, and such as may be reasonably anticipated, and shall be supplied with all necessary locks and other appliances to meet the necessities of vessels passing through the same from ocean to ocean: and he shall also construct such safe and commodious harbors at the termini of said canal as shall be necessary for the safe and convenient use thereof, and shall make such provisions for defense as may be necessary for the safety and protection of said harbors and canal; and such sum or sums of money as may be agreed upon by such treaty as compensation to be paid to Nicaragua and Costa Rica for the concessions and rights hereunder provided to be acquired by the United States, are hereby appropriated, out of any money in the Treasury not otherwise appro- priated, to be paid on warrant or warrants drawn by the President. The President shall cause the said Isthmian Canal Commission to make such surveys as may be necessary for said canal and harbors to be made, and in making such surveys and in the construction of said canal may employ such i:>ersons as he may deem necessary, and may fix their compensation. In the excavation and construction of said canal the San Juan River and Lake Nicaragua, or such parts of each as may be made available, shall be used. Sec. 5. That the sum of ten million dollars is hereby appropriated, out of any money in the Treasury not otherwise appropriated, toward the project herein contemplated by either route so selected. And the President is hereby authorized to cause to be entered into such con- tract or contracts as may be deemed necessary for the proper excavation, con- struction, completion, and defense of said canal, harbors, and defenses, by the route finally determined upon under the provisions of this Act. Appropriations therefor shall from time to time be hereafter made, not to exceed in the aggre- gate the additional sum of one hundred and thirty-five millions of dollars should the Panama route be adopted, or one hundred and eighty millions of dollars should the Nicaragua route be adopted. Sec. 6. That in any agreement with the Republic of Colombia, or with tlie States of Nicaragua and Costa Rica, the President is authorized to guarantee to said Republic or to said States the use of said canal and harbors, upon such terms as may be agreed upon, for all vessels owned by said States or by citizens thereof. Sec. 7. That to enable the President to construct the canal and works appur- tenant thereto as provided in this Act, there is hereby created the Isthmian Canal Commission, the same to be composed of seven members, who shall be nominated and appointed by the President, by and with the advice and consent of the Senate, and who shall serve until the completion of said canal unless sooner removed by the President, and one of whom shall be named as the chair- man of said Commission. Of the seven members of said Commission at least four of them shall be persons learned and skilled in the science of engineerijig. and of the four at least one shall be an officer of the United States Army, and at least one other shall be an officer of the United States Navy, the said officers respectively being either upon the active or retired list of the Army or of the Navy. Said commissioners shall each receive such compensation as the President shall prescribe until the same shall have been otherwise fixed by the Congress. In addition to the members of said Isthmian Canal Commission, tlie President is hereby authorized througli said Commission to employ in said service any of the engineers of tlie I'^nitod States Army at his discretion, and likewise to em- ploy any engineers in civil life, at his discretion, and any other persons necessary for the proper and expeditious prosecution of said work. The compensation of all such engineers and other persons employed under this Act shall be fixed by said Commission, subject to the approval of the President. The official salary of any officer appointed or employed under this Act shall be deducted from the 21 amount of salary or compeiisatiou provided by or which shall be fixed under the terms of this Act. Said Commission shall in all matters be subject to the direction and control of the President, and shall make to the President annually and at such other periods as may be required, either by law or by the order of the President, full and complete reports of all their actings and doings and of all moneys received and expended in the construction of said work and in the performance of their duties in connection therewith, which said reports shall be by the President transmitted to Congress. And the said Commission shall furthermore give to Congress, or either House of Congi-ess, such iaiformation as may at any time be required either by Act of Congress or by the order of either House of Congress. The President shall cause to be provided and assigned for the use of the Commission such offices as may, with the suitable equipment of the same, be necessary and proper, in his discretion, for the proper discharge of the duties thereof. Sec. 8. That the Secretary of the Treasury is hereby authorized to borrow on the credit of the United States from time to time, as the proceeds may be required to defraj' expenditures authorized by this Act (such proceeds when received to be used only for the purj^ose of meeting such expenditures), the sum of one hundred and thirty million dollars, or so much thereof as may be neces- sary, and to prepare and issue therefor coupon or registered bonds of the United States in such form as he may prescribe, and in denominations of twenty dollars or some multiple of that sum, redeemable in gold coin at the pleasure of the United States after ten years from the date of their issue, and payable thirty years from such date, and bearing interest payable quarterly in gold coin at the rate of two per centum per annum ; and the bonds herein authorized shall be exempt from all taxes or duties of the United States, as well as from taxation in any form by or under State, municipal, or local authority: Provided, That said bonds may be disposed of by the Secretary of the Treasury at not less than par, under such regulations as he may prescribe, giving to all citizens of the United States an equal opportunity to subscribe therefor, but no commissions shall be allowed or i)aid thereon ; and a sum not exceeding one-tenth of one per centum of the amount of the bonds herein authorized is hereby appropriated, out of any money in the Treasury not othenvise appropriated, to pay the expense of preparing, advertising, and issuing the same. Approved, June 28, 1902. [Senate, Executive K, Fifty-seventh Congress, second session] TREATY WITH COLOMBIA— HAY-HERRAN Message feom the President of the United States TRANSMITTING A CONVENTION BETWEEN THE UNITED STATES AND THE REPUBLIC OF COLOMBIA FOR THE CONSTRUCTION OF A SHIP CANAL, ETC., TO CONNECT THE WATERS OF THE ATLANTIC AND PACIFIC OCEANS, SIGNED JANUARY 22, 1903 January 23, 1903. — Read ; convention read the first time and referred to the Committee on Foreign Relations, and, together with the message, ordered to be printed in confidence for the use of the Senate. January 24, 1903. — Injunction of secrecy removed. March 5, 1903. — Again referred to the Committee on Foreign Relations. March 9. 1903. — Reported Mithout amendment. March 17, 1903. — Senate advises and consents to ratification. To the Senate: I transmit herewith, with a view to receiving the advice and consent of the Senate to its ratification, a convention between the United States of America and the Republic of Colombia for the construction of a ship canal, etc., to connect the waters of the Atlantic and Pacific oceans, signed at Washington on Janu- iiry 22, 1903. Theodore Roosevelt. White House, January 23, 1903. The President : The undersigned. Secretary of State, has the honor to lay before the President for his consideration a convention between the United States of America and the Republic of Colombia for the construction of a ship canal, etc., to connect the waters of the Atlantic and Pacific oceans, signed by the respective plenipoten- tiaries of the two Governments on January 22, 1903. John Hay. Department of State, Washington, January 23, 1903. The United States of America and the Republic of Colombia, being desirous to assure the construction of a ship canal to connect the Atlantic and Pacific Oceans and the Congress of the United States of America having passed an Act approved June 28, 1902, in furtherance of that object, a copy of which is here- unto annexed, the high contracting parties have resolved, for that purpose, to conclude a Convention and have accordingly appointed as their plenipotentiaries. The President of the United States of America, John Hay, Secretary of State, and The President of the Republic of Colombia, Thomas Herran, Charge d'Affaires, thereunto specially empowered by said government, who, after communicating to each other their respective full powers, found in good and due form, have •agreed upon and concluded the following Articles : 123) 90-592— 7S 3 24 Akticle I The GoTernment of Colombia authorizes the New Panama Canal Company to sell and transfer to the United States its rights privileges, properties, and conce^jsions, as well as the Panama Railroad and all the shares or part of the shares of that company : but the public lands situated outside of the zone here- inafter specified, now corresponding to the concessions to both said enterprises shall revert to the Republic of Colombia, except any property now owned by or in the possession of the said companies within Panama or Colon, or the ports and terminals thereof. But it is understood that Colombia reserves all its rights to the special shares in the capital of the New Panama Canal Company to which reference is made in Article IV of the contract of December 10, 1S90, which shares shall be paid their full nominal value at least; but as such right of Colombia exists solely in its character of stockholder in said Company, no obligation under this pro- vision is imposed upon or assumed by the United States. The Railroad Company (and the United States as owner of the enterprise) shall be free from the obligations imposed by the railroad concession, excepting as to the payment at maturity by the Railroad Company of the outstanding bonds issued by said Railroad Company. Article II The United States shall have the exclusive right for the term of one hundred years, renewable at the sole and absolute option of the United States, for periods of similar duration so long as the United States may desire, to excavate, con- struct, maintain, operate, control, and protect the Maritime Canal with or without locks from the Atlantic to the Pacific Ocean, to and across the territory of Colombia, such canal to be of sufficient depth and capacity for vessels of the largest tonnage and greatest draft now engaged in commerce, and such as may be reasonably anticipated, and also the same rights for the construction, main- tenance, operation, control, and protection of the Panama Railroad and of rail- way, telegraph and telephone lines, canals, dikes, dams, and reservoirs, and such other auxiliary works as may be necessary and convenient for the construction^ maintenance, protection, and operation of the canal and railroads. Aeticle III To enable the United States to exercise the rights and privileges granted by this Treaty the Republic of Colombia grants to that Government the use and control for the term of one hundred years, renewable at the sole and absolute option of the United States, for periods of similar duration so long as the United States may desire, of a zone of territory along the route of the canal to be con- structed five kilometers in width on either side thereof measured from its center line including therein the necessary auxiliary canals not exceeding in any case fifteen miles from the main canal and other works, together with ten fathoms of water in the Bay of Limon in extension of the canal, and at least three marine miles from mean low water mark from each terminus of the canal into the Caribbean Sea and the Pacific Ocean respectively. So far as necessary for the construction, maintenance and operation of the canal, the United States shall h.ave the use and occupation of the group of small islands in the Bay of Panama named Perico. Xaos, Culebra and Flamenco, but the same shall not be construed as being within the zone herein defined nor governed by the special provisions applicable to the same. This grant shall in no manner invalidate the titles or rights of private land owners in the said zone of territory, nor shall it interfere with the rights of way over the public roads of the Department ; provided, however, that nothing herein contained shall operate to diminish, impair or restrict the rights else- where herein granted to the United States. This grant shall not include the cities of Panama and Colon, except so far as lands and other property therein are now owTied by or in possession of the said Canal Company or the said Railroad Company ; but all the stipulations contained in Article 35 of the Treaty of 1846-48 between the contracting parties shall con- tinue and apply in full force to the cities of Panama and Colon and to the accessory community lands and other property within the said zone, and the territory thereon shall be neutral territory, and the United States shall continue to guarantee the neutrality thereof and the sovereignty of Colombia thereover^ in conformity with the above-mentioned Article 35 of said Treaty. 25 In furtherance of this last provision there shall be created a Joint Commission by the Governments of Colombia and the United States that shall establish and enforce sanitary and police regulations. Article IV The rights and privileges granted to the United States by the terms of this convention shuli not affect the sovereignty of the Republic of Colombia over the territory within whose boundaries such rights and privileges are to be exercised. The United States freely acknowledges and recognizes this sovereignty and disavows any intention to impair it in any way whatever or to increase its territory at the expense of Colombia or of any of the sister republics in Central or South America, but on the contrary, it desires to strengthen the power of the republics on this continent, and to promote, develop and maintain their prosper- ity and independence. Article V The Republic of Colombia authorizes the United States to construct and maintain at each entrance and terminus of the proposed canal a port of vessels using the same, with suitable light houses and other aids to navigation, and the United States is authorized to use and occupy within the limits of the zone fixed by this convention, such parts of the coast line and of the lands and islands aaiaceiit thereto as are necessary for this purpose, including the construction and maintenance of breakwaters, dikes, jetties, embankments, coaling stations, docks and other appropriate works, and the United States undertakes the con- struction and maintenance of such works and will bear all the expenses thereof. The ports when established are declared free, and their demarcations shall be clearly and definitely defined. To give effect to this Article, the United States will give special attention and care to the maintenance of works for drainage, sanitary and healthful purposes along the line of the canal, and its dependencies, in order to prevent the invasion of epidemics or of securing their prompt suppression should they appear. With this end in view the United States will organize hospitals along the line of the canal, and will suitably supply or cause to be supplied the towns of Panama and Colon with the necessary aqueducts and drainage works, in order to prevent their becoming centers of infection on account of their proximity to the canal. The Government of Colombia will secure for the United States or its nominees the lands and rights that may be required in the towns of Panama and Colon to effect the improvements above referred to, and the Government of the United States or its nominees shall be authorized to impose and collect equitable water rates, during fifty years for the service rendered ; but on the expiration of said term the use of the water shall be free for the inliabitants of Panama and Colon, except to the extent that may be necessary for the operation and maintenance of said water system, including reservoirs, aqueducts, hydrants, supply service, drainage and other works. Article VI The Republic of Colombia agrees that it will not cede or lease to any foreign Government any of its islands or harbors within or adjacent to the Bay of Panama, nor on the Atlantic Coast of Colombia, between the Atrato River and the western boundary of the Department of Panama, for the purpose of estab- lishing fortifications, naval or coaling stations, military posts, docks or other works that might interfere with the construction, maintenance, operation, pro- tection, safety, and free use of the canal and auxiliary works. In order to enable Colombia to comply with this stipulation, the Government of the United States agrees to give Colombia the material support that may be required in order to prevent the occupation of said islands and ports, guaranteeing there the sov- ereignty, independence and integrity of Colombia. Article VII The Republic of Colombia includes in the foregoing grant the right without obstacle, cost, or impediment, to such control, consumption and general utiliza- tion in any manner found necessary by the United States to the exercise by it of the grants to, and rights conferred upon it by this Treaty, the waters of the Chagres River and other streams, lakes and lagoons, of all non-navigable waters, 26 natural and artificial, and also to navigate all rivers, streams, lakes and other navigable water-ways, within the jurisdiction and under the dominion of the Kepublic of Colombia, in the Department of Panama, within or without said zone, as may be necessary or desirable for the construction, maintenance and operation of the canal and its auxiliary canals and other works, and without tolls or charges of any kind ; and to raise and lower the levels of the waters, and to deflect them, and to impound any such waters and to overflow any lands necessary for the due exercise of such grants and rights to the United States ; and to rectify, construct and improve the navigation of any such rivers, streams, lakes and lagoons at the sole cost of the United States ; but any such waterways so made by the United States may be used by citizens of Colombia free of tolls or other charges. And the United States shall have the right to use without cost, any water, stone, clay, earth or other minerals belonging to Colombia on the public domain that may be needed by it. All damages caused to private land owners by inundation or by the deviation of water courses, or in other ways, arising out of the construction or operation of the canal, shall in each case be appraised and settled by a joint commission ap- pointed by the Governments of the United States and Colombia, but the cost of the indemnities so agreed upon shall be borne solely by the United States. Article YIII The Government of Colombia declares free for all time the ports at either entrance of the Canal, including Panama and Colon and the waters tliereof in such manner that there shall not be collected by the Government of Colombia custom house tolls, tonnage, anchorage, light-house, wharf, pilot, or quarantine dues, nor any other charges or taxes of any kind shall be levied or imposed by the Government of Colombia upon any vessel using or passing through the Canal or belonging to or employed by the United States, directly or indirectly, in connection with the construction, maintenance and operation of the main work or its auxiliaries, or upon the cargo, officers, crew, or j)assengers of any such vessels : it being the intent of this convention that all vessels and their cargoes, crews, and passengers, shall be permitted to use and pass through the Canal and the ports leading thereto, subject to no other demands or impositions than such tolls and charges as may be imposed by the United States for the use of the Canal and other works. It being understood that such tolls and charges shall be governed by the provisions of Article XVI. The ports leading to the Canal, Including Panama and Colon, also shall be free to the commerce of the world, and no duties or taxes shall be imposed, except upon merchandise destined to be introduced for the consumption of the rest of the Republic of Colombia, or the Department of Panama, and upon vessels touch- ing at the ports of Colon and Panama and which do not cross the Canal. Though the said ports shall be free and open to all, the Government of Colom- bia may establish in them such custom houses and guards as Colombia may deem necessary to collect duties on Importations destined to other portions of Colombia and to prevent contraband trade. The United States shall have the right to make use of the ports at the two extremities of the Canal including Panama and Colon as places of anchorage, in order to make repairs for loading, unloading, depositing or transshipping cargoes either in transit or destined for the service of the Canal and other works. Any concessions or privileges granted by Colombia for the operation of light houses at Colon and Panama shall be subject to expropriation, indemnification and payment in the same manner as provided by Article XIV in respect to the property therein mentioned ; but Colombia shall make no additional grant of any such privilege nor change the status of any existing concession. Article IX There shall not l)e imposed any taxes, national, municipal, departmental, or of any other class, upon the canal, the vessels that may use it, tugs and other vessels employed in the service of the canal, the railways and auxiliarv works, store houses, work shops, ofl^ces, quarters for laborers, factories of all kinds, warehouses, wharves, machinery and other works, property and effects apper- taining to the canal or railroad or that may be necessary for the service of the canal or railroad and their dependencies whether situated within the cities of Panama and Colon, or any other place authorized by the provisions of this convention. 27 Nor shall there be imposed contributions or charges of a personal character of whatever species upon officers, employees, laborers, and other individuals m the service of the canal and its dependencies. Article X It is agreed that telegraph and telephone lines, when established for canal purposes, may also, under suitable regulations, be used for public and private business in connection with the systems of Colombia and the other American Republics and with the lines of cable companies authorized to enter the ports and territories of these Republics ; but the official dispatches of the Government of Colombia and the authorities of the Department of Panama shall not pay for such service higher tolls than those required from the officials in the service of the United States. Article XI The Government of Colombia shall permit the immigration and free access to the lands and workshops of the canal and its dependencies of all employees and workmen of whatever nationality under contract to work upon or seeking employment or in any wise connected with the said canal and its dependencies, with their respective families, and all such persons shall be free and exempt from the military service of the Republic of Colombia. Article XII Tlie United States may import at any time into the said zone, free of customs duties, imposts, taxes, or other charges, and without any restriction, any and all vessels, dredges, engines, cars, machinery, tools, explosives, materials, supplies, and other articles necessary and convenient in the construction, maintenance and operation of the canal and auxiliary works, also all provisions, medicines, cloth- ing, supplies and other things necessary and convenient for the officers, employees, workmen and laborers in the service and employ of the United States and for their families. If any such articles are disposed of for use without the zone excepting Panama and Colon and within the territory of the Republic, they shall be subject to the same import or other duties as like articles under the laws of Colombia or the ordinances of the Department of Panama. Article XIII The United States shall have authority to protect and make secure the canal, as w^ell as railways and other auxiliary works and dependencies, and to preserve order and discipline among the laborers and other persons who may congregate in that region and to make and enforce such police and sanitary regulations as it may deem necessary to preserve order and public health thereon, and to protect navigation and commerce through and over said canal, railways and other works and dependencies from interruption or damage. I. The Republic of Colombia may establish judicial tribunals within said zone, for the determination, according to its laws and judicial procedure, of certain controversies hereinafter mentioned. Such judicial tribunal or tribunals so established by the Republic of Colombia shall have exclusive jurisdiction in said zone of all controversies between citizens of the Republic of Colombia, or between citizens of the Republic of Colombia and citizens of any foreign nation other than the United States. II. Subject to the general sovereignty of Colombia over said zone, the United States may establish judicial tribunals thereon, which shall have jurisdiction of certain controversies hereinafter mentioned to be determined according to the laws and judicial procedure of the United States. Such judicial tribunal or tribunals so established by the United States .shall have exclusive jurisdiction in said zone of all controversies between citizens of the United States, and between citizens of the United States and citzens of any foreign nation other than the Republic of Colombia : and of all controversies in any wise growing out of or relating to the construction, maintenance or operation of the canal, railway and other properties and works. III. The United States and Colombia engage jointly to establish and maintain upon said zone, judicial tribunals having civil, criminal and admiralty juris- diction and to be composed of jurists appointed by the Govermnents of the United States and Colombia in a manner hereafter to be agreed upon between 28 said Goyernments, and which tribunals shall have jurisdiction of certain con- troversies hereinafter mentioned, and of all crimes, felonies and misdemeanors committed within said zone, and of all cases arising in admiralty, according to such laws and procedure as shall be hereafter agreed upon and declared by the two governments. Such joint judicial tribunal shall have exclusive jurisdiction in said zone of all controversies between citizens of the United States and citizens of Colombia, and between citizens of nations other than Colombia or the United States ; and also of all crimes, felonies and misdemeanors committed within said zone, and of all questions and admiralty arising therein. IV. The two Governments hereafter, and from time to time as occasion arises, shall agree upon and establish the laws and procedures which shall govern such joint judicial tribunal and which shall be applicable to the persons and cases over which such tribunal shall have jurisdiction, and also shall likewise create the requisite officers and employees of such court and establish their powers and duties; and further shall make adequate provision by like agreement for the pursuit, capture, imprisonment, detention and delivery within said zone of persons charged with the commitment of crimes, felonies or misdemeanors without said zone; and for the pursuit, capture, imprisonment, detention and delivery without said zone of persons charged with the commitment of crimes, felonies and misdemeanors within said zone. Article XIV The works of the canal, the railways and their auxiliaries are declared of public utility, and in consequence all areas of land and water necessary for the construction, maintenance, and operation of the canal and the other si)ecified works may be expropriated in conformity w^ith the laws of Colombia, except that the indemnity .shall be conclusively determined without appeal, by a joint commission appointed by the Governments of Colombia and the United States. The indemnities awarded by the Commission for such expropriation shall be borne by the United States, but the appraisal of said lands and the assessment of damages shall be based upon their value before the commencement of the work upon the canal. Article XV The Republic of Colombia grants to the United States the use of all the ports of the Republic open to commerce as places of refuge for any vessels employed in the canal enterprise, and for all vessels in distress having the right to pass through the canal and wishing to anchor in said ports. Such vessels shall be exempt from anchorage and tonnage dues on the part of Colombia. Article XVI The canal, when constructed, and the entrance thereto shall be neutral in perpetuity, and shall be opened upon the terms provided for by Section I of Article three of, and in conformity with all the stipulations of, the treaty entered into by the Governments of the United States and Great Britain on November 18, 1901. Article XVII The Government of Colombia shall have the right to transport over the cnnal its vessels, troops, and munitions of war at all times without paying charges of any kind. This exemption is to be extended to the auxiliary railway for the transportation of persons in the service of the Republic of Colombia or of the Department of Panama, or of the police force charged with the preservation of public order outside of said zone, as well as to their baggage, munitions of war and supplies. Article XVIII The United States shall have full power and authority to establish and enforce regulations for the use of the canal, railways, and the entering ports and auxiliary works, and to fix rates of tolls and charges thereof, subject to the limitations stated in Artivle XVI. Article XIX The rights and privileges granted to the United States by this convention shall not affect the sovereignty of the Republic of Colombia over the real estate that 29 may be acquired by the United States by reason of the transfer of the rights of the New Panama Canal Company and the Panama Eailroad Company lying outside of the said canal zone. Article XX If by virtue of any existing treaty between the Republic of Colombia and any third power, there may be any privilege or concession relative to an interoceanic means of communication which especially favors such third power, and which in any of its terms may be incompatible with the terms of the present conven- tion, the Republic of Colombia agrees to cancel or modify such treaty in due form, for which purpose it shall give to the said third power the requisite notification within the term of four months from the date of the present convention, and in case the existing treaty contains no clause permitting its modification or annul- ment, the Republic of Colombia agrees to procure its modification or annulment in such form that there shall not exist any conflict with the stipulations of the present convention. Article XXI The rights and privileges granted by the Republic of Colombia to the United States in the preceding Articles are understood to be free of all anterior con- cessions or privileges to other Governments, corporations, syndicates or individ- uals, and consequently, if there should arise any claims on account of the present concessions and privileges or otherwise, the claimants shall resort to the Govern- ment of Colombia and not to the United States for any indemnity or com.promise which may be required. Article XXII The Republic of Colombia renounces and grants to the United States the participation to which it might be entitled in the future earnings of the canal under Article XV of the concessionary contract with Lucien N. B, Wyse now owned by the New Panama Canal Company and any and all other rights or claims of a pecuniary nature arising under or relating to said concession, or arising under or relating to the concessions to the Panama Railroad Company of any extension or modification thereof ; and it likewise renounces, confirms and grants to the United States, now and hereafter, all the rights and property reserved in the said concessions which otherwise would belong to Colombia at or before the expiration of the terms of ninety-nine years of the concessions granted to or held by the above mentioned party and companies, and all right, title and interest which it now has or may hereafter have, in and to the lands, canal, works, property and rights held by the said companies under said concessions or other- wise, and acquired or to be acquired by the United States from or through the New Panama Canal Company, including any property and rights which might or may in the future either by lapse of time, forfeiture or otherwise, revert to the Republic of Colombia under any contracts of concessions, with said Wyse, the Universal Panama Canal Company, the Panama Railroad Company and the New Panama Canal Company. The aforesaid rights and property shall be and are free and released from any present or reversionary interest in or claims of Colombia and the title of the United States thereto upon consummation of the contemplated purchase by the United States from the New Panama Canal Company, shall be absolute, so far as concerns the Republic of Colombia, excepting always the rights of Colombia specifically secured under this treaty. Article XXIII If it should become necessary at any time to employ armed forces for the safety or protection of the canal, or of the ships that make use of the same, or the rail- ways and other works, the Republic of Colombia agrees to provide the forces necessary for such purpose, according to the circumstances of the case, but if the Government of Colombia cannot effectively comply with this obligation, then, with the consent of or at the request of Colombia, or of her Minister at Washing- ton, or of the local authorities, civil or military, the United States shall employ such force as may be necessary for that sole purpose ; and as soon as the necessity shall have ceased will withdraw the forces so employed. Under exceptional cir- cumstances, however, on account of unforeseen or imminent danger to said canal, railways and other works, or to the lives and property of the persons employed upon the canal, railways, and other works, the Government of the United States is authorized to act in the interest of their protection, without the necessity of 30 obtaining the consent beforehand of the Government of Colombia ; and it shall give immediate advice to the measures adopted for the purpose stated ; and as soon as suflBcient Colombian forces shall arrive to attend to the indicated purpose,, those of the United States shall retire. Abticle XXIV The Government of the United States agrees to complete the construction of the preliminary works necessary, together with all the auxiliary works, in the short- est time possible ; and within two years from the date of the exchange of ratifica- tion of this convention the main works of the canal proper shall be commenced, and it shall be opened to the traflfic between the two oceans within twelve years after such period of two years. In case, however, that any diflSculties or obstacles should arise in the construction of the canal which are at present impossible to foresee, in consideration of the good faith with which the Government of the United States shall have proceeded, and the large amount of money expended so far on the works and the nature of the diflSculties which may have arisen, the Government of Colombia will prolong the terms stipulated in this Article up to twelve years more for the completion of the work of the canal. But in case the United States should, at any time, determine to make such canal practically a sea level canal, then such period shall be extended for ten years further. Article XXV As the price or compensation for the right to use the zone granted in this con- vention by Colombia to the United States for the construction of a canal, together with the proprietary right over the Panama Railroad, and for the annuity of two hundred and fifty thousand dollars gold, which Colombia ceases to receive from the said railroad, as well as in compensation for other rights, privileges and exemptions granted to the United States, and in consideration of the increase in the administrative expenses of the Department of Panama consequent upon the construction of the said canal, the Government of the United States binds it- self to pay Colombia the sum of ten million dollars in gold coin of the United States on the exchange of the ratification of this convention after its approval according to the laws of the respective countries, and also an annual payment during the life of this convention of two hundred and fifty thousand dollars in like gold coin, beginning nine years after the date aforesaid. The provisions of this Article shall be in addition to all other benefits assured to Colombia under this convention. But no delay nor difference of opinion under this Article shall affect nor in- terrupt the full operation and effect of this convention in all other respects : Article XXVI No change Wther in the Government or in the laws and treaties of Colombia, shall, without the consent of the United States, affect any right of the United States under the present convention, or under any treaty stipulation between the two countries (that now exist or may hereafter exist) touching the subject- matter of this convention. If Colombia shall hereafter enter as a constituent into any other Government or into any union or confederation of States so as to merge her sovereignty or independence in such Government, union, or confederation, the rights of the United States under this convention shall not be in any respect lessened or impaired. Article XXVII The joint commission referred to in Article III, VII and XIV shall be estab- lished as follows : The President of the United States shall nominate two persons and the Presi- dent of Colombia shall nominate two persons and they shall proceed to a deci- sion ; but in case of disagreement of the Commission (by reason of their being equally divided in conclusion) an umpire shall be appointed by the two Govern- ments, who shall render the decision. In the event of death, absence or incapacity of any Commissioner or umpire, or his omitting, declining or ceasing to act, his place shall be filled by the appointment of another person in the manner above indicated. All decisions by a majority of the Commission or by the umpire shall be final. 31 Aeticle XXVIII This convention when signed by the contracting parties, shall be ratified ac- cording to the laws of the respective countries and shall be exchanged at Wash- ington within a term of eight months from this date, or earlier if possible. In faith whereof, the respective plenipotentiaries have signed the present con- vention in duplicate and have hereunto afiixed their respective seals. Done at the City of Washington, the 22d day of January in the year of our Lord nineteen hundred and three. [seal,] [SEAL.] John Hay. ToMAS Heeean. PANAMA— ISTHMIAN CANAL Convention signed at Washington November 18, 1903. Ratified l)y Panama Decemler 2, 1903. Senate advice and consent to ratification Fe'bruary 23, 190Jf. Ratified by the President of the United States Fehruary 25, 1904- Ratifications exchanged at Washington February 26, 1904. Entered into force Fe'bruary 26, 1904. Proclaimed by the President of the United States February 26, 1904. Amended by treaties of March 2, 1936,^ and January 25, 1955 33 Stat. 2234 ; Treaty Series 431 IsTHMiAX Canal Convention The United States of America and the Republic of Panama being desirous to insure the construction of a ship canal across the Isthmus of Panama to connect the Atlantic and Pacific oceans, and the Congress of the United States of America having passed an act approved June 28, 1902, in furtherance of that object, by which the President of the United States is authorized to acquire within a reason- able time the control of the necessary territory of the Republic of Colombia, and the sovereignty of such territory being actually vested in the Republic of Panama, the high contracting parties have resolved for that purpose to conclude a conven- tion and have accordingly appointed as their plenipotentiaries, — The President of the United States of America, John Hay, Secretary of State, and The Government of the Republic of Panama, Philippe BunauVaeilla, Envoy Extraordinary and Minister Plenipotentiary of the Republic of Panama, there- unto specially empowered by said government, who after communicating with each other their respective full powers, found to be in good and due form, have agreed upon and concluded the following articles : Article I ^ The United States guarantees and will maintain the independence of the Repub- lic of Panama. Article II * The Republic of Panama grants to the United States in perpetuity the use, occupation and control of a zone of land and land under water for the construc- tion, maintenance, operation, sanitation and protection of said Canal of the width of ten miles extending to the distance of five miles on each side of the center line of the route of the Canal to be constructed: the said zone beginning in the Caribbean Sea three marine miles from mean low water mark and extending to and across the Isthmus of Panama into the Pacific ocean to a distance of three marine miles from mean low water mark with the proviso that the cities of Panama and Colon and the harbors adjacent to said cities, which are included within the boundaries of the zone above described, shall not be included within this grant. The Republic of Panama further grants to the United States in per- petuity the use, occupation and control of any other lands and waters outside of the zone above described which may be necessary and convenient for the con- struction, maintenance, operation, sanitation and protection of the said Canal or of any auxiliary canals or other works necessary and convenient for the construc- tion, maintenance, operation, sanitation and protection of the said enterprise. The Republic of Panama further grants in like manner to the United States in perpetuity all islands within the limits of the zone above described and in addi- 1 TS 945. pnst, p. 742. a 6 UST 2273 ; TIAS 3297. 3 Art. I superseded bv art. I of treaty of Mar. 2. 1936 (TS 945, post, p. 743). * Art. II modified by art. II of treaty of Mar. 2, 1936. (33) 34 tion thereto the grroiip of small islands in the Bay of Panama, named Perico, Xaos, Culebra and Flamenco. Article III The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said Article II which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of Panama of any such sov- ereign rights, power or authority. Article IV As rights subsidiary to the above grants the Republic of Panama grants in perpetuity to the United States the right to use the rivers, streams, lakes and other bodies of water within its limits for navigation, the supply of water or water- power or other purposes, so far as the use of said rivers, streams, lakes and bodies of water and the waters thereof may be necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal. Article The Republic of Panama grants to the United States in perpetuity a monopoly for the construction, maintenance and operation of any system of communication by means of canal or railroad across its territory between the Caribbean Sea and the Pacific ocean. Article VI The grants herein contained shall in no manner invalidate the titles or rights of private land holders or owners of private property in the said zone or in or to any of the lands or waters granted to the United States by the provisions of any Article of this treaty, nor shall they interfere with the rights of way over the public roads passing through the said zone or over any of the said lands or waters unless said rights of way or private rights shall conflict with rights herein granted to the United States in which case the rights of the United States shall be superior. All damages caused to the owners of private lands or private property of any kind by reason of the grants contained in this treaty or by reason of the operations of the United States, its agents or employees, or by reason of the construction, maintenance, operation, sanitation and protection of the said Canal or of the works of sanitation and protection herein provided for, shall be appraised and settled by a joint Commission appointed by the Gov- ernments of the United States and the Republic of Panama, whose decisions a^ to such damages shall be final and whose awards as to such damages shall be paid solely by the United States. No part of the work on said Canal or the Pan- ama railroad or on any auxiliary works relating thereto and authorized by the terms of this treaty shall be prevented, delayed or impeded by or pending such proceedings to ascertain such damages. The appraisal of said private lands and private property and the assessment of damages to them shall be based upon their value before the date of this convention. Article VII' The Republic of Panama grants to the United States within the limits of the cities of Panama and Colon and their adjacent harbors and within the territory adjacent thereto the right to acquire by purchase or by the exercise of the right of eminent domain, any lands, buildings, water rights or other properties neces- sary and convenient for the construction, maintenance, operation and protection of the Canal and of any works of sanitation, such as the collection and disposition of sewage and the distribution of water in the said cities of Panama and Colon, 5 Art. V abrogated in part by art. Ill of treaty of Jan. 2o, 1955 (G UST 2273 ; TIAS .^297). « Art. VI modified by art. X of treaty of Jan. 25. 1955. First sentence of art. VII amended and third parajrraph abrogated by art. VI of treaty of Mar. 2. 19.^0 : first paragraph modified and second paragraph abrogated by arts. V and IV of treaty of Jan. 25, 1955. See also agreement of May 18, 1942 (EAS 359), post, p. 809. 35 which, in the discretion of the United States may be necessary and convenient for the construction, maintenance, operation, sanitation and protection of the said Canal and railroad. All such works of sanitation, collection and disposition of sewage and distribution of water in the cities of Panama and Colon shall be made at the expense of the United States, and the Government of the United States, its agents or nominees shall be authorized to impose and collect water rates and sewerage rates which shall be sufficient to provide for the payment of interest and the amortization of the principal of the cost of said works within a period of fifty years and upon the expiration of said term of fifty years the system of sewers and water works shall revert to and become the properties of the cities of Panama and Colon respectively, and the use of the water shall be free to the inhabitants of Panama and Colon, except to the extent that water rates may be necessary for the operation and maintenance of said system of sewers and water. The Republic of Panama agrees that the cities of Panama and Colon shall comply in perpetuity with the sanitary ordinances whether of a preventive or curative character prescribed by the United States and in case the Government of Panama is unable or fails in its duty to enforce this compliance by the cities of Panama and Colon with the sanitary ordinance of the United States the Republic of Panama grants to the United States the right and authority to en- force the same. The same right and authority are granted to the United States for the main- tenance of public order in the cities of Panama and Colon and the territories and harbors adjacent thereto in case the Republic of Panama should not be, in the judgment of the United States, able to maintain such order. Article VIII The Republic of Panama gi-ants to the United States all rights which it now has or hereafter may acquire to the property of the New Panama Canal Com- pany and the Panama Railroad Company as a result of the transfer of sovereignty from the Republic of Colombia to tiie Republic of Panama over the Isthmus of Panama and authorizes the New Panama Canal Company to sell and transfer to the United States its rights, privileges, properties and concessions as well as the Panama Railroad and all the shares or part of the shares of that company ; but the public lands situated outside of the zone described in Article II of this treaty now included in the concessions to both said enterprises and not required in the construction or operation of the Canal shall revert to the Republic of Panama except any property now owned by or in the possession of said companies within Panama or Colon or the ports or terminals thereof. Article IX ^ The United States agrees that the ports at either entrance of the Canal and the waters thereof, and the Republic of Panama agrees that the towns of Panama and Colon shall be free for all time so that there shall not be imposed or collected custom house tolls, tonnage, anchorage, lighthouse, wharf, pilot, or quarantine dues or any other charges or taxes of any kind upon any vessel using or passing through the Canal or belonging to or employed by the United States, directly or indirectly, in connection with the construction, maintenance, operation, sanita- tion and protection of the main Canal, or auxiliary works, or upon the cargo, officers, crew, or passengers of any such vessels, except such tolls and charges as may be imposed by the United States for the use of the Canal and other works, and except tolls and charges imposed by the Republic of Panama upon merchandise destined to be introduced for the consumption of the rest of the Republic of Panama, and upon vessels touching at the ports of Colon and Panama and which do not cross the Canal. The Government of the Republic of Panama shall have the right to establish in such ports and in the towns of Panama and Colon such houses and guards as it may deem necessary to collect duties on importations destined to other portions of Panama and to prevent contraband trade. The United States shall have the right to make use of the towns and harbors of Panama and Colon as places of 8 Art. IX superseded by art. V of treaty of Mar. 2, 1936. 36 anchorage, and for making repairs, for loading, unloading, depositing, or trans- shipping cargoes either in transit or destined for the service of the Canal and for other works pertaining to the Canal. Article X® The Republic of Panama agrees that there shall not be imposed any taxes, national, municipal, departmental, or of any other class, upon the Canal, the rail- ways and auxiliary works, tugs and other vessels employed in the service of the Canal, store houses, work shops, offices, quarters for laborers, factories of all kinds, warehouses, wharves, machinery and other works, property, and effects appertaining to the Canal or railroad and auxiliary works, or their officers or employees, situated within the cities of Panama and Colon, and that there shall not be imposed contributions or charges of a personal character of any kind upon officers, employees, laborers, and other individuals in the service of the Canal and railroad and auxiliary works. Article XI The United States agrees that the official dispatches of the Government of the Republic of Panama shall be transmitted over any telegraph and telephone lines established for canal purposes and used for public and private business at rates not higher than those required from officials in the service of the United States. Article XII The Government of the Republic of Panama shall permit the immigration and free access to the lands and workshops of the Canal and its auxiliary works of all ■employees and workmen of whatever nationality under contract to work upon or seeking employment upon or in any vrise connected with the said Canal and its auxiliary works, with their respective families, and all such persons shall be free and exempt from the military service of the Republic of Panama. Article XIII The United States may import at any time into the said zone and auxiliary lands, free of custom duties, imposts, taxes, or other charges, and without any restrictions, any and all vessels, dredges, engines, cars, machinery, tools, explo- sives, materials, supplies, and other articles necessary and convenient in the construction, maintenance, operation, sanitation and protection of the Canal and auxiliary works, and all provisions, medicines, clothing, supplies and other things necessary and convenient for the officers, employees, workmen and laborers in the service and employ of the United States and for their families. If any such articles are disposed of for use outside of the zone and auxiliary lands granted to the United States and within the territory of the Republic, they shall be subject to the same import or other duties as like articles imported under the laws of the Republic of Panama. Article XIY" As the price or compensation for the rights, powers and privileges granted in this convention by the Republic of Panama to the United States, the Government of the United States agrees to pay to the Republic of Panama the sum of ten million dollars ($10,000,000) in gold coin of the United States on the exchange of the ratification of this convention and also an annual payment during the life of this convention of two hundred and fifty thousand dollars ($250,000) in like gold coin, beginning nine years after the date aforesaid. The provisions of this Article shall be in addition to all other benefits assured to the Republic of Panama under this convention. But no delay or difference of opinion under this Article or any other provisions of this treaty shall affect or interrupt the full operation and effect of this con- vention in all other respects. Article XV The joint commission referred to in Article VI shall be established as follows : The President of the United States shall nominate two persons and the Presi- dent of the Republic of Panama shall nominate two persons and they shall 9 Art. X modified by art. II of treaty of Jan. 25. 1955. " Art. XIV amended by art. VII of treaty of Mar. 2, 1936, and art. I of treaty of Jan. 25, 1955. 37 proceed to a decision ; but in case of disagreement of the Commission (by reason of their being equally divided in conclusion) an umpire shall be appointed by the two Governments who shall render the decision. In the event of the death, absence, or incapacity of a Commissioner or Umpire, or of his omitting, de- clining or easing to act, his place shall be filled by the appointment of another person in the manner above indicated. All decisions by a majority of the Com- mission or by the umpire shall be final. Article XVI The two Governments shall make adequate provision by future agreement for the pursuit, capture, imprisonment, detention and delivery within said zone and auxiliary lands to the authorities of the Republic of Panama of persons charged w^ith the commitment of crimes, felonies or misdemeanors without said zone and for the pursuit, capture, imprisonment, detention and delivery without said zone to the authorities of the United States of persons charged with the commitment of crimes, felonies and misdemeanors within said zone and auxiliary lands. Article XVII The Republic of Panama grants to the United States the use of all the ports of the Republic open to commerce as places of refuge for any vessels employed in the Canal enterprise, and for all vessels passing or bound to pass through the Canal which may be in distress and be driven to seek refuge in said ports. Such vessels shall be exempt from anchorage and tonnage dues on the part of the Republic of Panama. Article XVIII The Canal, when constructed, and the entrances thereto shall be neutral in perpetuity, and shall be opened upon the terms provided for by Section I of Article three of, and in conformity with all the stipulations of, the treaty entered into by the Governments of the United States and Great Britain on November 18, 1901.^ Article XIX" The Government of the Republic of Panama shall have the right to transport over the Canal its vessels and its troops and munitions of war in such vessels at all times without paying charges of any kind. The exemption is to be extended to the auxiliary railway for the transportation of persons in the service of the Republic of Panama, or of the police force charged with the preservation of public order outside of said zone, as well as to their baggage, munitions of war and supplies. Article XX If by virtue of any existing treaty in relation to the territory of the Isthmus of Panama, whereof the obligations shall descend or be assumed by the Republic of Panama, there may be any privilege or concession in favor of the Government or the citizens and subjects of a third power relative to an interoceanic means of communication which in any of its terms may be incompatible with the terms of the present convention, the Republic of Panama agrees to cancel or modify such treaty in due form, for which purpose it shall give to the said third power the requisite notification within the term of four months from the date of the present convention, and in case the existing treaty contains no clause permitting its modifications or annulment, the Republic of Panama agrees to procure its modification or annulment in such form that there shall not exist any conflict with the stipulations of the present convention. Article XXI The rights and privileges granted by the Republic of Panama to the United States in the preceding Articles are understood to be free of all anterior debts, liens, trusts, or liabilities, or concessions or privileges to other Governments, corporations, syndicates or individuals, and consequently, if there should arise any claims on account of the present concessions and privileges or otherwise, the claimants shall resort to the Government of the Republic of Panama and not to the United States for any indemnity or compromise which may be required.- " TS 401, vost, vol. 12. UNITED KINGDOM. " Art. XIX modified by art. IX of treaty of Jan. 25. 1955. 38 Article XXII The Republic of Panama renounces and grants to the United States the participation to whicli it might be entitled in the future earnings of the Canal under Article XV of the concessionary contract with Lucien N. B. Wyse now owned by the New Panama Canal Company and any and all other rights or claims of a pecuniary nature arising under or relating to said concession, or arising under or relating to the concessions to the Panama Railroad Company or any extension or modification thereof; and it likewise renounces, confirms and grants to the United States, now and hereafter, all the rights and property reserved in the said concessions which otherwise would belong to Panama at or before the expiration of the terms of ninety-nine years of the concessions granted to or held by the above mentioned party and companies, and all right, title and interest which it now has or may hereafter have, in and to the lands, canal, works, property and rights held by the said companies under said con- cessions or otherwise, and acquired or to be acquired by the United States from or through the Xew Panama Canal Company, including any property and rights which might or may in the future either by lapse of time, forfeiture or otherwise, revert to the Republic of Panama under any contracts or concessions, with said Wyse, the Universal Panama Canal Company, the Panama Railroad Company and the Xew Panama Canal Company. The afores'aid rights and property shall be and are free and released from any present or reversionary interest in or claims of Panama and the title of the United States thereto upon consummation of the contemplated purchase by the United States from the Xew Panama Canal Company, shall be absolute, so far as concerns the Republic of Panama, excepting always the rights of the Republic si^ecifically secured under this treaty. Article XXIII If it should become necessary at any time to employ armed forces for the safety or protection of the Canal, or of the ships that make use of the same, or the railways and auxiliary works, the United States shall have the right, at all times and in its discretion, to use police and its land and naval forces or to establish fortifications for these purposes. Article XXIV No change either in the Government or in the laws and treaties of the Republic of Panama shall, without the consent of the United States, affect any right of the United States under the present convention, or under any treaty stipulation between the two countries that now exists or may hereafter exist touching the subject matter of this convention. If the Republic of Panama shall hereafter enter as a constituent into any other Government or into any union or confederation of states, so as to merge her sovereignty or independence in such Government, union or confederation, the rights of the United States under this convention shall not be in any i*espect lessened or impaired. Article XXV For the better performance of the engagements of this convention and to the end of the eflScient protection of the Canal and the preservation of its neutrality, the Government of the Republic of Panama will sell or lease to the United States lands adequate and necessary for naval or coaling stations on the Pacific coast and on the western Caribbean coast of the Republic at certain points to be agreed upon with the President of the United States. Article XXVI This convention when signed by the Plenipotentiaries of the Contracting Parties shall be ratified by the respective Governments and the ratifications shall be exchanged at Washington at the earliest date possible. In faith whereof the respective Plenipotentiaries have signed the present con- vention in duplicate and have hereunto aflSxed their respective seals. Done at the City of Washington the 18th day of November in the year of our Lord nineteen hundred and three. [SEAL] John Hay. [seal] p. Bunau V.\billa. Treaty hettveen the United States and Panama for the mutual extradition of criminals. Signed at the City of Panama, May 25, 190-'/; ratification advised hy the Senate, January 6, 1905; ratified hy the President, January 20, 1905; ratified hy Panama, May 25, 190'/; ratifications exchanged at City of Panama,. April 8, 1905; proclaimed, May 12, 1905. liY THE PKESIDENT OF THE U^'ITED STATES OF AMERICA A PROCLAMATION Whereas a Treaty between the United States of America and the Republic of Panama providing for the mutual extradition of fugitives from justice was concluded and signed by their respective Plenipotentiaries at Panama on the twenty-fifth day of May, one thousand nine hundred and four, the original of which Treaty, being in the English and Spanish languages, is word for word as follows : TREATY BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF PANAMA, PROVIDING FOR EXTRADITION OF CRIMINALS. The United States of America and the Republic of Panama, being desirous to confirm their friendly relations and to promote the cause of justice, have resolved to conclude a treaty for the extradition of fugitives from justice between the United States of America and the Republic of Panama, and have appointed for that purpose the following Plenipotentiaries: — The President of the United States of America, William W. Russell, Charge d' Affaires and interim of the United States in Panama, and the President of the Republic of Panama, Tomas Arias, Secretary of Government of Panama. Who, after having communicated to each other their respective full powers, found in good and due form, have agreed upon and concluded the following articles : — Article I The Government of the United States and the Government of the Republic of l*anama mutually agree to deliver up persons who, having been charged with or convicted of any of the crimes and offenses specified in the following article, committed within the jurisdiction of one of the contracting parties, shall seek an asylum or be found within the territories of the other : Provided, that this shall only be done upon such evidence of Criminality as, according to the laws of the place where the fugitive or person so charged shall be found, would justify his or her apprehension and commitment for trial if the crime or offense had been there committed. Article II Extradition shall be granted for the following crimes and offenses: — 1. Murder, comprehending assassination, parricide, infanticide and poisoning. Attempt to commit murder; manslaughter, when voluntary. 2. Arson. 3. Robbery, defined to be the act of feloniously and forcibly taking from the person of another money, goods, documents or other property by violence or putting him in fear ; burglary. 4. Forgery, or the utterance of forged papers ; the forgery or falsification of official acts of Government, of public authorities, or of courts of justice, or the utterance of the thing forged or falsified. 5. The counterfeiting, falsifying or altering of money, whether coin or paper or of instruments of debt created by national, state, provincial, or municipal governments, or of coupons thereof, or of bank notes or the utterance or circula- tion of the same ; or the counterfeiting, falsifying or altering of seals of state. (39) 99-592—78 4 40 6. Embezzlement by public oflScers ; embezzlement by persons hired or salaried, to the detriment of their employers ; where in either class of cases the embezzle- ment exceeds the sum of two hundred dollars ; larceny. 7. Fraud or breach of trust by a bailee, banker, agent, factor, trustee, or other person acting in a fiduciary capacity, or director or member or officer of any company, when such act is made criminal by the laws of both countries and the amount' of money or, the value of the property misappropriated is not less than two hundred dollars. 8. Perjury : subordination of perjury. 9. Rape ; abduction ; kidnapping. 10. Wilful and unlawful destruction or obstruction of railroads which endan- gers human life. 11. Crimes commited at sea. (a) Piracy, by statute or by the laws of nations. (6) Revolt, or conspiracy to revolt, by two or more persons on board a ship on the high seas against the authority of the master. (c) Wrongfully sinking or destroying a vessel at sea, or attempting to do so. (d) Assaults on board a ship on the high seas with intent to do grievous bodily harm. 12. Crimes and offenses against the laws of both countries for the suppression of slavery and slave trading. 13. Bribery, defined to be the giving, offering or receiving of a reward to influ- ence one in the discharge of a legal duty. Extradition is also to take place for participation in any of the crimes and offenses mentioned in this Treaty, provided such participation may be punished, in the United States as a felony, and in the Republic of Panama by imprison- ment at hard labor. Article III Requisitions for the surrender of fugitives from justice shall be made by the diplomatic agents of the contracting parties, or in the absence of these from the country or its seat of government, may be made by the superior Consular Officers. If the person whose extradition is requested shall have been convicted of a crime or offense, a duly authenticated copy of the sentence of the court in which he was convicted, or if the fugitive is merely charged with a crime, a duly authen- ticated copy of the warrant of arrest in the country where the crime has been committed, and of the depositions or other evidence upon which such warrant was issued, shall be produced. The extradition of fugitives under the provisions of this Treaty shall be carried out in the United States and in the Republic of Panama, respectively, in con- formity with the laws regulating extradition for the time being in force in the state on which the demand for surrender is made. Aeticle IV Where the arrest and detention of a fugitive are desired on telegraphic or other information in advance of the presentation of formal proofs, the proper course in the United States shall be to apply to a judge or other magistrate au- thorized to issue warrants of arrest in extradition cases and present a complaint on oath, as provided by the statutes of the United States. When, under the provisions of this article, the arrest and detention of a fugitive are desired in the Republic of Panama, the proper course shall be to apply to the Foreign Office, which will immediately cause the necessary steps to be taken in order to secure the provisional arrest or detention of the fugitive. The provi- sional detention of a fugitive shall cease and the prisoner be released if a formal requisition for his surrender, accompanied by the necessary evidence of his crim- inality has not been produced under the stipulations of this Treaty, within two months from the date of his provisional arrest or detention. Aeticle V Neither of the contracting parties shall be bound to deliver up its own citizens .or subjects under the stipulations of this Treaty. 41 Article VI A fugitive criminal shall not be surrendered if tlie offense in respect of which his surrender is demanded be of a political character, or if he proves that the requisition for his surrender has, in fact, been made with a view to try or punish him for an offense of a political character. No person surrendered by either of the high contracting parties to the other shall be triable or tried, or be punished, for any political crime or offense, or for any act connected there- with, committed previously to his extradition. If any question shall arise as to whether a case comes within the provisions of this article, the decision of the authorities of the government on which the demand for surrender is made, or which may have granted the extradition, shall be finaL Article VII Extradition shall not be granted, in pursuance of the provisions of this Treaty if legal proceedings or the enforcement of the penalty for the act committed by the person claimed has become barred by limitation, according to the laws of the country to which the requisition is addressed. Article VIII No person surrendered by either of the high contracting parties to the other shall, without his consent, freely granted and publicly declared by him, be triable or tried or be punished for any crime or offense committed prior to his extradition, other than that for which he was delivered up, until he shall have liad an opportunity of returning to the country from which he was surrendered. Article IX All the articles seized which are in the possession of the i>erson to be sur- rendered at the time of his apprehension, whether being the proceeds of the crime or offense charged, or being material as evidence in making proof of the crime or offense, shall, so far as practicable and in conformity with the laws of the respective countries, be given up when the extradition takes place. Never- theless, the rights of third parties with regard to such articles shall be duly respected. Article X If the individual claimed by one of the high contracting parties, in pursuance of the present Treaty, shall also be claimed by one or several other powers on account of crimes or offenses committed within their respective jurisdictions, his extradition shall be granted to the State whose demand is first received: Provided, that the government from which extradition is sought is not bound by treaty to give preference otherwise. Article XI The expenses incurred in the arrest, detention, examination, and delivery of fugitives under this Treaty shall be borne by the State in whose name the ex- tradition is sought: Provided, that the demanding government shall not be compelled to bear any expense for the services of such public ofiicers of the government from which extradition is sought as receive a fixed salary; and, provided, that the charge for the services of such public officers as receive only fees or perquisites shall not exceed their customary fees for the acts or services performed by them had such acts or services been performed in ordinary criminal proceedings under the laws of the country of which they are officers. Article XII The present Treaty shall take effect on the thirtieth day after the date of the exchange of ratifications, and shall not operate retroactively. The ratifications of the present Treaty shall be exchanged at Washington or at Panama as soon as possible, and it shall remain in force for a period of six months after either 42 of the contracting Governments shall have given notice of a purpose to terminate it. In witness whereof, the respective Plenipotentiaries have signed the above articles, both in the English and Spanish languages, and have hereunto afllxed their seals. Done in duplicate at the city of Panama on the twenty fifth day of May in the year of our Lord nineteen hundred and four. [seal] W. W. Russell, [seal] Tom as Arias. And whereas the said Treaty has been duly ratified on both parts and the ratifications of the two governments were exchanged in the City of Panama on the eighth day of April, one thousand nine hundred and five ; Now, therefore, be it known that I, Theodore Roosevelt, President of the United States of America, have caused the said Treaty to be made public, to the end that the same and every article and clause thereof may be observed and fulfilled with good faith by the the United States States and the citizens thereof. In testimony whereof, I have hereunto set my hand and caused the Seal of the United States of America to be aflBxed. Done at the City of Washington, this twelfth day of May in the year of our Lord one thousand nine hundred and five, and of the Independence of the United States of America the one hundred and twenty -ninth. [seal] Theodore Roosevelt. By the President : Francis B. Loomis, Acting Secretary of State. NEUTRALITY Protocol of an agreement signed at Washington October 10, lOlJf. Entered into force October 10, 1914. Confinned by agreement of August 25, 1939} 38 Stat. 2042; Treaty Series 597 Protocol op an Agreement Concluded between Honorable Robert Lansing, Acting Secretary of State of the United States, and Don Eusebio A. Mor-^les, Envoy Extraordinary and Minister Plenipotentiary of the Re- public OF Panama, Signed the Tenth Day of October, 1914 The undersigned, the Acting Secretary of State of the United States of America and the Envoy Extraordinary and Minister Plenipotentiary of the Republic of Panama, in view of the close association of the interests of their respective Governments on the Isthmus of Panama, and to the end that these interests may be conserved and that, when a state of war exists, the neutral obligations of both Governments as neutrals may be maintained, after having conferred on the subject and being duly empowered by their respective Governments, have agreed : That hospitality extended in the waters of the Republic of Panama to a belligerent vessel of war or a vessel belligerent or neutral, whether armed or not, which is employed by a belligerent power as a transport or fleet auxiliary or in any other way for the direct purpose of prosecuting or aiding hostilities, whether by land or sea, shall serve to deprive such vessel of like hospitality in the Panama Canal Zone for a period of three months, and vice versa. In testimony whereof, the undersigned have signed and sealed the present Protocol in the city of Washington this tenth day of October, 1914. [seal] Robert Lansing, [seal] Eusebio A. Morales. - EAS 160, vost, p. 786. (43) Convention "between the United States and Nicaragua ceding rights for construc- tion of ship canal hy Nicaraguan route, etc} Signed at Washington, Aiigust 5, 1914; ratification advised by the Senate, tvith amendments, February 18, 1916; ratified by Nicaragua, April 13, 1916; ratified by the President, June 19, 1916; ratifications exchanged at Washington, June 22, 1916; proclaimed, June 24, 1916 By the President of the United States of America A PROCLAMATION Whereas a Convention between the United States of America and the Republic of Nicaragua granting to tlie United States the exclusive proprietary rights for the construction and operation of an interoceanic canal by a Nicaraguan route, the lease of certain islands, and the right to establish a naval base on the Gulf of Fonseca, was concluded and signed by tlieir respective Plenipotentiaries at Washington, on the fifth day of August, one thousand nine hundred and fourteen, the original of which Convention, being in the English and Spanish languages is, as amended by the Senate of the United States, word for word as follows: The Government of the United States of America and the Government of Nicaragua being animated by the desire to strengthen their ancient and cordial friendship by the most sincere cooperation for all purposes of their mutual advantage and interest and to provide for the possible future construction of an interoceanic ship canal by way of the San Juan River and the great Lake of Nicaragua, or by any route over Nicaraguan territory, whenever the construction of such canal shall be deemed by the Government of the United States conducive to the interests of both countries, and the Government of Nicaragua wishing to facilitate in every way possible the successful maintenance and operation of the Panama Canal, the two Governments have resolved to conclude a Conven- tion to these ends, and have accordingly appointed as their plenipotentiaries : The President of the United States, the Honorable William Jennings Bryan^ Secretary of State ; and The President of Nicaragua, Seiior General Don Emiliano Chamorro, Envoy Extraordinary and Minister Plenipotentiary of Nicaragua to the United States ; Who, having exliibited to each other their respective full powers, found to be in good and due form, have agreed upon and concluded the following articles : Article I The Government of Nicaragua grants in perpetuity to the Government of the United States, forever free from all taxation or other public charge, the exclusive proprietary rights necessary and convenient for the construction, operation and maintenance of an interoceanic canal by way of the San Juan River and the great Lake of Nicaragua or by way of any route over Nicaraguan territory, the details of the terms upon which such canal shall be constructed, operated and maintained to be agreed to by the two governments whenever the Government of the United States shall notify the Government of Nicaragua of its desire or intention to construct such canal. Article II To enable the Government of the United States to protect the Panama Canal and the proprietary rights granted to the Government of the United States by the foregoing article, and also to enable the Government of the United States to take any measure necessary to the ends contemplated herein, the Government of Nicaragua hereby leases for a term of ninety-nine years to the Government of the United States the islands in the Caribbean Sea known as Great Corn Island and Little Corn Island : and the Government of Nicaragua further grants to the Government of tlie United States for a like period of ninety-nine years the right to establish, operate and maintain a naval base at such place on the 1 See page 479. Note. — The amendments of the Senate were accepted by Nicaragua and are incorporated In the text of the Convention. (45) 46 territory of Nicaragua bordering upon the Gulf of Fonseca as the Government of the United States may select. The Government of the United States shall have the option of renewing for a further term of ninety-nine years the above leases and grants upon the expiration of their respective terms, it being expressly agreed that the territory hereby leased and the naval base which may be maintained under the grant aforesaid shall be subject exclusively to the laws and sovereign authority of the United States during the terms of such lease and grant and of ^iny renewal or renewals thereof. Article III In consideration of the foregoing stipulations and for the purposes contem- plated by this Convention and for the purpose of reducing the present indebted- ness of Nicaragua, the Government of the United States shall, upon the date of the exchange of ratification of this Convention, pay for the benefit of the Republic of Nicaragua the sum of three million dollars United States gold coin, of the present weight and fineness, to be deposited to the order of the Government of Nicaragua in such bank or banks or with such banking corporation as the Government of the United States may determine, to be applied by Nicaragua upon its indebtedness or other public purposes for the advancement of the wel- fare of Nicaragua in a manner to be determined by the two High Contracting Parties, all such disbursements to be made by orders drawn by the Minister of Finance of the Republic of Nicaragua and approved by the Secretary of State of the United States or by such person as he may designate. Article IV This Convention shall be ratified by the High Contracting Parties in accord- ance with their respective laws, and the ratifications thereof shall be exchanged at Washington as soon as possible. In witness whereof the respective plenipotentiaries have signed the present treaty and have aflEixed thereunto their seals. Done at Washington, in duplicate, in the English and Spanish languages, on the .5th day of August, in the year nineteen hundred and fourteen, [seal] William Jennings Bryan. [seal] Emiliano Chamorro. And whereas, the advice and consent of the Senate of the United States to the ratification of the said Convention was given w^ith the following proviso : ^'Provided, That, whereas. Costa Rica, Salvador and Honduras have protested against the ratification of the said Convention in the fear or belief that said Convention might in some respect impair existing rights of said States ; there- fore, it is declared by the Senate that in advising and consenting to the ratifica- tion of the said Convention as amended such advice and consent are given with the understanding, to be expressed as a part of the instrument of ratification, that nothing in said Convention is intended to affect any existing right of any of the said named States ;" And whereas, the said understanding has been accepted by the Government of Nicaragua ; And whereas, the said Convention, as amended by the Senate of the United States, has been duly ratified on both parts, and the ratifications of the two governments were exchanged in the City of Washington, on the twenty-second day of June, one thousand nine hundred and sixteen : Now, therefore, be it known that I, Woodrow Wilson, President of the United States of America, have caused the said Convention, as amended, and the said understanding to be made public, to the end that the same and every article and clause thereof may be observed and fulfilled with good faith by the United States and the citizens thereof. In testimony whereof. I have hereunto set my hand and caused the seal of the United States to be affixed. Done at the City of Washington this twenty-fourth of June in the year of our Lord one thousand nine hundred and sixteen, and of the Independence of the United States of America the one hundred and fortieth. [seal] Woodrow Wilson. By the President : Robert Lansing, Secretary of State, FRIENDSHIP AND COOPERATION Treaty signed at Washington March 2, 1936, with exchanges of notes at Washington March 2, 1936, and Fetruary 1 and July 25, 1939. Ratified hy Panama July 17, 1939. Senate advice and consent to ratification July 25, 1939. Ratified dy the President of the United States July 26, 1939. Ratifications exchanged at Washington July 27, 1939. Entered into force July 27, 1939. Proclaimed by the President of the United States July 27, 1939. Amended by convention of May 2-i, 1950,^ and treaty of January 25, 1955.' 53 Stat. 1807 ; Treaty Series 945 Treaty The United States of America and the Republic of Panama, animated by the desire to strengthen further the bonds of friendship and cooperation between the two countries and to regulate on a stable and mutually satisfactory basis certain questions which have arisen as a result of the construction of the inter- oceanic canal across the Isthmus of Panama, have decided to conclude a treaty, and have designated for this purpose as their Plenipotentiaries : The President of the United States of America : Mr. Cordell Hull, Secretary of State of the United States of America, and Mr. Sumner Welles, Assistant Secretary of State of the United States of America ; and The President of the Republic of Panama : The Honorable Doctor Ricardo J. Alfaro. Envoy Extraordinary and Min- ister Plenipotentiary of Panama to the United States of America, and The Honorable Doctor Narciso Garay, Envoy Extraordinary and Minister Plen- ipotentiary of Panama on special mission ; Who. having communicated their respective full powers to each other, which have been found to be in good and due form, have agreed upon the following : Article I Article I of the Convention of November 18, 1903,' is hereby superseded. There shall be a perfect, firm and inviolable peace and sincere friendship between the United States of America and the Republic of Panama and between their citizens. In view of the oflScial and formal opening of the Panama Canal on July 12. 1920, the United States of America and the Republic of Panama declare that the provisions of the Convention of November 18, 1903, contemplate the use. occupation and control by the United States of America of the Canal Zone and of the additional lands and waters under the jurisdiction of the United States of America for the purposes of the efBcient maintenance, operation, sanitation and protection of the Canal and of its auxiliary works. The United States of America will continue the maintenance of the Panama Canal for the encouragement and use of interoceanic commerce, and the two Governments declare their willingness to cooperate, as far as it is feasible for them to do so, for the purpose of insuring the full and perpetual enjoyment of the benefits of all kinds which the Canal should afford the two nations that made possible its construction as well as all nations interested in world trade. Article II The United States of America declares that the Republic of Panama has loyally and satisfactorily complied with the obligations which it entered into under If) ITST 4fil : TIAS 31 SO. 2 fi UST 2273 : TIAS 3297. 3TS 431. ante, p. 663. (47) 48 Article II of the Convention of November 18, 1903, by which it granted in per- petuity to the United States the use, occupation and control of the zone of land and land under water as described in the said Article, of the islands within the limits of said zone, of the group of small islands in the Bay of Panama, named Perico, Naos, Culebra and Flamenco, and of any other lands and waters outside ■of said zone neecssary and convenient for the construction, maintenance, opera- tion, sanitation and protection of the Panama Canal or of any auxiliary canals or other works, and in recognition thereof the United States of America hereby renounces the grant made to it in perpetuity by the Republic of Panama of the use, occupation and control of lands and waters, in addition to those now under the jurisdiction of the United States of America outside of the zone as described in Article II of the aforesaid Convention, which may be necessary and con- venient for the construction, maintenance, operation, sanitation and protection of the Panama Canal or of any auxiliary canals or other works necessary and -convenient for the construction, maintenance, operation, sanitation and protection of the said enterprise. While both Governments agree that the requirement of further lands and waters for the enlargement of the existing facilities of the Canal appears to be improbable, they nevertheless recognize subject to the provisions of Articles I and X of this Treaty, their joint obligation to insure the effective and con- tinuous operation of the Canal and the preservation of its neutrality, and consequently, if, in the event of some now unforeseen contingency, the utilization of lands or waters additional to those already employed should be in fact neces- sary for the maintenance, sanitation or efiBcient operation of the Canal, or for its effective protection, the Governments of the United States of America and the Republic of Panama will agree upon such measures as it may be necessary to take in order to insure the maintenance, sanitation, eflScient operation and effective protection of the Canal, in which the two countries are jointly and vitally interested. Article III In order to enable the Republic of Panama to take advantage of the commer- cial opportunities inherent in its geographical situation, the United States of America agrees as follows : (1) The sale to individuals of goods imported into the Canal Zone or purchased, produced or manufactured therein by the Government of the United States of America shall be limited by it to the persons included in classes (a) and (b) of Section 2 of this Article ; and with regard to the persons included in classes (c), (d) and (e) of the said Section and members of their families, the sales above mentioned shall be made only when such persons actually reside in the Canal Zone. (2) No person who is not comprised within the following classes shall be en- titled to reside within the Canal Zone : (a) Officers, employees, workmen or laborers in the service or employ of the United States of America, the Panama Canal or the Panama Railroad Company, and members of their families actually residing with them ; ( & ) Members of the armed forces of the United States of America and members of their families actually residing with them ; (c) Contractors operating in the Canal Zone and their employees, workmen and laborers during the performance of contracts ; (d) OtEcers, employees or workmen of companies entitled under Section 5 of this Article to conduct operations in the Canal Zone ; (e) Persons engaged in religious, welfare, charitable, educational, recrea- tional and scientific work exclusively in the Canal Zone ; (/) Domestic servants of all the beforementioned persons and members of the families of the persons in classes (c), (d) and (e) actually residing with them. (8) No dwellings belong to the Government of the United States of America or to the Panama Railroad Company and situated within the Canal Zone shall be rented, leased or sublet except to persons within classes (a) to (c), inclusive of Section 2 hereinabove. (4) The Government of the United States of America will continue to cooperate in all proper ways with the Government of the Republic of Panama to prevent violations of the immigration and customs laws of the Republic of Panama, including the smuggling into territory under the jurisdiction of the Republic of goods imported into the Canal Zone or purchased, produced or manufactured therein by the Government of the United States of America. 49 (o) With tbe exception of concerns having a direct relation to the operation, maintenance, sanitation or protection of the Canal, such as those engaged in the operation of cables, shipping, or dealing in oil or fuel, the Government of the United States of America will not permit the establishment in the Canal Zone of private business enterprises other than those existing therein at the time of the signature of this Treaty. (6) In view of the proximity of the port of Balboa to the city of Panama and of the port of Cristobal to the city of Colon, the United States of America will continue to permit, under suitable regulations and upon the payment of proper charges, vessels entering at or clearing from the ports of the Canal Zone to use and enjoy the dockage and other facilities of the said ports for the purpose of loading and unloading cargoes and receiving or disembarking passengers to or from the territory under the jurisdiction of the Republic of Panama. The Republic of Panama will permit vessels entering at or clearing from the ports of Panama or Colon, in case of emergency and also under suitable regula- tions and upon the payment of proper charges, to use and enjoy the dockage and other facilities of said ports for the purpose of receiving or disembarking pas- sengers to or from the territory of the Republic of Panama under the jurisdiction of the United States of America, and of loading and unloading cargoes either in transit or destined for the service of the Canal or of works pertaining to the Canal. (7) The Government of the United States of America will extend to private merchants residing in the Republic of Panama full opportunity for making sales to vessels arriving at terminal ports of the Canal or transiting the Canal, subject always to appropriate administrative regulations of the Canal Zone. Article IV The Government of the Republic of Panama shall not impose import duties or taxes of any kind on goods destined for or consigned to the agencies of the Goveriunent of the United States of America in the Republic of Panama when the goods are intended for the official use of such agencies, or upon goods des- tined for or consigned to persons included in classes (a) and (b) in Section 2 of Article III of this Treaty, who reside or sojourn in territory under the juris- diction of the Republic of Panama during the performance of their service with the United States of America, the Panama Canal or the Panama Railroad Com- pany, when the goods are intended for their own use and benefit. The United States of America shall not impose import duties or taxes of any kind on goods, wares and merchandise passing from territory under the jurisdic- tion of the Republic of Panama into the Canal Zone. Xo charges of any kind shall be imposed by the authorities of the United States of America upon persons residing in territory under the jurisdiction of the Republic of Panama passing from the said territory into the Canal Zone, and no charges of any kind shall be imposed by the authorities of the Republic of Panama upon persons in the service of the United States of America or residing in the Canal Zone passing from the Canal Zone into territory under the jurisdic- tion of tiie Republic of Panama, all other persons passing from the Canal Zone into territory under the jurisdiction of the Republic of Panama being subject to the full effects of the immigration laws of the Republic. In view of the fact that the Canal Zone divides the territory under the jurisdic- tion of the Republic of Panama, the United States of America agrees that, subject to such police regulations as circumstances may require, Panamanian citizem? who may occasionally be deported from the Canal Zone shall be assured transit through the said Zone, in order to pass from one part to another of the territory under the jurisdiction of the Republic of Panama. Article V Article IX of the Convention of November 18, 1903, is hereby superseded. The Republic of Panama has the right to impose upon merchandise destined to be introduced for use or consumption in territory under the jurisdiction of the Republic of Panama, and upon vessels touching at Panamanian ports and upon the officers, crew or passengers of such vessels, the taxes or charges provided by the laws of the Republic of Panama; it being understood that the Republic of Panama will continue directly and exclusively to exercise its jurisdiction over the ports of Panama and Colon and to operate exclusively with Panamanian per- 50 sonnel such facilities as are or may be established therein by the Republic or by its authority. However, the Republic of Panama shall not impose or collect any charges or taxes upon any vessel using or passing through the Canal which does not touch at a port under Panamanian jurisdiction or upon the officers, crew or passengers of such vessels, unless they enter the Republic ; it being also under- stood that taxes and charges imposed by the Republic of Panama upon vessels using or passing through the Canal which touch at ports under Panamanian juris- diction, or upon their cargo, officers, crew or passengers, shall not be higher than those imposed upon vessels which touch only at ports under Panamanian jurisdic- tion and do not transit the Canal, or upon their cargo, officers, crew or passengers. The Republic of Panama also has the right to determine what i^ersons or classes of persons arriving at ports of the Canal Zone shall be admitted to the Republic of Panama and to determine likewise what persons or classes of persons arriving at such ports shall be excluded from admission to the Republic of Panama. The United States of America will furnish to the Republic of Panama free of charge the necessary sites for the establishment of customhouses in the ports of the Canal Zone for the collection of duties on importations destined to the Re- public and for the examination of merchandise, baggage and passengers consigned to or bound for the Republic of Panama, and for tlie prevention of contraband trade, it being understood that the collection of duties and the examination of merchandise and passengers by the agents of the Government of the Repnl)lic of Panama, in accordance with this provision, shall take place only in the custom- houses to be established by the Government of the Repulilic of Panama as herein provided, and that the Republic of Panama will exercise exclusive jurisdiction within the sites on which the customhouses are located so far as concerns the enforcement of immigration or customs laws of the Republic of Panama, and over all property therein contained and the personnel therein employed. To further the effective enforcement of the rights hereinbefore recognized, the Government of the United States of America agrees that, for the purpose of ob- taining information useful in determining whether persons arriving at ix>rts of the Canal Zone and destined to points within the jurisdiction of the Republic of Panama should be admitted or excluded from admission into tlie Repul)lic, the immigration officers of the Republic of Panama shall have tlie right of free access to vessels upon their arrival at the Balboa or Cristobal piers or wharves with passengers destined for the Republic ; and that the appropriate authorities of the Panama Canal will adopt such administrative regulations regarding persons entering ports of the Canal Zone and destined to points within the jurisdiction of the Republic of Panama as will facilitate the exercise by the authorities of Panama of their jurisdiction in the manner provided in Paragraph 4 of this Article for the purposes stated in Paragraph 3 thereof. Article VI The first sentence of Article YII of the Convention of November 18, 11>03, is hereby amended so as to omit the following phrase : "or by the exercise of the right of eminent domain". The third paragraph of article VII of the Convention of November IS, 1903, is hereby abrogated. Article VII Beginning with the annuity payable in 1934 the payments under Article XIV of the Convention of November 18, 1903, between the United States of America and the Republic of Panama, shall be four hundred and thirty thousand Balboa s ( B/430,000.00 ) as defined by the agreement embodied in an exchange of notes of this date. The United States of America may discharge its obligation with respect to any such payment, upon payment in any coin or currency, provided the amount so paid is the equivalent of four hundred and thirty thousand Balboas (B/430,000.00) as so defined. Article VTII In order that the city of Colon may enjoy direct means of land communica- tion under Panamanian jurisdiction with other territory under jurisdiction of the Republic of Panama, the United States of America hereby transfers to the Republic of Panama jurisdiction over a corridor, the exact limits of Avhich shall be agreed upon and demarcated by the two Governments pursuant to the fol- lowing description : 51 (a) Tho end at Colon connects with the southern end of the east half of the Paseo del Centenario at Sixteenth Street, Colon ; thence the corridor proceeds in a general southerly direction, parallel to and east of Bolivar Highway to the vicinity of the northern edge of Silver City ; thence eastward near the shore line of Folks River, around the northeast corner of Silver City ; thence in a general southeasterly direction and generally parallel to the Randolph Road to a crossing of said Randoph Road, about 1200 feet east of the East Diversion ; thence in a general northeasterly direction to the eastern boundary line of the Canal Zone near the southeastern corner of the Fort Randolph Reservation, southwest of Cativa. The approximate route of the corridor is shown on the map which accompanies this Treaty, signed by the Plenipotentiaries of the two coun- tries and marked "Exhibit A." (b) The width of the corridor shall be as follows: 25 feet in width from the Colon end to a point east of the southern line of Silver City ; thence 100 feet in width to Randolph Road, except that, at any elevated crossing which may be built over Randolph Road and the railroad, the corridor will be no wider than is necessary to include the viaduct and will not include any part of Ran- dolph Road proper, or of the railroad right of way, and except that, in case of a grade crossing over Randolph Road and the railroad, the corridor will be interrupted by that highway and railroad ; thence 200 feet in width to the bound- ary line of the Canal Zone. The Government of the United States of America will extinguish any private titles existing or which may exist in and to the land included in the above- described corridor. The stream and drainage crossings of any highway built in the corridor shall not restrict the water passage to less than the capacity of the existing streams and drainage. Xo other construction will take place within the corridor than that relating to the construction of a highway and to the installation of electric power, telephone and telegraph lines ; and the only activities which will be conducted within the said corridor will be those pertaining to the construction, maintenance and com- mon uses of a highway and of power and communication lines. The United States of America shall enjoy at all times the right of unimpeded transit across the said corridor at any point, and of travel along the corridor, subject to such traffic regulations as may be established by the Government of the Republic of Panama ; and the Government of the United States of America shall have the right to such use of the corridor as would be involved in the construc- tion of connecting or intersecting highways or railroads, overhead and under- ground power, telephone, telegraph and pipe lines, and additional drainage channels, on condition that these structures and their use shall not interfere with the purpose of the corridor as provided hereinabove. Article IX In order that direct means of land communication, together with accommoda- tion for the high tension power transmission lines, may be provided under juris- diction of the United States of America from the Madden Dam to the Canal Zone, the Republic of Panama hereby transfers to the United States of America jurisdiction over a corridor, the limits of which shall be demarcated by the two Governments pursuant to the following descriptions : A strip of land 200 ft. in width, extending 62.5 ft. from the center line of the Gladden Road on its eastern boundary and 137.5 ft. from the center line of the Madden Road on its western boundary; containing an area of 105.8 acres or 42.81 hectares, as shown on the map which accompanies this Treaty, signed by the Plenipotentiaries of the two countries and marked "Exhibit B".^ Beginning at the intersection of the located center line of the Madden Road and the Canal Zone-Republic of Panama 5-mile boundary line, said point being located N. 29°20' W. a distance of 168.04 ft. along said boundary line from boundary monument No. 65, the geodetic position of boundary monument No. 65 being latitude N. 0°07' plus 3,948.8 ft. and longitude 79°37' plus 1,174.6 ft. ; thence N. 43° 10' E. a distance of 541.1 ft. to station 324 plus 06.65 ft. ; thence on a 3° curve to the left, a distance of 347.2 ft. to station 327 plus 53.9 ft. ; thence N. 32°45' E. a distance of 656.8 ft. to station .334 plus 10.7 ft. ; thence on a 3° curve to the left a distance of 455.55 ft. to station 338 plus " 66.25 ft. : •* Not printed here. 2 Not printed here. 52 thence X. 19°05' E. a distance of 1.135.70 ft. to station 350 plus 01.95 ft. r thence on an 8° curve to the left a distance of (550.7 ft. to station 356 plus 52.7 ft; thence N. 32" 58' W. a distance of 636.0 ft. to station 362 plus 88.7 ft. ; thence on a 10° curve to the right a distance of 227.3 ft. to station 365 plus 16.0 ft. ; thence N. 10° 14' W. a distance of 314.5 ft. to station 368 plus 30.5 ft. ; thence on a 5° curve to the left a distance of 178.7 ft. to station 370 plus 09.2 ft; thence N. 19° 10' W. a distance of 4,250.1 ft. to station 412 plus 59.3 ft. : thence on a 5° curve to the right a distance of 720.7 ft. to station 419 plus 80.0 ft; thence N. 16°52' E. a distance of 1,664.3 ft to station 436 plus 44.3 ft. ; thence on a 5° curve to the left a distance of 597.7 ft to station 442 plus 42.0 ft ; thence X. 13° 01' W. a distance of 543.8 ft. to station 447 plus 85.8 ft. ; thence on a 5° curve to the right a distance of 770.7 ft. to station 455 plus 56.5 ft; thence X. 25°31' E. a distance of 1,492.2 ft. to station 470 plus 48.7 ft : thence on a 5° curve to the right a distance of 808.0 ft. to station 478 plus 56.7 ft; thence X. 65°55' E. a distance of 281.8 ft. to station 481 plus 38.5 ft. ; thence on an 8° curve to the left a distance of 446.4 ft. to station 485 plus 84.9 ft; thence X^. 30° 12' E. a distance of 479.6 ft to station 490 plus 64.5 ft. ; thence on a 5° curve to the left a distance of 239.4 ft. to station 493 plus 93.9 ft; thence X. 13°44' E. a distance of 1,639.9 ft to station 510 plus 33.8 ft. ; thence on a 5° curve to the left a distance of 832.3 ft. to station 518 plus 66.1 ft. ; thence X. 27°53' W. a distance of 483.9 ft. to station 523 plus 50.0 ft. ; thence on an 8° curve to the right a distance of 469.6 ft to station 528 plus 19.6 ft ; thence X. 9°41' E. a distance of 1,697.6 ft to station 545 plus 17.2 ft. : thence on a 10° curve to the left a distance of 451.7 ft. to station 549 plus 68.9 ft., which is the point marked Point Z on the above-mentioned map known as "Exhibit B". (All bearings are true bearings.) The Government of the Republic of Panama will extinguish any private titles existing or which may exist in and to the land included in the above-described corridor. The stream and drainage crossings of any highway built in the corridor shall not restrict the water passage to less than the capacity of the existing streams and drainage. X""© other construction will take place within the corrider than that relating to the construction of a highway and to the installation of electric power, telephone and telegraph lines ; and the only activities which will be conducted within the said corridor will be those pertaining to the construction, maintenance and com- mon uses of a highway, and of power and communication lines, and auxiliary works thereof. The Republic of Panama shall enjoy at all times the right of unimpeded transit across the said corridor at any point, and of travel along the corridor, subjex^t to such traffic regulations as may be established by the authorities of the Panama Canal ; and the Government of the Republic of Panama shall have the right to such use of the corridor as would be involved in the construction of connecting or intersecting highways or railroads, overhead and under ground power, tele- phone, telegraph and pipe lines, and additional drainage channels, on condition that these structures and their use shall not interfere with the purpose of the corridor as provided hereinabove. Article X In case of an international conflagration or the existence of any threat of aggression which would endanger the security of the Republic of Panama or tlie neutrality or security of the Panama Canal, the Governments of the Ignited States of America and the Republic of Panama will take such measures of prevention and defense as they may consider necessary for the protection of their common interests. Any measures, in safeguarding such interests, which shall appear 53 essential to one Government to take, and wliicli may affect the territory under the jurisdiction of the other Government, will be the subject of consultation be- tween the two Governments. Article XI The provisions of this Treaty shall not affect the rights and obligations of either of the two Higli Contracting Parties under the treaties now in force between the two countries, nor be considered as a limitation, definition, restriction or restric- tive interpretation of such rights and obligations, but without prejudice to the full force and effect of any provisions of this Treaty which constitute addition to, modification or abrogation of, or substitution for the provisions of previousj treaties. Article XII The present Treaty shall be ratified in accordance with the constitutional methods of the High Contracting Parties and shall take effect immediately on the- exchange of ratifications which shall take place at Washington. In witness whereof, the Plentipotentiaries have signed this Treaty in dupli- cate, in the English and Spanish languages, both texts being authentic, and have- hereunto affixed their seals. Done at the city of Washington the second day of March, 1936. [SEAL] CORDELL HULL. fsEALl Sumner Welles. [SEAL] R. J. ^VLFARa [seal I Narciso Garay. PAXA^IA Mutual Understanding and Cooperation Treaty, with memorandum of understandings reached; Signed at Panama January 25, 1955 ; Ratification advised by the senate of the United States of America July 29, 1955; Ratified T)y the President of the United States of America August 17, 1955; Ratified hy Panama August 15, 1955 ; Ratifications exchanged at Washington August 23, 1955; Proclaimed Ity the President of the United States of America August 26, 1955; Entered into force August 23, 1955. By the President of the United States of America A PROCLAMATION Whereas a Treaty of Mutual Understanding and Cooperation between the United States of America and the Republic of Panama, together with a related Memorandum of Understandings Reached, was signed at Panama on January 25, 1955; Whereas the texts of the said Treaty and related Memorandum of Understand- ings Reached, in the English and Spanish languages, are word for word as follows : Treaty of Mutual Understanding and Cooperation Between the United States op America and the Republic of Panama The President of the United States of America and the President of the Re- public of Panama, desirous of concluding a treaty further to demonstrate the mutual understanding and cooperation of the two countries and to strengthen the bonds of understanding and friendship between their respective peoples, have appointed for that purpose as their respective Plenipotentiaries : The President of the United States of America : Selden Chapin, Ambassador Extraordinary and Plenipotentiary of the United States of America to the Republic of Panama. The President of the Republic of Panama : Octavio Fabrega, Minister of Foreign Relations of the Republic of Panama, who, having communicated to one another their respective full powers, found in good and due form, and recognizing that neither the provisions of the Convention signed November 18, 1903, nor the General Treaty signed March 2, 1936, nor the present Treaty, may be modified except by mutual consent, agree upon the fol- lowing Articles : Article I Beginning with the first annuity payable after the exchange of ratifications of the present Treaty, the payments under Article XIY of the Convention for the Construction of a Ship Canal between the United States of America and the Republic of Panama, signed November 18, 1903, as amended by Article VII of the General Treaty of Friendship and Cooperation, signed March 2, 1936, shall be One Million Nine Hundred Thirty Thousand and no/100 Balboas (B/1,930,000) as defined by the agreement embodied in the exchange of notes of March 2, 1936, between the Secretary of State of the United States of America and the Members of the Panamanian Treaty Commission. The United States of America may dis- charge its obligation with respect to any such payment in any coin or currencv, provided the amount so paid is the equivalent of One Million Nine Hundred Thirty Thousand and no/100 Balboas (B/1,930,000) as so defined. (55) 99-592—78 5 56 On the date of the first payment under the present Treaty, the provisions of this Article shall supersede the provisions of Article VII of the General Treaty signed March 2, 1936. Notwithstanding the provisions of this Article, the High Contracting Parties recognize the absence of any obligation on the part of either Party to alter the amount of the annuity. Article II (1) Notwithstanding the provisions of Article X of the Convention signed November 18, 1903, between the United States of America and the Republic of Panama, 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 of the Armed Forces of the United States of America, (6) 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. (2) It is understood that any tax levied pursuant to paragraph (1) of this Article shall be imposed on a non-discriminatory basis and shall in no case be imposed at a rate higher or more burdensome than that applicable to income of citizens of the Republic of Panama generally. (3) The Republic of Panama agrees not to impose taxes on pensions, annuities, relief payments, or other similar payments, or payments by way of compensation for injuries or death occurring in connection with, or incident to, service on the Canal, the railroad, or auxiliary works paid to or for the benefit of members of the Armed Forces or citizens of the United States of America or the lawful bene- ficiaries of such members or citizens who reside in territory under the jurisdiction of the Republic of Panama. The provisions of this Article shall be operative for the taxable years beginning on or after the first day of January following the year in which the present Treaty enters into force. Article III Subject to the provisions of the succeeding paragraphs of this Article, the United States of America agrees that the monopoly granted in perpetuity by the Republic of Panama to the United States for the construction, maintenance and operation of any system of communication by means of canal or railroad across its territory between the Caribbean Sea and the Pacific Ocean, by Article V of the Convention signed November 18, 1903, shall be abrogated as of the effective date of this Treaty in so far as it pertains to the construction, maintenance and opera- tion of any system of trans-Isthmian communication by railroad within the terri- tory under the jurisdiction of the Republic of Panama. Subject to the provisions of the succeeding paragraphs of this Article, the United States further agrees that the exclusive right to establish roads across the Isthmus of Panama acquired by the United States as a result of a conces- sionary contract granted to the Panama Railroad Company shall be abrogated as the date of the entry into force of this Treaty, in so far as the right pertains to the establishment of roads within the territory under the jurisdiction of the Republic of Panama. In view of the vital interest of both countries in the effective protection of the Canal, the High Contracting Parties further agree that such abrogation is sub- ject to the understanding that no system of inter-oceanic communication within the territory under the jurisdiction of the Republic of Panama by means of rail- road or highway may he financed, constructed, maintained, or operated directly or indirectly by a third country or nationale thereof, unless in the opinion of both High Contracting Parties such financing, construction, maintenance, or operation would not affect the security of the Canal. The High Contracting Parties also agree that such abrogation as is contem- plated by this Article shall in no wise affect the maintenance and operation of the present Panama Railroad in the Canal Zone and in territory subject to the jurisdiction of the Republic of Panama. 57 Article IV The second paragraph of Article VII of the Convention signed November 18, 1903, having to do with the issuance of, compliance with, and enforcement of, sanitary ordinances in the Cities of Panama and Colon, shall be abrogated in its entirety as of the date of entry into force of this Treaty. Article V The United States of America agrees that, subject to the enactment of legisla- tion by the Congress, there shall be conveyed to the Republic of Panama free of cost all the right, title and interest held by the United States of America or its agencies in and to certain lands and improvements in territory under the juris- diction of the Republic of Panama when and as determined by the United States to be no longer needed for the operation, maintenance, sanitation or protection of the Panama Canal or of its auxiliary works, or for other authorized purposes of the United States in the Republic of Panama. The lands and improvements re- ferred to in the preceding sentence and the determination by the United States of America respecting the same, subject to the enactment of legislation by the Con- gress, are designated and set forth in Item 2 of the Memorandum of Understand- ings Reached which bears the same date as this Treaty. The United States of America also agrees that, subject to the enactment of legislation by the Congress, there shall be conveyed to the Republic of Panama free of cost all its right, title and interest to the land and improvements in the area known as PAITILLA POINT and that effective with such conveyance the United States of America shall relinquish all the right, power and authority granted to it in such area under the Convention signed November 18, 1903. The Republic of Panama agrees to save the Government of the United States harmless from any and all claims which may arise incident to the conveyance of the area known as PAITILLA POINT to the Republic of Panama. Article VI Article V of the Boundary Convention, signed September 2, 1914, between the United States of America and the Republic of Panama, shall be replaced by the following provisions : "It is agreed that the permanent boundary line between the City of Colon (in- cluding the Harbor of Colon, as defined in Article VI of the Boundary Convention of 1914, and other waters adjacent to the shores of Colon) and the Canal Zone shall be as follows : Beginning at an unmarked point called "E", located on the northeasterly bound- ary of the Colon Corridor (at its Colon extremity), the geodetic position of which, referred to the Panama-Colon datum of the Canal Zone triangulation svstem, is in latitude 9° 21' N. plus 0.00 feet (0.000 meters) and longitude 79° 54' W. plus 356.09 feet (108.536 meters) . Thence from said initial point by metes and bounds : Due East, 2662.8 feet (811.632 meters), along North latitude 9°21' plus 0.00 feet (0.000 meters), to an unmarked point in Folks River, called "F", located at longitude 79° 53' W. plus 3700.00 feet (1127.762 meters) ; N. 36° 36' 30" E., 2616.00 feet (797.358 meters), to an unmarked point in Man- zanillo Bay, called "O" ; N. 22° 41' 30" W., 1192.00 feet (363.322 meters), to an unmarked point in Man- zanillo Bay, called "H" ; N. 56° 49' 00" W., 777.00 feet (236.830 meters), to an unmarked point in Manzanillo Bay, called "I" ; N. 29° 51' 00" W., 2793.00 feet (851.308 meters), to an unmarked point in Manzanillo Bay, called "J" ; N. 50° 56' 00" W., 3292.00 feet (1003.404 meters), to an unmarked point in Limon Bay, called "K" ; S. 56° 06' 11" W., 4258.85 feet (1298.100 meters), to an unmarked point in Limon Bay, called "L", which is located on the northerly boundary of the Harbor of Colon. Thence following the boundary of the Harbor of Col6n, as described in Article VI of the Boundary Convention signed September 2, 1914, to monument "D"', as follows : 58 N. 78° 30' 30" W., 2104.73 feet (641.523 meters), on a line to the light hous^ on Toro Point, to an unmarked point in Limon Bay, called "M", located 330 meters or 1082.67 feet easterly and at right angles from the centerline of the Panama Canal ; S. 00° 14' 50" W., 3074.46 feet (937.097 meters), parallel to and 330 meters or 1082.67 feet easterly from the centerline of the Panama Canal, to an unmarked point in Limon Bay, called "N' ; S. 78° 30' 30" E., 3952.97 feet (1204.868 meters), to monument "D' ", which is a concrete monument, located on the easterly shore of Limon Bay. Thence following the boundary between the City of Colon and the Canal Zone, as described in Article Y of the Boundary Convention signed September 2, 1914, to monument "B" as follows : S. 78° 30' 30" E., 258.65 feet (78.837 meters) through monuments Xos. 28 and 27 which are brass plugs in pavement, to monument "D" which is a concrete monu- ment, the distance being 159.96 feet (48.756 meters), 28.26 feet (8.614 meters), and 70.43 feet (21.467 meters), successively, from beginning of the course ; X. 74° 17' 35" E., 533.60 feet (162.642 meters), along the centerline of Eleventh Street, through monuments Xos. 26, 25, 24 and 23, which are brass plugs in the pavement, to "C*', which is an unmarked point beneath the clock pedestal on the centerline of Bolivar Avenue, the distances being 95.16 feet (29.005 meters), 91.02 feet (27.743 meters), 166.71 feet (50.813 meters), 158.66 feet (48.360 meters) and 22.05 feet (6.721 meters), successively, from beginning of the course ; S. 15° 58' 00" E., 965.59 feet (294.312 meters), along the centerline of Bolivar Avenue, through monuments X"os. 22, 21, 20 and 19, which are brass plugs in the pavement, to monument "B", which is a brass plug, the distances being 14.35 feet (4.374 meters). 143.13 feet (43.626 meters), 238.77 feet (72.777 meters), 326.77 feet (99.600 meters) and 242.57 feet (73.935 meters), successively from beginning of the course. (Monument "B" is the point of beginning referred to in Article I of the Convention between the United States of America and the Republic of Panama regarding the Colon Corridor and certain other Corridors through the Canal Zone, signed at Panama on May 24, 1950.) Thence following the boundary between the City of Colon and the Canal Zone, to monument "A", as described in Article I of the Corridor Convention referred to in the next-preceding paragraph : S. 15° 57' 40" E., 117.10 feet (35.692 meters) along the centerline of Bolivar Avenue to Monument Xo. A-8, which is a brass plug located at the intersection with the centerline of 14th Street projected westerly, in Xorth latitude 9° 21' plus 1356.18 feet (413.364 meters) and West longitude 79° 54' plus 1862.57 feet (567.712 meters) ; X. 73° 59' 35" E., 172.12 feet (52.462 meters) along the centerline of 14th Street to Monument X"o. A-7, which is a brass plug located at the intersection with the line of the west curb of Boundary Street projected northerly in X'orth lati- tude 9° 21' plus 1403.64 feet (427.830 meters) and West longitude 79° 54' plus 1697.12 feet (517.283 meters) ; Southerly along the westerly curb of Boundary Street and its prolongation to Monument Xo. A-4, which is a brass plug located at the intersection of two curves, in Xorth latitude 9° 21' plus 833.47 feet (254.042 meters) and West longitude 79° 54' plus 980.94 feet (298.991 meters) (this last mentioned course passes through a curve to the left with a radius of 40.8 feet (12.436 meters) and the intersection of its tangents at point A-6 iu Xorth latitude 9° 21' plus 1306.23 feet (398.140 meters) and West longitude 79° 54' plus 1669.37 feet (508.825 meters), and a curve to the right with a radius of 1522 feet (463.907 meters) with the point of intersection of its tangents at point A-5 in X'orth latitude 9° 21' plus 958.14 feet (292.042 meters) and West longtitude 79° 54' plus 1105.89 feet (337.076 meters) ) ; Through a curve to the left with a darius of 262.2 feet (79.019 meters) and the interesction of its tangents at point A-3 in Xorth latitude 0° 21' plus 769.07 feet (234.413 meters) and West longitude 79° 54' plus 955.43 feet (291.216 meters) ; a curve to the right with a radius of 320.0 feet (97.536 meters) and the inter- section of its tangents at point A-2 in Xorth latitude 9° 21' plus 673.38 feet (205.247 meters) and West longitude 79° 54' plus 836.40 feet (254.935 meters) ; and a curve to the left with a radius of 2571.5 feet (7S3.795 meters )and the intersection of its tangents at point A-1 in X'orth latitude 9° 21' plus 302.15 feet (92.096 meters) and West longitude 79° 54' plus 680.96 feet (207.557 meters) to Monument Xo. "A", which is a 1^2 inch brass plug located in the old sea wall, in Xorth latitude 9° 21' plus 45.60 feet (13.889 meters) and West longitude 79° 54" plus 487.65 feet (148.636 meters) ; 59 S. 21* 34' 50" W., 29.19 feet (8.897 meters), to an unmarked point called ^^Soiitheasterlv, 23.26 feet (7.090 meters), along a curve to the left with a radius of 2596.48 feet (791.409 meters) the chord of which bears S. 37° 28' E., 23.26 feet (7.090 meters) to an unmarked point called No. 2, located on the southwesterly boundary of the Colon Corridor at North latitde 9° 21' plus 0.00 feet (0.000 meters) ). The directions of the lines refer to the true meridian. The above described boundary is as shown on Panama Canal Company drawing No. 6117-22, entitled "Boundary Line Between the City of Colon and the Canal Zone", scale 1 inch to 600 feet, dated December 23, 1954, prepared for the Canal Zone Government, attached as an annex hereto and forming a part hereof." Article YIII of the General Treaty signed March 2, 1936, as amended by Article III of the Convention between the United States of America and the Republic of Panama regarding the Colon Corridor and certain other corridors through the Canal Zone, signed May 24, 1950, is hereby modified by removing from the Colon, or westerly, end of the Colon Corridor the portion thereof lying north of North latitude 9° 21' and incorporating such portion within the bound- ary of the City of Colon as described above. This Article shall become effective upon completion of the withdrawal by the United States of America from the sections of the city of Colon known as New Cristobal, Colon Beach and the de Lesseps Area, with the exoeption of the lots retained for consulate purposes, except that it shall in no case become effective prior to the exchange of the instruments of ratification of this Treaty and the exchange of instruments of ratification of the Convention signed May 24, 1950, referred to in the preceding paragraph. Article VII The second paragraph of Article II of the Boundary Convention signed September 2, 1914, between the United States of America and the Republic of Panama, shall be abrogated in its entirety as of the date of entry into force of the present Treaty. The landing pier situated in the small cove on the southerly side of Man- zanillo Island, constructed pursuant to provisions contained in the second paragraph of Article VII of the Boundary Convention of 1914 between the two countries, shall become the property of the Government of the Republic of Panama as of the date of entry into force of the present Treaty. Aeticle VIII (a) The Republic of Panama will reserve exclusively for the purpose of maneuvers and military training the area described in the maps (Nos. SGN-7-54 and SGN-S-54, each dated November 17, 1954) and accompanying descriptions prepared by the Comision Catastral of the Republic of Panama, attached as the Annex hereto, and will permit the United States of America, without cost and free of all encumbrances, exclusively to utilize said area for the indicated purpose for a period of fifteen (15) years, subject to extension thereafter as agreed by the two Governments. This authorization includes the free access to, egress from, and movements within and over, said area. This utilization will not affect the sovereignty of the Republic of Panama, or the operation of the Consti- tution and the laws of the Republic over the mentioned area. (b) The United States Armed Forces, the members thereof and their families actually residing with them, and United States nationals who, in an ofiicial capac- ity, are serving with or accompanying the Armed Forces of the United States and members of their families actually residing w^ith them will be exemjited within the said area from all taxation by the Republic of Panama or any of its political subdivisions. (c) Prior to the expiration of the period envisaged in this Article and within a reasonable time thereafter the United States shall liave the right to remove from this training and maneuver area, or otherwise to dispose of, without limita- tion or restriction all structures, installations, facilities, equipment and supplies brought into, or constructed or erected within this training and maneuver area by or on behalf of the United States. The Republic of Panama will not be re- quired to reimburse the United States for any structures, installations, facilities, equipment and supplies not removed or otherwise disposed of as provided herein. 60 (d) The United States shall be under no obligation to restore this training and maneuver area or the facilities and installations thereon to their original condi- tions upon the termination of this Article, except for the landing strip which will be returned in at least as good condition as that obtaining at the time of coming into effect of this Article, (e) The provisions of this Article shall in no manner terminate or modify the provisions concerning the holding of military maneuvers in the Republic of Pnnama established by the Notes ancillary to the General Treaty signed March 2, 1936 other than as provided herein for this training and maneuver area. Article IX The Republic of Panama hereby waives the right under Article XIX of the Convention signed November 18, 1903, to transportation by railway within the Zone, without paying charges of any kind, of persons in the service of the Republic of Panama, or of the police force charged with the preservation of public order outside of the Canal Zone, as well as of their baggage, munitions of war and supplies. Aeticle X The High Contracting Parties agree that, in the event of the discontinuance of the Panama Railroad, and of the construction or completion by the United States of a strategic highway across the Isthmus lying wholly within the Canal Zone in- tended primarily for serving the operation, maintenance, civil government, sani- tation and protection of the Panama Canal and Canal Zone, and notwithstand- ing anything to the contrary in Article VI of the Convention signed November 18, 1903, the United States of America may in its discretion either prohibit or re- strict the use, by buses or trucks not at the time engaged exclusively in the servicing of, or the transportation of supplies to, installation, facilities or resi- dents of the Canal Zone, of that portion of such highway which lies between Mount Hope, Canal Zone and the intersection of such highway with the Canal Zone section of the Trans-Isthmian Highway referred to in the Trans-Isthmian Highway Convention between the United States of America and the Republic of Panama, signed March 2, 1936. Article XI The Republic of Panama agrees, notwithstanding the provisions of Article III of the General Treaty signed March 2, 1936, that the United States of America may extend the privilege of purchasing at post exchanges small items of personal convenience and items necessary for professional use, to military personnel of friendly third countries present in the Zone under auspices of the United States. Article XII The United States of America agrees that, effective December 31, 1956. there will be excluded from the privilege of making purchases in the commissaries and other sales stores in the Canal Zone as well as the privilege of making importa- tions into the Canal Zone all those persons who are hot citizens of the United States of America, except members of the Armed Forces of the United States, and who do not actually reside in the Canal Zone but who are included in the categories of persons authorized to reside in said Zone ; it being understood nevertheless that all personnel of the agencies of the United States of America will be permitted under adequate controls to purchase small articles such as meals, sweets, chewing gum, tobacco and similar articles near the sites of their jobs. The United States of America further agrees that, effective December 31, 1956, and notwithstanding the provisions of the first paragraph of Article IV of the General Treaty signed March 2, 1936, the Government of the Republic of Panama may impose import duties and other charges upon goods destined or consigned to persons, other than citizens of the United States of America, included in class (a) in Section 2 of Article III of said Treaty, who reside or sojourn in territory under the jurisdiction of the Republic of Panama during the performance of their service with the United States of America or its agencies, even though such goods are intended for their own use and benefit. 61 Article XIII The present Treaty shall be subject to ratification and the instruments of ratifi- cation sliall be exchanged at Washington. It shall enter into force on the date of the exchange of the instruments of ratification. In AVitness Whereof, the Plenipotentiaries have signed this Treaty in dupli- cate, in the English and Spanish languages, both texts being authentic, and have hereunto affixed their seals. Done at the City of Panama the 25th day of January 1955. For the United States of America : [seal] For the Republic of Panama : [seal] Memorandum of Understanding Reached In connection with the 1953-1954 negotiations between representatives of the United States of America and the Republic of Panama, which have resulted in the signature of a Treaty between the two countries, the following understand- ings have been reached : On the part of the United States of America : 1. Legislation will be sought which will authorize each agency of the United States Government in the Canal Zone to conform its existing wage practices in the Zone to the following principles : (a) The basic wage for any given grade level will be the same for any em- ployee eligible for appointment to the position without regard to whether he is a citizen of the United States or of the Republic of Panama. (&) In the case of an employee who is a citizen of the United States, there may be added to the base pay an increment representing an overseas differential plus an allowance for those elements, such as taxes, which operate to reduce the disposable income of such an employee as compared with an employee who is a resident of the area. (c) The employee who is a citizen of the United States will also be eligible for greater annual leave benefits and travel allowances because of the necessity for periodic vacations in the United States for recuperation purposes and to maintain contact with the employee's home environment. Legislation will be sought to make the Civil Service Retirement Act uniformly applicable to citizens of the United States and of the Republic of Panama employed by the Government of the United States in the Canal Zone. The United States will afford equality of opportunity to citizens of Panama for employment in all United States Government positions in the Canal Zone for which they are qualified and in which the employment of United States citizens is not required, in the judgment of the United States, for security reasons. The agencies of the United States Government will evaluate, classify and title all positions in the Canal Zone without regard to the nationality of the incumbent or proposed incumbent. Citizens of Panama will be afforded opportunity to participate in such training programs as may be conducted for employees by United States agencies in the Canal Zone. 2. With reference to that part of Article Y of the Treaty signed today which deals with the conveyance to the Republic of Panama free of cost of all the right, title and interest held by the United States of America or its agencies in and to certain lands and improvements situated in territory under the jurisdiction of the Republic of Panama, steps will be taken as provided in this Item. (a) Legislation will be sought to authorize and direct the transfer to the Republic of Panama of all the right, title and interest held by the United States or its agencies in or to the following real property : 1. The J. N. Vialette and Huerta de San Doval tracts in the city of Panama and the Aspinwall tract on the Island of Taboga. 2. Las Isletas and Santa Catalina Military Reservations on the Island of Taboga. This transfer will include the cable rights-of-way which have a width of 20 feet (6.10 meters) and extend between the Ancon Cove Military Reservation 62 and the Santa Catalina Military Reservation, and between the El Vigia Military Reservation and the Las Isletas Military Reservation. 3. The lot in Colon now reserved for consulate purposes. 4. Certain lands on the westerly shores of the city of Colon described roughly as extending from the southerly boundary of the de Lesseps area (4th Street extended) to the Colon-Canal Zone boundary and bounded on the east by the east wall of the old freight house and, below that structure, by a line 25 feet (7.622 meters) west of the center line of the most westerly railroad track. This transfer will include the certain improvements consisting of the old freight house and Colon Pier Number 3. (&) Legislation will be sought to authorize and direct the Panama Canal Com- pany to remove its railway terminal operations from the city of Panama and to transfer to the Republic of Panama free of cost all of the right, title and interest of the Panama Canal Company in and to the lands known as the Panama Rail- road Yard, including the improvements thereon and specifically including the improvements thereon and specifically including the railway passenger station. This action will also relieve the Government of the Republic of Panama of its obligation under Point 10 of the General Relations Agreement between the United States of America and the Republic of Panama signed May 18, 1942 to make available without cost to the Government of the United States of America a suit- able new site for such terminal facilities. (c) With respect to those areas in the city of Colon known as de Lesseps, Colon Beach and New Cristobal (with the exception of two lots in the de Lesseps area which the United States intends to use for consulate purposes), legislation will be sought to authorize and direct the gradual withdrawal from these areas and the conveyance or transfer to the Republic of Panama free of cost of all the right, title and interest of the United States and of its agency, the Panama Canal Company, in and to the lands and improvements thereon. Under this process of gradual withdrawal the United States Government, and/or its agencies, will not be obligated to install any new structure in such areas and, as severable parts of the areas cease to be needed, the lands and improvements would be conveyed or transferred. The severability of parts of the areas depends upon a number of practical considerations including those having to do with the present obligations of the United States, with respect to the subject areas, concerning water and sewerage facilities, street cleaning and paving, water supply, et cetera, as stipulated in the Instrument of Transfer of Water and Sewerage Systems, executed between the Governor of the Panama Canal and the Foreign Minister of Panama on December 28, 1945. (d) With respect to the railroad passenger station and site in the city of Colon, legislation will be sought to authorize and direct the withdrawal from such site and structure at such time as the withdrawal from the areas known as de Lesseps, Colon Beach and New Cristobal, contemplated by the next preceding sub- paragraph, shall have been fully completed, and the conveyance to the Republic of Panama free of cost of all the right, title and interest of the United States and of its agency, the Panama Canal Company, in and to such site and structure. However, the railroad tracks and trackage area in Colon being required for switching purposes serving the Cristobal piers, will be retained for such purposes. (e) All transfers or conveyances of lands and improvements contemplated by this Item, subject to legislative authorization and direction, will necessarily be made subject to any leases which may be outstanding in the respective areas, and will also contain provisions fully protecting the Government of the United States of America against any claims by lessees for damages or losses which may arise as a result of such transfers or conveyances. (/) The transfers or conveyances contemplated by this Item, subject to legis- lative authorization, are in addition to the conveyance of Paitilla Point as spe- cifically covered by Article V of the Treaty signed today, and to the transfer of real property effected by Article VI of said Treaty. 3. Articles, materials, and supplies that are mined, produced or manufactured in the Republic of Panama, when purchased for use in the Canal Zone, will be exempted from the provisions of the Buy American Act. 4. Referring to the exchange of notes dated March 2, 1936, accessory to the General Treaty between the United States of America and the Republic of Panama signed on that date, relative to the sale of ships of goods imported into the Canal Zone by the Government of the United States of America, the United States of America agrees, effective December 31, 1956, and in benefit of Pana- manian commerce, to withdraw wholly from, and thereafter to refrain from, any such sales to ships, provided that nothing in this item shall apply : 63 (a) to sales to ships operated by or for the account of the Government of the United States of America, ( & ) to the sale of fuel of lubricants, or (c) to any sale or furnishing of ships stores which is incidental to the per- formance of ship repair operations by any agency of the Government of the United States of America. 5. Legislative authorization and the necessary appropriations will be sought for the construction of a bridge at Balboa referred to in Point 4 of the General Rela- tions Agreement of 1942. 6. The Uuit'ed States of America agrees, effective December 31, 1956, to with- draw from persons employed by agencies of the Government of the United States of America in the Canal Zone who are not citizens of the United States of Amer- ica and who do not actually reside in said Zone the privilege of availing them- selves of services which are offered within said Zone except thos'e which are essential to health or necessary to permit these to perform their duties. 7. It is said and will continue to be the policy of the Panama Canal agencies and of the Armed Forces in the Canal Zone, so far as permitted under United States legislation, to afford the economy of the Republic of Panama full oppor- tunity to compete for such business. 8. In general connection with the matter of the importation of items for resale in the sales stores in the Canal Zone, it will be the practice of the agencies con- cerned to acquire such items either from United States sources or Panamanian sources unless, in certain instances, it is not feasible to do so. 9. With respect to the manufacture and pressuring of goods for sale to or con- sumption by individuals, now carried on by the Panama Canal Company, it will be the policy of the United States of America to terminate such activities when- ever and for so long as such goods, or particular classes thereof, are determined by the United States of America to be available in the Republic of Panama on a continuing basis, in satisfactory qualities and quantities, and at reasonable prices. The United States of America will give prompt consideration to a request in writing on the part of the Government of Panama concerning the termination of the manufacturers or processing of any goods covered in this Item as to which the Government of Panama may consider the criteria specified in this Item to have been met. 10. Prompt consideration will be given to withdrawing from the handling of commercial cargo for transhipment on Canal Zone piers so soon as Panamanian port facilities are in satisfactory operation in Colon. 11. The United States agrees that the term "auxiliary works" as used in the Treaty includes the Armed Forces of the United States of America. On the part of the Republic of Panama : 1. The Republic of Panama will lease to the United States of America, free of all cost save for the recited consid'eration of one Balboa, for a period of 99 years, two parcels of land contiguous to the present United States Embassy residence site, as designated on the sketch (No. SON-9-54, dated November 19, 1954) and accompanying descriptions prepared by the Comision Catastral of the Republic of Panama, attached hereto. 2. The Republic of Panama assures the Unit'ed States of America that the prop- erty, shown and described on the attached map (No. SON-6-54, dated October 1954) and accompanying description prepared by the Comision Catastral of the Republic of Panama, to front of the United States Embassy office building site and between the Bay of Panama and Avenida Balboa as it may be extended be- tween 37th and 39th Streets, will be preserved permanently as a park and not developed for commercial or residential purposes. 3. So long as the United States of America maintains in effect those provi- sions of Executive Order No. 6997 of March 25, 1935 governing the importation of alcoholic beverages into the Canal Zone, the Republic of Panama will grant a reduction of 75 percent in the import duty on alcoholic beverages which are sold in Panama for importation into the Canal Zone pursuant to such Executive Order. 4. In connection with the authorization granted to the United States of America in Article VIII of the Tr'eaty, the United States shall have free access to the beach areas contiguous to the maneuver area described in said Article VIII for purposes connected with training and maneuvers, subject to the public use of said beach as provided under the Constitution of Panama. The provisions of this Memorandum of Understandings Reached shall enter into force upon the 'exchange of instruments of ratification of the Treaty signed this day by the United States of America and the Republic of Panama. 64 Nicaragua nicaraguan canal route: termination of convention of august 5, 1914 Convention signed at Managua July I4, J970; Ratification advised l)y the Senate of the United States of America February It, 1971; Ratified hy the President of the United States of America February 26, 1971; Ratified by Nicaragua August 10, 1970; Ratifications exchanged at Managua April 25, 1971 ; Proclaimed by the President of the United States of America June 7, 1971; Entered into force April 25, 1971. By the President of the United States of America A proclamation Considering that: The convention between the United States of America and the Republic of Nicaragua for the termination of the convention respecting a Nicaraguan canal route signed at Washington on August 5, 1914, was signed at Managua on July 14, 1970, the original of which convention is annexed hereto ; The Senate of the United States of America by its resolution of February 17, 1971, two-thirds of the Senators present concurring therein, gave its advice and consent to the ratification of the convention ; The convention was duly ratified by the President of the United States of America on February 26, 1971, and was duly ratified on the part of the Republic of Nicaragua ; It is provided in Article III of the convention that the convention shall enter into force on the day on which the instruments of ratification are exchanged : The instruments of ratification of the convention were duly exchanged on April 25, 1971 ; Now, therefore, I, Richard Nixon, President of the United States of America, proclaim and make public the convention of July 14, 1970 between the United States of America and the Republic of Nicaragua to the end that it shall be observed and fulfilled with good faith on and after April 25, 1971, by the United States of Amei-ica and by the citizens of the United States of America and all other persons subject to the jurisdiction thereof. In testimony whereof, I have signed this proclamation and caused the Seal of the United States of America to be affixed. Done at the city of Washington this seventh day of June in the year of our rc A 1 I^ord one thousand nine hundred seventy-one and of the Independence L seal J ^j^^ United States of America the one hundred ninety-fifth. Richard Nixon By the President : John N. Irwin II Acting Secretary of State Convention Between the Government of the United States of America AND the Government of the Republic of Nicaragua The Government of the United States of America and the Government of Nicaragua, desirous of further strengthening the traditional bonds of friendship and cooperation long existing between their two countries, have reexamined the Convention respecting a Nicaragua canal route, signed at Washington on Au- gust 5, 1914, [^] in the light of present circumstances and needs and have con- cluded that the interests of both nations will best be served by terminating the Convention in all its provisions. To this end, the two Governments have agreed to the following articles : article I Upon the entry into force of the present Convention, the Convention between the United States of America and the Republic of Nicaragua respecting a Nica- raguan canal route, which was signed at Washington on August 5, 1914, shall terminate. 1 TS 624 ; 39 Stat. 1661. 65 Article II As a consequence of the termination of the Washington Convention of August 5, 1914, all the rights and options that the 1914 Convention accorded to the Gov- ernment of the United States of America shall cease to have effect as of the date of this convention enters into fores. Article III The present Convention shall be ratified in accordance with the constitutional requirements of the contracting parties, and instruments of ratification shall be exchanged at the city of Managua as soon as possible. The present Convention shall enter into force on the day on which the instruments of ratification are exchanged. In witness whereof the respective plenipotentiaries have signed the present convention. Done in duplicate, in the English and Spanish languages, both equally authentic, at the city of Managua this fourteenth day of July, one thousand nine hundred and seventy. Pour le Gouvernement des Etats-Unis D'Amerique : Robert A. Stein, Charge d' Affaires a.i. Pour le Gouvernement de la Republic Islamique de Mauritanie : Hamdi Ould Mouknass, Ministre des Affaires Etrangeres. COSTS [Provided for the record, Subcommittee on Separation of Powers, Senate Com- mittee on tlie Judiciary, hiearing held July 22, 1977.] Total payments as a result of the 1903 Treaty^ 1. Reflected on company books as title and treaty rights : a. Payment to Republic of Panama $10, 000, 000 b. Payment to individual property owners (depopulation of Canal Zone) 3,965,254 c. Payment to French (land rights) 326, 016 d. Madden Dam Area land rights, 1924-1932 437, 619 Total b through d 4, 728, 889 2. Further payments to French : a. Inventories, salvage credits, other 1, 282, 664 b. Panama Railroad Capital Stock 7, 000, 000 c. Channel costs 31,391,320 Total 39, 673, 984 (Combined with Ic, payments to French total $40,000,000) . 3. Payment to Colombia (not reflected on company books) : Indem- nity to Colombia for loss of Panama 25, 000, 000 4. Payment to Panama for annuity : a. 1913 to 1920 (capitalized as construction costs) 2, 000, 000 b. 1921 to 1951 (dollar value in gold changed, 1933) 10, 990, 000 c. 1952 to 1976 (dollar value in gold changed, 1973 and 1974 ; includes payment by State Department, 1956 to 1976) 43,610,992 Total 56, 600, 992 Total payments to Panama, French, and Colombia $136, 003, 865 1 The figures reported in are actual dollars paid at the time of payment and have not been adjusted to reflect the value of payments in terms of 1977 dollars. Note. — Does not include unrecovered United States' investment in the Canal and Canal facilities except to the extent of $2 million in annuity payments which were capitalized as construction cost during the period of 1913 through 1920. As of October 1, 1977 unre- covered capital investment of the United States in the Panama Canal Company totals $319 million on which interest payments accrue in the approximate amount of $17 million per annum. (69) Department of the Army, Office of the Secretary of the Army, Washington, D.G., September 2, 1911. Information for Members of Congress : Appointments to Board of Directors OF the Panama Canal Company Secretary of the Army Clifford L. Alexander, Jr., today announced the appoint- ment of members for vacant seats on the Board of Directors of the Panama Canal Company, Under the Chairmanship of the Army Secretary, the Board will oversee the operation of the Panama Canal. As Stockholder of the Panama Canal Company, and the President's direct representative to supervise the administration of the Canal Zone Government, the Secretary of the Army appoints members of the Canal Company's Board of Directors. The Board reviews and sets guidelines affecting the operation and management of the Canal and business operations incidental to the Canal's operation and maintenance. Meetings of the Board are held quarterly, normally in Washington. Under the currently proposed Canal treaty dealing with the operation and administration of the Canal, the Panama Canal Company and the Canal Zone Government would be replaced by a new United States Government agency, the Panama Canal Commission. Six months after the exchange of ratification instruments, a new Board of Directors for the Commission would be appointed by the United States. That Board would consist of five United States citizens and four Panamanians and would replace the current Panama Canal Company Board. The Board will be comprised of individuals from various U.S. Government Executive Agencies plus Canal Zone Governor Harold R. Parfitt who, as Presi- dent of the Panama Canal Company, is an ex-oflacio member. The new Board members replace previous Board members whose terms of office ended April 1, 1977. The new Panama Canal Company Board members appointed under provision of the Canal Code are : Hon. Clifford L. Alexander, Jr., Secretary of the Army. Mr. Charles R. Ford, Deputy Assistant Secretary of the Army (Civil Works). Hon. Ersa H. Boston, Commissioner, U.S. Civil Service Commission. Adm. Owen W. Siler, Commandant, U.S. Coast Guard. Hon. Anthony M. Solomon, Under Secretary of Treasury for Monetary Affairs. Hon. Terence Todman, Assistant Secretary of State for Inter-American Affairs. Hon. Richard N. Cooper, Under Secretary of State for Economic Affairs. Hon. David E. McGiffert, Assistant Secretary of Defense for International Se- curity Affairs. Furnished by: OflBce, Chief of Legislative Liaison. [Sent by United States Embassy in Panama to the State Department on Oct. 26th. 1976] Tags : ECON, EFIN. Subject : Panama's recession is structural — a result of low productivity. 1. This message is part of a continuing series of mission economic studies of the State of the Panamanian economy and projections for its future. 2. Summary : Panama's recession, which deepened during the first half of 1976, is either cyclical nor primarily a product of economic conditions outside Panama. In our view the economy is floundering mainly because its high cost output is not competitive in the world market and few opportunities exist for available private investment. To establish a basis for renewed subtainable growth will require actions that lead to lower costs and improved productivity. These could include easing the labor code, reducing subsidies, boosting domestic savings, and directing resource flows more toward the international service sector where Panama has natural advantages, however, most such actions would cut back social benefits granted to the working classes under the "revolu- (71) 99-592—78 6 72 tion," and might not be politically acceptable under the present government, inflows of foreign capital have not been getting at the core problem of high costs (low productivity). Lack of access to relevant Canal Zone sites is delaying GOP development of infrastructure which is prerequisite to the growth of various commercial services industries by the Panamanian private sector. End summary. 3. Economic conditions in Panama worsened steadily during the 1976 first half. There were decreases from a year ago in key indicators — manufacturing, construction, external trade, unemployment, (increase), and sales to the Canal Zone (see reftel), overall growth is likely to be near zero for 1976. 4. Failure of the economy to respond to a variety of stimulants indicates that the recession is more than a cyclical maladjustment. Credit has remained rela- tively plentiful, with preferential rates available from the government for both agricultural and industrial projects. There are tax subsidies for new exports, and tax benefits for reinvested profits. No basic changes have been made in the "rules of the game" under which business operates, such as the labor code or tax laws, since before the onset of recession, in fact, the GOP in recent months has actively sought by various direct means to improve the business climate. A large boost iu 1975 public sector spending had little effect on either private investment or aggregate demand. 5. Also, Panamanian economic problems do not seem to be caused primarily by worldwide economic trends or world trade. In contrast to Panama's con- tinuing decline, other developing countries (LDC's) have been exi)eriencing a quickening economic tempo so far this year in response to rapid recovery by the industrialized countries, plus some correction of structural maladjustments, LDC exports have been generally increasing as a part of the marked improve- ment in 1976 first half world trade (plus 10 percent) while the value of Pana- manian exports remained at its 1975 level (excluding an abnormal decline in petroleum products exports), changes in Panama's economy also differed from the worldwide pattern both during the 1974-75 world recession and the years immediately preceding it. Despite sharp 1974-75 recession among the industrial- ized countries (zero growth), LDC's, gross domestic product (GDP) increased 5.5 percent in 1974 and 1.7 percent in 1975. Growth had begun tapering off in 1971 whereas during 1971-73 the rest of the world including Latin America experienced unprecedented boom. 6. Private investment in Panama reached a peak in 1971. Growth in manufac- turing began to fall off in 1971 with a decline in the number of attractive import substitution possibilities, little increase has subsequently taken place in the vol- ume of manufactured exports, output of both construction materials and inter- mediate goods stopped expending in 1973. Expansion of construction activity began slowing in 1972 and has actually been declining since 1974. Imiwsition of rent controls in 1973 brought private investment in low cost housing to a stand- still. On the other hand, growth of the important services sector remained near 8 percent annually through 1974 (plus 3 percent in 1975) due in part to the major expansion of the foreign banking sector since 1971, growth in agricultural output has remained sluggish since 1970 at about 3 percent annually, much slower than during the 1960's. 7. Panama's basic economic weakness in our view and the reason behind cur- rent stagnation is its non-competitiveness in the world market — a structural problem involving primarily high cost production (coupled with a lack of resources) in both agriculture and industry. The export potential for Panamanian agriculture is extremely limited at present, the main exports, bananas, is in the hands of foreign plantation operators, and has probably reached its peak in an increasingly competitive world market. In general, land is of poor quality and farm labor costs are high — the $3 per day minimum wage is estimated to be at least double the rate anywhere else in Central America. The government encour- ages high cost production, including rice, the principal crop, by subsidizing pro- ducers through support prices typically set above the world market. Thus, Panama cannot profitably export major crops such as rice and corn and is further precluded from developing any profitable export potential for various lesser crops by the small domestic market base in Panama. Accessible forests have been cut over and there is little potential for meat exports while access to the U.S. market is restricted. Panama's sugar industry is likewise non-competitive due to high costs of both cane production and refining operations. 8. As with agriculture, Panama's manufacturing industry currently has little export or overall growth potential because of high production costs coupled with a dearth of natural resources (copper deposits have not yet been determined to be economically exploitable). Minimum wages and the general wage and benefit structure in Panama are estimated to be the highest in Central America and 73 among the highest in all Latin America. Higher wages and benefits in the Canal Zone exert upward pressure on wages in the republic as employers compete for the generally better qualified workers attracted by Zone wages. The dominance of the service sector in Panama's central urban areas with its higher sliill levels also creates upward pressure on the entire wage and benefit structure. Employee benefits under Panama's labor code add to direct employment costs. The code exerts indirect pressures on costs through subsidies such as firing restrictions imposed on employer and, by strengthening the trade union movement, bolsters the trend toward costlier contract settlements. High labor costs encourage the substitution of capital for labor, thus boosting structural unemployment through- out the economy. Also, relative capital costs — mostly foreign sourced— are likely to rise as Panama's already high debt service burden worsens and the economic outlook for other LDCs improves relative to Panama. 9. Establishing the basis for renewed growth and improved economic well being that can be sustained will require actions that lead to a lower cost struc- ture. One widely discussed possibility is an easing of the labor code, although its real impact on costs remains uncertain (it did not bring on recession although it may have stood in the way of needed private sector adjustments). Changes probably would not induce an immediate surge of private investment, however, the business community has made clear its conviction that changes are essential, giving them an additional psychological importance that bears importantly on the general investment climate. Changes might be a convincing sign of GOP con- cern over the private sector's economic plight. 10. Appropriate belt tightening also could include lowering subsidies as well as the wage/benefit structure to reduce relative production costs, and increasing personal taxes to curb consumption (particularly imports) and expand domestic savings. These effects are usually achieved indirectly by currency devaluation. Since Panama's currency is the U.S. dollar, such actions must be taken directly, in addition, resources may need to be more heavily concentrated in the interna- tionally-based services sector where Panama has more natural advantages, with proportionately less in agriculture and the non-productive social sectors. 11. Comments : (A) Panama's high wages, subsidies, and consumer imports — together with a moderate tax burden and little public saving — permit a standard of living which no longer appears to be supportable by Panama's inefficient domestic production. (B) Increased external financial flows per se, regardless of concessionality, permit Panama to defer grappling with the core problem of low productivity until a later date when the problem will probably have worsened, unless such financing bears specifically on some aspect of costs. Indeed, much of the capital iufiow of the past three years has aggravated Panama's economic malaise by exacerbatng its debt service burden without enhancing overall productivity. Moreover, total inflows greatly exceeded the current account deficit of Panama's balance of payments, resulting in large negative "errors and omissions" (aroimd $100 million annually) most of which probably represented outflows of domesti- cally-owned capital. (C) The types of actions mentioned above for addressing Panama's high cost structure run headlong into the "revolution" — the social and economic benefits granted to the urban and rural working classes over the past eight years which would need to be reversed in party in short, the "evolution" has collided with growth and one or the other must yield, whether or not actions of suflicient scope to be economically meaningful along the above lines are politically possible for the present government is questionable. (D) Panama's best economic prospects lie in the development of its potential as a sub for servicing international commerce, various aspects of cargo handling are an essential part of the picture. Thus, the GOP has a valid case in tirging early access to relevant canal zone sites needed to develop the infrastructure on which growth of various transport, storage and other commercial services. Memorandum to : Eng. Demetrio B. Lakas, President of the Republic, Presidency of the Republic. From : Nicolas Ardito Barletta, Planification Minister. Matter : Financial perspectives for 1977. The purpose of this Memorandum is to call attention to the financial basis upon which will be defined the budget policy of 1977 thus permitting to show the pertinent limitations that are being detected in this year's budget. (a) The current revenues should increase between B/ 43.6 million and B/ 44.2 million with respect to this year's revised income fig-ures thus reaching totals of 74 B/ 339.7 million or B/ 338.3 million; dependent on whether or not there is a recuperation in the economic activity during the last six months of this year. ( Z) ) The increase in current revenues assumes an economc upturn of 3 percent and an inflation rate of 5 percent throughout 1976. (c) It also assumes a B/ 21.0 million package increase of taxes which should not interfere significantly in the desired economic recuperation process. (d) The technical group involved in this evaluation has concluded that the fol- lowing are the tributary measures that would fill the above requirements : A consumer tax designed in such a manner as to minimize its effect on prices and on lower income groups. This type of taxation tends to divert private ex- penditure towards investments, thus stimulating economic development. Reform import duties in order to replace specific value taxes by value added duties. This measure will adjust the increase of tax income to the increased cost of imported goods, and will thus help to stimulate internal production. Limit the tax deduction permitted on interest paid for mortgage loans used to buy homes for one's personal use. Consolidate the progressive tax structure for corporations into one tax rate in order to avoid the use of numerous companies to lower the effective tax rate. (e) At the same time, operational expenses are estimated to increase from between B/ 50.3 million and B/ 50.7 million and will reach totals of B/ 340.6 million or B/ 341.0 million, depending on how the economy is reactivated during the second semester of this year. (/) The fact that the increase in revenues will be inferior to the increase in expenses suggests that there will virtually be no new recourses to augment the coverage of public services. (g) The significance of the rigidity to which the new budget elaboration will be subjected will be understood when one observes that only B/ 3.1 million will correspond to net reincorporations of previousy frozen expenditures, while the remaining B/ 47.2 million correspond to commitments of an obligatory nature. (h) These commitments of an obligatory nature can be broken down in the following manner : (1) From between B/ 42.3 million to B/ 42.7 million for servicing the foreign debt which [servicing] will increase from between B/ 87.5 million to B/ 129.S million or B/ 130.2 mllion in 1977, depending on whether or not the economy recuperates during the last semester. Interest will increase from between B/ 24.8 milUon or B/ 25.2 million, depending on the above observation, while the amortizations will be increased by B/ 17.5 mllion. Due to the tendency required to service the foreign debt, its ratio in respect to current revenue increases from 29.6 percent to between 38.2 percent and 39.0 percent which significantly deterio- rates our capacity for further indebtedness. (2) B/2.3 million of the amortization of salaries are for: Education — B/1.4 million. Health — 0.4 million. Housing — 0.1 million. Other institutions — 0.4 million. (3) B/1.3 million of current transferences which reflex the increase in subsidy to the National University, the payment of Balboa notes subscribed to BID and the increased consumption of water. (4) E/0.4 million in salary increases to : Health— 0.3 million. Government and Justice, Labor — . Presidency — 0.1 million. (5) B/ 0.3 million for the XIII the month of public functionaries. (6) B/ 0.2 million for inclusion in the MIDA budget for personnel frozen in its investment portion of said budget and for the hiring of new auditors for the Finance Ministry. (7) B/ 0.4 million in order to bolster the supply budget of the Health Ministry and other compulsory expenditures. (i) Since, for the above reasons, all other expenses must be maintained at the budgeted fiscal 1976 level, it is convenient to eliminate from the budgeting proc- ess all programed budgeting meetings in order that the respective institutions and our analyst can dedicate the most amount of their time possible to formulate, evaluate and turn in punctually their budget by program. (j) As to the Central Government contribution towards the public investment program, we calculate that it will be B/ 78.0 million which represents an in- 75 crease of B/ 18.0 millior over B/ 60.0 million that is estimated will have been contributed this year. (k) As a result, the global deficit will be between B/ 131.9 million and B/ 138. 7 million, depending on how well the economy recuperates during the second semester. ( 1 ) To finance this deficit we will require B/ 15.6 million from the Venezuelan investment Fund B/ 5.0 million in Internal Bonds, and from B/ 111.3 million to B/ 118.7 million from the private banks. (m) Thus, the amounts that must be financed as v/ell as the amounts that must be obtained, create very concrete problems w^hich in turn reiterate the need to increase expenses and investments only in those areas of an obligatory nature and to dedicate the most of time possible to the conscientious elaboration of a budget by programs in order to execute the largest possible amount of services required by our society with the scarce resources that are available. {,11) On the one side, the required new financing of between B/ 131.9 million and B/ 138.7 million implies that there will be pressure on the liquidity and sol- vency of the National Bank which must provide the Central Government the monetary resources while the 3 previously mentioned financial operations can be formalized, all of which should take at least four months. During this period, the National Bank will have to recur to its lines of credit as well as to its internal reserves which have been practically saturated during the present year by having to finance the global deficit of B/ 99.3 million which in turn is between B/ 32.6 million and B/ 39.4 million less than what has been estimated for 1977. (n) On the other hand, we feel it will be extremely diflScult to syndicate loans with the commercial banks in the amounts previously mentioned, taking into account that during the present fiscal period we must contract for a total of B/ 323.6 million with those sources, who in turn have become more demanding each time than an accord has to be finalized. Besides, the relation between servicing the debt and current revenues of between 38.9% and 39% suggest a deteriorated capacity to service this debt and thus will increase the risk as realized by the lending institutions. (o) In short, 1977 lines up as extremely delicate due as much to current ex- penses increasing more than current revenues, as well as to the amount and struc- ture of the new financing that must be contracted which reaches the limits avail- able to the Nation as such. (p) As a result of the above, I respectfully request your backing in eliminating the budgeting meetings and in demanding from the institutions that they pay the most attention to formulating and elaborating a budget by program. Also, I ratify the need for you to back the approval and execution of the taxing measures that we have presented for your consideration, once that we have finalized the pertinent studies. With by highest consideration and appreciation. The Library of Congress, Congressional Research Service. Washington, D.C., July 21, 1977. To : Subcommittee on Separation of Powers. Attention : Quentin Crommelin. From : Economics Division. Subject: U.S. Commercial Bank Loans to the Government of Panama. As we have discussed on the telephone, we are enclosing photocopies of different materials pertinent to the above-mentioned subject. There is a statement by Henry C. Wallich, Member, Board of Governors of the Federal Reserve System, dated March 23, 1977, to the House Subcommittee on Financial Institutions of the Committee on Banking, Finance and Urban Affairs, which includes a table on claims of U.S. banks on various foreign countries, including Panama. We have also included a June 3. 1977 Federal Reserve press release which has tables on U.S. bank claims on selected foreign countries in 1976. Panama is in- cluded in the section on offshore banking centers on page 5 of the tables. Another source in the Federal Reserve indicated that foreign branches of U.S. hanks had claims of $1,886 billion on Panama at the end of 1976, while the March 1977 Treasury Bulletin indicated that domestic oflSces of U.S. banks had $886 million in short and long-term claims against Panama as of that date. Of this 76 amount, only 13% were long-term claims. Adding the two figures results in $2,772 billion in claims on Panama by U.S. banks and their foreign branches. This appears to be the number used by Governor Wallich in the attachment to his statement. We are also including a photocopy of the World Debt Tables, Volume II, p. 117, which shows the external public debt position of Panama. Unfortunately, the table includes data only up through 1974. Conversation with a World Bank offi- cial revealed that 1975 and 1976 figures are in the process of compilation and some results are expected by the end of next week. If you would like further assistance on this matter, please do not hesitate to contact us on 426-5750. David Hoyt, Analyst in Banlcing and Capital Markets. The Library of Congress, Congressional Research Service. Washington, B.C., July 28. 1977. To : Senate Judiciary Committee, Subcommittee on Separation of Powers. From : Economics Division. Subject : Further information on loans to Panama. As we have discussed on the telephone, we have been able to gain some further information on the availability of data on U.S. bank loans to the Government of Panama. In conversation with a Federal Reserve official, it was learned that they do not have information available which gives a distinction by type of borrower for foreign loans from U.S. banks. They do have a figure for borrowing by banks and official institutions in Panama from the head office of a U.S. bank. This figure, however, is not available over the telephone and is obtainable only "through nor- mal channels". Information on loans made from individual U.S. banks is. in some instances, known by the Federal Reserve, but is regarded as confidential informa- tion and was not released to us. The World Bank provided us with some preliminary data on the external debt of the entire Panamanian public sector. At the end of 1975. loans outstanding and actually disbursed by foreigners to Panama totaled $767.9 million, with $58.7 million accounted for by Panamanian branches of offices of private, foreign-owned banks. The corresponding figures for 1976 were $1.0909 billion and $129.4 million. The 1976 figure for Panamanian public sector borrowing, disbursed or undisbursed was $1.4085 billion. David Hoyt, Analyst in Banlcing and Capital Markets. STATEMENTS OPIXIOX OF ATTORNEY GENERAL GRIFFIN B. BELL Office of the Attorney General, Washington, D.C., August 11, 1977. The Honorable the Secretary of State. My Dear Mr. Secretary : Your letter of July 23, 1977, requests my opinion, in connection with the negotiation of a new Panama Canal treaty, on a question in- volving the treaty-making power of the President and its relation to the power of Congress to dispose of territory or property belonging to the United States. The question is whether a treaty may dispose of territory or property belong- ing to the United States absent statutory authorization. I The Constitution provides that the President shall have power to make trea- ties with the advice and consent of the Senate, if two-thirds of the Senators present concur (Article II, section 2, clause 2) ; and it provides further that treaties made under the authority of the United States shall be the "supreme law of the land.'' Article VI, clause 2. At the same time, the Constitution gives Congress a number of specific powers that bear upon matters commonly subjected to the treaty power. I need men- tion but a few : pursuant to Article I, section 8, Congress has power to regulate foreign trade, to provide for the protection of rights in useful inventions, to make rules governing captures on land and water, to establish a uniform rule for naturalization, and to punish offenses against the law of nations ; and, of course, pursuant to Article IV, section 3, Congress has power to dispose of territory or property belonging to the United States. Moreover, there is authority for the proposition that Congress has general power, quite apart from these spe- cific powers, to enact legislation relating to foreign affairs. United States v. Curtiss-W right Export Corp., 299 U.S. 301 (1936) ; Perez v. Brownell, 356 U.S. 44 (1958). A question that arose very early in our constitutional history was whether the existence of these congressional powers limits the powers of the President and the Senate to make law by treaty.^ If a treaty touches a matter that Con- gress has power to regulate, can the treaty be given the force and effect of law, in and of itself, if Congress has not enacted legislation putting it into effect? The question you raise is one aspect of that general question. II I shall make two observations with respect to the general issue. First, from the earliest days of the Republic the decisions of the Supreme Court have pro- vided convincing support for the proposition that a treaty, unaided by an act of Congress, has the force and effect of law even if it touches a matter that is within the legislative jurisdiction of Congress. Indeed, the Court has held that a treaty, of its own force, may supplant prior acts of Congress to the extent that its enforcement may require that result. Cook v. United States, 288 U.S. 102 (1933). The seminal case, United States v. TJie Schooner Peggy, 1 Cranch 103 (1801), was decided in an opinion by Chief Justice Marshall. During the undeclared 1 Indeed, the question arose in connection with the debate over the very first treaty made under the Constitution, the Jay Treaty with Great Britain. The treaty provided for the creation of certain commissions and therefore required an appropriation of funds. President Washington, together with other Federalists, including Hamilton and Chief Justice Ellsworth, took the view that the treaty, of its own force, created an indispen- sable obligation as a matter of domestic law, and that Congress was required to appro- priate the necessary funds. JeflFerson. Madison, and other Republicans took the view that neither the Jay Treaty nor any other treaty could regulate matters that were within the legislative jurisdiction of Congress. See 1 C. Butler, The Treaty-Making Po'cer of the United States 422 et seq. (1902) ; S. CrandaU, Treaties Their Makinp and Enforcement 165 et seq. (2d ed. 1916) ; 1 W. Willoughbj/, The Constitutional Law of the United States o49 (2d ed. 1929). Jefferson reiterated the Republican view in his Manual of Parlia- meyitarii Practice. See L. Henkin, Foreign Affairs and the Constitution 141 et seq. (1972) [hereinafter cited as Henkin]. (79) 80 naval war with France, Congress enacted a statute that authorized the President to grant commissions to public vessels, with instructions that they should seize armed French vessels on the high seas, bring them to our ports, and subject them to condemnation in the courts of the United States. Act of July 9, 1798, c. LXYIII, 1 Stat. 578. In 1800 the American ship Trumhull, sailing under a com- mission issued pursuant to the statute, seized an armed French vessel, the schooner Peggy, and brought her to port. A proceeding was then instituted against the Peggy ; and after a sentence of condemnation was entered in the court below, an appeal was taken to the Supreme Court. During the pendency of the appeal President Jefferson, with the advice and consent of the Senate, concluded a treaty with France. The treaty provided, among other things, that vessels that had been seized by either nation should be ''mutually restored" if they were not yet "definitively condemned." Thus, when the case of the Peggy came before the Court, the question was whether the treaty controlled the disposition of the prize. If it did. the schooner was to be restored to France. If it did not, the schooner was to be condemned, under the statute : and the proceeds were to be distributed equally between the United States and the officers and men of the Trum'bull. The Court held that the treaty controlled. It was a law of the United States, not by virtue of any act of Congress, but by virtue of the command of the Consti- tution itself : and it had intervened during the appeal to change the statutory rule that had governed the decision below. Because the sentence of condemnation was not yet final, the schooner was not yet "definitively condemned," and it was therefore subject to the treaty. The schooner was to be restored to France. 1 Cranch at 109-10. Implicit in the decision was the elementary proposition that the President, with the advice and consent of the Senate, had power to make a self-executing treaty affecting the disposition of a vessel captured at sea even though Congress had power to make rules (and had in fact made a conflicting rule) governing the same subject matter. The Court expressed no doubt whatever about the constitution- ality of the treaty. In the years that followed this decision the Supreme Court gave "self-execu- ting" effect to numerous treaties that disposed of matters that Congress had power to reaulate. See, e.g.. Hi jo v. Vnited States, 194 U.S. 315. 323-24 (1904) (claims against the United States) : Cook v. United States, 288 U.S. 102, 118-19 (1933) (customs inspections) ; Bacardi v. Domenech, 311 U.S. 150, 161 (1940) (trademarks) ; see generally Henkin, supra, note 1, at 149. Today, as a result of these and other decisions, it could not be successfully maintained, as a general proposition, that the treaty power stops where the power of Congress begins. On the contrary, the Court has said that the treaty power, operating of itself and without the aid of congressional legislation, extends to all proper subjects for negotiation between our Nation and others. Asaktira v. City of Seattle, 265 U.S. 332 (1924) . The lesson of history is that these "proper subjects" include many that are within the legislative jurisdiction of Congress. My second observation is related to the first. I have suggested that the two powers — the power of Congress to legislate and the power of the President and the Senate to make "self -executing" treaties — may overlap. I do not mean to sug- gest that they are coextensive. They are both created by the Constitution, and they are both subject to the fundamental limitations that are imposed there- under ; - but the limitations that apply to the one do not necessarily apply to the other. The treaty power may extend to subjects that are beyond the legislative jurisdiction of Congress. Missouri v. Holland, 252 U.S. 416 (1920). Similarly, the President and the Senate may be powerless to accomplish by treaty what the Congress can accomplish by statute. I shall elaborate briefly upon the latter point. Some lower courts' and many serious students of the law * have expressed the view that certain matters are 2 In Reid V. Covert, 354 U.S. 1 (1957), Mr. Justice Black stated the apph cable rule : "The prohibitions of the Constitution were designed to apply to all branches of the National Government." including the Congress, the Executive, and the Executive and Sen- ^^^^iS^e^^e^g!^/ Turner Baptist Missionary Union, 24 F. Cas. 344 (No. 14251) ^^*Sohn^C ■^Caflloun was of opinion that a treaty could not authorize a withdrawal of funds from the Treasury. 29 Annals of Congress 531-32 (1816). In 1949 the Secretary of State Dean Acheson." expressed the view a treaty could not put the United States into war. Oniv Congress could declare war. Hearings on the North Atlantic Treaty Before the Senate Ccmmittee on Foreign Relations, Slst Cong., 1st Sess., pt. 1, at 11 (1949). hee generally Henkin, supra, note 1, at 159. 81 subject to regulation by Congress only ; and that a treaty, if it purports to deal Avith such a matter, can be given effect only to the extent that it may be authorized or implemented by statute. The two matters that are frequently mentioned in this regard are the raising of revenue and the appropriation of funds. The Con- stitution provides that "all" bills for raising revenue "shall" originate in the House (Article I, section 7, clause 1), and, further, that "no" money shall be drawn from the Treasury except in consequence of "appropriations" made by law (Article I, section 9, clause 7). In the face of these provisions the opinion expressed by some is that a treaty purporting to require the establishment or alteration of a revenue measure, or a treaty purporting to require an appropria- tion of funds, ci^uld not be effective, as a matter of domestic law, in the absence of statutory authorization or implementation. I find it unnecessary to deal with that issue in order to answer the question you have put to me. I now turn to the question at hand. Ill The point of departure is the broad principle that was laid down in Geofroij V, Riggs, 133 U.S. 258 (1890), and w^as repeated in Asakiira v. Citij of Seattle, 265 U.S. 332 (1924), to which I have alluded above: the treaty power extends to all proper subjects for negotiation between our Nation and others ; and when a treaty purports to do so, it acts ex proprio vignre, without the aid of legislation, and is effective for all purposes, provided it does nothing that is forbidden by the Constitution. Does the Constitution forbid the President and the Senate to make self-execut- ing treaties disposing of territory or property belonging to the United States? I have taken note of the opinion, held by some, that the Constitution entrusts certain matters to Congress alone. In my opinion, however, the disposition of territory or property belonging to the United States is not such a matter. In my view, territory or pi'operty belonging to the United States may be disposed of by miction of the President and the Senate under the treaty clause. There are at least four considerations that support this conclusion, and I shall discuss them briefly below. First, the fact that the Constitution gives Congress power to dispose of territory or property belonging to the United States does not suggest that the President and the Senate have no power to do so under the treaty clause. This was the implicit teaching of Marshall's decision in the Peggii and of the cases that followed. The existence of power in Congress does not imply an absence -of power under the treaty clause. On the contrary, the one proposition of which we can be certain is that many of the powers that are given to Congress are shared l)y the President and the Senate when they act. under the treaty clause, to conclude and effectuate bona fide international agreements. I think it follows that if one were to hold that the power to dispose of territory or property belonging to the United States resides in Congress alone and is distinguishable in that respect from the numerous powers that are shared, one would be obliged to find some basis for the distinction either in the text of the Constitution or in the history of the relevant provisions. I find none. The language of Article IV, insofar as it confers upon Congress the power of disposition, is identical to the language of Article I, which confers upon Congress numerous powers that may be exercised by the Pre«:ident and the Senate through self-executing treaties. Article IV says that Congress "shall have power" to dispose of territory or property belonging to the United States, just as Article I says that Congress "shall have power" to regulate foreign commerce, to make rules governing captures on land and water, and so forth. Article IV goes on to say that Congress shall have power to make "all" needful rules and regulations respecting territory or property. As in the case of Article I. however. Article IV does not say that the powers it confers — the power to dispose of territory or property, and the power to make rules and regulations respecting it — shall reside in Congress alone. The record of the proceedings during the Constitutional Convention supports the interpretation that is suggested by the language of the Constitution itself. The territory and property clause of Article IV was adopted during a general discussion of the role that the central government should play in connection with the territorial claims that had been asserted by the several States with respect to the western lands. In the course of the discussion there was no suggestion wiiatever that the purpose or effect of the clause was to give Congress exclusive power to authorize or implement international agreements disposing 82 of territory' or property. See 2 M. Farrand, The Records of the Federal Conven- tion of 1181 457-59, 461-66 (rev'd ed. 1937) [hereinafter cited as Farrand]. The history of the treaty clause is even more conclusive. During the course of the convention several proposals were put forth. One would have required every treaty to be approved by both Houses of Congress. 2 Farrand, supra, at 532, 538. That proposal was rejected. Another would have required the Senate to concur in treaties, but would have exempted peace treaties from that require- ment, except for peace treaties depriving the United States of territory or territorial rights. 2 Farrand, supra, at 533-34, 543. That proposal was rejected as well. In its place, the convention adopted a proposal that required the Senate to concur in all treaties. It may be possible to interpret these actions in a different way, but the simplest and, for me, the most persuasive interpretation is this : the delegates to the con- vention assumed (1) that the treaty power could and would extend to questions of territory, and (2) that treaties, including treaties affecting rights in territory, could be effective in the absence of action by both Houses.^ This brings me to the third consideration that supports my basic conclusion. To the extent that the Supreme Court has spoken to the question, the Court has said that the President, with the concurrence of the Senate, may conclude a treaty disposing of territory or property belonging to the United States, and that such a treaty may convey good title to the territory or property in question. No act of Congress is required. United States v. Brooks, 10 How. 442 (1850) ; Doe V. Wilson, 23 How. 457 (1859) ; Holden v. Joy, 17 Wall. 211 (1872) : Best v. Polk, 18 Wall. 112 (1873) ; Francis v. Francis, 203 U.S. 233 (1906). The dictum in Holden v. Joy is one of the clearest statements of this principle: "[I]t is insisted that the President and Senate, in concluding such a treaty, could not lawfully covenant that a patent should be issued to convey lands which belonged to the United States without the consent of Congress, which cannot be admitted. On the contrary, there are many authorities where it is held that a treaty may convey a good title to such lands without an act of Congress conferring it. * * * [17 Wall, at 247]." I do not hold that these cases provide a sufficient answer to the question you have raised. They all involved Indian treaties and questions of "title" to real property. I do think, however, that the principle for which they stand is one of general application ; that it bears upon your question ; and that it supports the conclusion I have reached. These cases, when viewed in light of the textual and historical considerations I have already mentioned, provide substantial support for the proposition that a treaty disposing of territory or property belonging to the United States may be self-executing. I find no cases to the contrary. Finally, my conclusion is supported by historical practice. While I do not suggest that the commands of the Constitution may be attenuated by persistent practices not in conformity with them, I must observe that as a matter of histori- cal fact the President and the Senate have made self-executing treaties disposing of territory or property belonging to or claimed by the United States. I shall mention one rather clear example of the practice. Under the Florida Treaty with Spain (1819) the United States ceded all its territory beyond the Sabine River in Texas to Spain in return for the cession of the Spanish territories of East and West Florida. 8 Stat. 252, T.S. No. 327. While there had been some dispute over some of the relevant boundaries, the congressional debates, as well as President Monroe's annual message to Congress, make it clear that many considered the action to be an outright cession of American territory in exchange for Spanish territory. 36 Annals of Congress 1719-38. 1743-__ ; 2 Richardson, Messages and Papers of the Presidents 33 (1896). No statute authorizing the American cession was ever enacted." 5 T should notp that this very point wns considered In the State conventions that were called to ratify the new Constitution. The ohiection was made that the treatv clause crave the President and the Senate power to alienate territory. The Virjrinia and North Carolina conventions proi)osed a remedial amendment that would have required every treaty cpdins: or compromisInjD: rights or claims of the United States In territory to be approved hy three-fourths of the memhers of both Houses of Co^ifyress. 2 Documentnrif Hi.tton/ of fl'e Consfitufion 271, .^.92 (in U.S. Conp. Doc. Ser., No. 4185) ; see generally S. Crandall, Treaties Their Making and Enforcement 220-21 (2d ed. 1916). « The self-executincr effect of the Spnni.ecial Concrress "power to dispose." There is no evidence In the records of the Convention that the Framers intended in any way to curtail that power, or to give the President a share in it. Were the matter less clear, we should yet "prefer a construction which leaves to each element of the statute a function in some way diflTerent from the others" to one which causes one section to overlap another. United States v. Dinerstein, 362 F. 2d 852, 855-856 (2d Cir. 1966). 87 Constitution, is in terms unlimited except by those restraints which are found in that instrument against the action of the * * * departments * * Only the treaty power is "expressed" ; Geofroy does not call for express restraints — it suffices that they can be found in the Constitution. The "implied exclusion" is "found" in the Constitution by virtue of the express grant of disposal power to Congress under the rule of express mention, and of the fact that the general treaty power is limited by the special Congressional power of disposition. These principles are reflected in the Supreme Court's statement in Sioux Trihe of Indians v. United States: "Since the Constitution places the authority to dispose of public lands exclusively in Congress, the Executive's power to convey any interest in the lands must be traced to Congressional delega- tion of its authority." To this the State Department responds that Sioux Trite "did not deal with the relation between the treaty power and the Congressional power under Article lY, Section 3, cl. 2;" Hansell labeled it "dicta."" By this test the Hansell- Erickson collection of dicta falls to the ground, for almost all were not uttered in the context of that relation. The executive branch employs a double standard — what is dictum when the language is unfavorable to it becomes Holy Writ when the dictum reads in its favor. Erickson, for example, tells us that: "Jones against Meehan is cited as an example by reason of the quote and the language there, which it seems to me is of significance, irrespective of the particular facts involved." Messrs. Erickson and Hansell can not have it both ways. In truth, dicta carry little weight when a particular issue has not been decided. Chief Justice Marshall dismissed his own dicta in Mariurif v. Madison when they were pressed upon him in Cohens v. Virqinia, 19 U.S. 264, 399 (1821). on the ground that dicta do not receive the careful consideration accorded to the question "actually before the court." The statements here quoted respecting "exclusivity" carry weight because they reflect traditional canons of construction. The foregoing considera- tions should suffice to dispose of a number of other Hansell-Erickson arguments for "concurrent jurisdiction," but I shall consider them for the sake of complete- ness. To escape from the exclusivity of Congress' disposal power Mr. Erickson argues, "To begin with. Article IV, Section 3, clause 2. uses the same terminology, "Congress shall have power," as Article I, Section 8, which in our opinion, permits treaty provisions relating to such matters to be self-executing [i.e., with- out Congressional action], at least to the extent that the inherent character of the power or other constitutional provisions do not make the power exclusive to Congress." Erickson's qualification is a concession that some Article I powers can not be concurrently exercised by the President. The Department of State Concedes that "treaties may [not] impose taxes." -° Why is that power more "inherently" exclusive than such other Article I, Section 8 powers as the power to establish post offices, to provide and maintain a navy, to declare war, to coin money, etc., all of which manifestly can not be exercised by treaty. Erickson proves too much. Second, he urges, "Article IV, Section 3. clause 2, is included in a portion of the Constitution which deals with the distribution of authority between the Federal and State governments. It does not purport to allocate powers exercisable by Congress or pursuant to treaty." ^ But Section 3 (2) unmistakably does "allocate powers exercisable by Con- gress" : "The Congref^ shall have power to dispose of . . . property belonging to the United States." Hansell argues that the placement of the property article in clause 4 . . . provides strong evidence that the property clause does not restrict the treaty power." ^ That the "placement of a power in one or another Article is without significance for its scope is readily demonstrable: (a) "Con- gress shall have power to declare the punishment of treason" is located in the '-•Hansen 4: 133 U.S. 258, 267 (1890), emphasis added. One migrht with equal force arprne that no limitation on Congress' "power to dispose" is "expressed" in Article IV. ^« 316 TT.S. 317. 326 (1942). Turner v. American Baptist Missionary Union, 24 Fed. Cas. (No. 14. 251) 344. 346 (C. Ct. Mich. 1852) : "Without a Inw the president is not authorized to sell the puhlic lands * * * The [Indian] treaty, in fact appropriated the ahove tract of 160 acres for a particular purpose, but, to efifectuate that purpose, an act of congress was passed." 17 Hansell 27. 22. " Erickson 105. 19 Td. 97. 20 Hansell 25. Erickson 97. 22 Hansen 4-5, emphasis added. 99-592—78 7 88 Judiciary Article III; (b) Congress' po\yers to make "exceptions and regula- tions" respecting the Supreme Court's appellate jurisdiction is lodged in Article III, Section 2; (c) Tlie provision that "Congress may detei-mine the time of choosing the electors" is placed in the Executive Article II, Section 1(4). Does this authorize the President by treaty to declare the punishment of treason, to regulate the Court's appellate jurisdiction, or to interpose in the choice of electors? Whether located in Article I or Article IV, "Congress shall have power" means one and the same thing — the power resides in Congress, not in the President. It needs constantly to be borne in mind that the President has circumvented Senate participation in treaty-making by alRxing the label "Execu- tive Agreements" to treaties, without constitutional warrant,-^ so that claims made on behalf of the Senate and the President can be turned to his own advantage. Mr. Hansen also attaches significance to the close linkage between the Article IV "power to dispose" and "the power to make all needful rules and regulations" respecting the TerritoiT or other property belonging to the United States, and cites Geofroy v. Riggs for the proposition that "the treaty power can be used to make rules and regulations governing the territory belonging to the United States, even in the District of Columbia." "* Geofroy presentcMi the question whether a citizen of France could take land in the District of Columbia by descent from a citizen of the United States. Local law withheld the right, but in keeping with national solicitude for protection of citizens abroad, a treaty provided for reciprocal rights of inheritance in such circumstances for citzens of both signatories. In consequence the treaty overroowered the President to set aside land west of the Mississippi for the reception of such tribes as chose to emigrate, and to "exchange'' such lands with any tribe.^® The 1830 act served to ratify the Act of 1828. and "rati- fication is equivalent to original authority" ^' : "It is well settled that Congress may * * * 'ratify * * * acts which it might have authorized' * * * and give the force of law to official action unauthorized when taken." ^ Although the sub- sequent 1833 and 1835 treaties differed in some particulars from the authoriza- tion, the purpose was the same — "to induce the Indians * * * to emigrate and 17.") U.S. at 12, emphasis added. 3" Id. 21. See infra Appendix. 32 Erickson 97 : Hansell 22. 33 Quoted bv Hansell 'j-Q : 84 U.S. at 247. 3* r//e Passenger Cases, 4S U.S. (7 How.) 283, 470 (1849), dissentinjr opinion. 3-' 84 T'.S. at 2.^7. 2.38. 241. 38 Id. 245. 238-239. ^ Wilson V. Shaw, 204 U.S. 24, 32 (1907). ss Sicayne tt- Hoyt, Ltd. v. United States, 300 U.S. 297, 301-302 (1937). 90 settle in tlie country long before set apart for that purpose." ^ When, therefore, the Court, speaking to the contention that the President and the Senate "could not lawfully covenant that a patent should issue to convey lands which belonged to the United States without the consent of Congress," stated that "a treaty may convey to a grantee a good title to such lands without an act of Congress confer- ring it," it was making a statement that was unnecessary to the decision, because Congress had authorized the conveyance. As to other treaties, Hansell tells us, "the precedents look two ways." Some have been "contingent upon congressional authorization." The "precedents sup- porting the power to dispose of property by treaty alone," he states, "can be found in the boundary treaties with neighboring powers, especially in the treaties between the United States and Great Britain of 1842 and 1846 for the location of our northeast and northwest boundaries. * * *" Settlement of boundary disputes are not really cessions of United States property. The Oregon boundary dispute proceeded from an inflated claim : "Fifty-Four Forty or Fight" ; the British, on the other hand, claimed land down to the forty second parallel. Only when the dispute was settled by treaty — at 49 degrees — could either party con- fidently assert that it had title.*^ Consequently, as Samuel Crandall, a respected commentator, stated, "A treaty for the determination of a disputed line operates not as a treaty of cession, but of recognition." " Among other examples of alleged treaty transfers of property, Hansell instances the return to Japan of the Ryukyu Islands.** By Article III of the 1951 Treaty of Peace with Japan, the United States received the right to exercise "all and any powers of administration, legislation and jurisdiction over the territory and inhabitants of those islands. * * *" While Japan renounced, in Article II, "all right, title and claim" to various territories, it made no similar renunciation with respect to the Ryukyus.^ Quoting the Legal Advisor of the State Depart- ment, that "sovereignty over the Ryukyu Islands * * * remains in Japan * * *", a District Court stated that '"Sovereignty over a territory may be transferred by an agreement of cession," but it concluded that there had been no cession.*^ The Fourth Circuit Court of Appeals quoted a statement by Ambassador John Foster Dulles, a delegate to the Japanese Peace Conference, that the aim was "to permit Japan to retain residual sovereignty," and held that the treaty did not make "the island a part of the United States, and it remains a foreign country for purposes of" the Federal Tort Claims Act.*" "In the history of transfers of property to Panama," Hansell tells us, "we have had a mixed practice." *' By the 1903 Panama Convention, Panama granted to the United States "all the rights, power and authority within the Zone . . . which the United States would possess if it were the sovereign of the territory ... to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority . . ." The words "if it were sovereign" signal an intent to stop short of a cession of sovereignty. That is confirmed by an Opinion of the Attorney General. Considering the Tariff Act levy of duties on articles imported "into the United States or into any of its possessions," he stated that "the Canal Zone is not one of the possessions of the United States within the meaning of that term as used by Congress in the tariff act, but rather is a place subject to the use, occupation, and control of the United States for a particular purpose." " In Luckenhaeh S.S. Co. v. United States, Chief Justice Taft stated, "Whether the grant in the treaty amounts to a complete cession of territory and domination to the United States or is so limited as to leave titular sovereignty in the Republic of Panama, is a question which has been the subject of diverging opinions," which he found it unnecessary to decide.^ and is therefore still open. Instead he relied on a "long continued course of legislation and administrative action [that] has oper- ated to require that the ports in the Canal Zone are to be regarded as foreign ports within the meaning" of the Act governing the transport of "mail between the United States and any foreign port," itself a hint that the Panama Treaty is no more a cession than the Japanese Treaty respecting the Ryukyus. 3» 84 U.S. at 240. Hansen 6. «i S. E. Morison. "Oxford History of the American People" 538. 546-547 (1965). *- S. Crandall. "Treaties, Their Making and Enforcement" 226 (2d ed. 1916). Hansell 6. ** ^ U.S.T. .SI 60. .•'.172. .S173. United 8tnte>i v. I'shi Shirowa, 12.'? F. Sunp. 145. 149. 148 (D. Hawaii, 1954). Burna v. United States, 240 F. 2d 720. 721 (4th Clr. 1957). *- Hansell 7. Quoted HearlnpTS, supra n. 1, Part I, p. 5, emphasis added. «»27 Op. Atty. G<-n. 594. 595 (1909). 280 U.S. 173. 177-178 (1930). " Id. 178. 91 It does not follow, however, that the interests of the United States do not con- stitute "property of the United States." The grant of "use and occupation ... in perpetuity" constitutes "property" no less than the familiar lease of reality for 99 years. Then there are the installations that cost billions of dollars. Disposition of these no less requires the consent of Congress than does that of territory. In 1942, the President by Executive Agreement promised to transfer certain installa- tions to Panama subject, however, to Congressional approval.^" A similar provi- sion is to be found in the Treaty of 1955.^ These are executive constructions that speak against Messrs. Hansell and Erickson. In sum, Messrs. Hansell and Erickson have failed to make out a case for "con- current jurisdiction" with Congress in the disposition of United States property. If the President is to fly in the face of the express "power of Congress to dispose" it must be on a sounder basis than the arguments they have advanced. In my judgement, the Panama Treaty should contain a provision making it subject to approval of the Congress. Appendix I Holden v. Joij: Its citations for treaty power to dispose of property. A. "RESERVE" CASES (TITLE REMAINS IN INDIANS) (1) United States v. Brooks, 51 U.S. (10 How.) 442 (1850). Indian cession to United States ; supplement to treaty provided that Grappe's representatives "shall have their right to the said four leagues of land reserved to them * * *" (450, 451). Held: treaty "gave to the Grappes a fee simple title to all the rights the [Indians! had in these lands * * *" (460). (2) Doe V. Wilson, 64 U.S. (23 How.) 457 (1850). Indian treaty ceded land to United States, making reservations to individual Indians. "As to these, the Indian title remained as it stood before the treaty was made : and to complete the title to the reserved lands, the United States agreed that they would issue patents to the respective owners." (461-462). (3) Creics v. Burcham, 66 U.S. <1 Black) 352 (1861). Cession by Indians with reserves (355). "The main and controlling questions involved in this case were before this court in the case of Doe v. Wilson, 23 How. 457 * * *" (356). (4) Mitchel v. United States. 34 U.S. (9 Pet.) 711 (1835). Prior to the Spanish cession of Florida to the United States, the Indians had made a cession to Spain, "reserving to themselves full right and property" in certain lands. (749). Held : "by the treaty with Spain the United States acquired no lands in Florida to which any person had lawfully obtained" title. (734, 756). Issue: title of purchaser from Indians to reserved lands. (5) The Kansas Indians, 72 U.S. (5 Wall.) 737 (1866). Treaty exchange of lands; Indians reserved lands for each individual (739, 741). Issue: was such land taxable by Kansas. B. IRRELEVANT CASES (1) Meigs v. McClung, 13 U.S. (9 Cranch) 11 (1815). Held: land claimed from defendants did not lie within territory ceded to the United States bv the Indians. (17). (2) Wilson V. Wall, 73 U.S. (6 Wall.) 83 (1967). Treatv provided that cer- tain Indians would be entitled to 640 acres for self, and additional acres, roughlv speaking, for each child. (84). Issue: whether an Indian held land governed by the latter clause in trust for his children. (86). Court said "Congress has no constitutional power to settle the rights under treaties except in cases purely political," (89) the clause quoted in Holden v. Joy. The reason, it explained, was that "The Construction of them is the peculiar province of the judiciary * * *" id. In other words, interpretations of treaties is for the courts. (3) Ameriean Insurance Co. v. Canter. 26 U.S. (1 Pet.) 511 (18''8) Insurer brought a libel in the District Court. South Carolina, to obtain restitution of 356 bales of cotton carried by ship that was wrecked on the Florida coast A Florid-i territorial court had earlier awarded 76% salvage to salvers, who sold the Canter (o40). Issue: did the territorial court have jurisdiction. No mention of grant by United States. ^3 "When thp authority of the 'Congress . . . shall have been obtained therefore Agreement of May 18, 1942. 59 Stat. (Pt. 2) 12S9 ^uimuK^u luererore . . . "Agreement of January 25, 1955, 6 U.S.T. 2273, 2278. 92 (4) Worcester v. Georgia, 31 U.S. (6 Pet.) 515 (1S32). Worcester, a white missionary was convicted of residing within Indian territory without a State license. The treaty with the Indians placed them under the protection of the United States, gave it the sole right of "managing all their affairs." Held : the Georgia act can have no force in the Indian territory. (561). (5) Foster v. Xeilson, 27 U.S. (2 Pet.) 253 (1829). Re grants made in the ceded territory b.v Spain prior to January 24, 1815. the article provides "that those giants shall be ratified and confirmed like Indian "reserves * * * the ratification and confirmation which are promised must be bv the Act of the Legislature," i.e. Congress. (314-315). II Some additional Hansell citations for power to disi)ose by treatv. (1) Reid V. Covert, 354 U.S. 1 (1957). Military Code provided for trial by court martial of *'all persons . . . accompanying the armed forces" of the United States in foreign countries. Wife of Army Sergeant convicted by court martial in England of his murder. Held : Bill of Rights requires jury trial after indict- ment. (2) Asaknra v. Seattle, 265 U.S. 322 (1924). Seattle ordinance restricted pawn- ship license to United States citizen. (339-340). Japanese attacks as violation of treaty provision : citizens or subjects of each signatory "shall have liberty * * * to carry on trade, wholesale and retail * * * upon the same terms as native cit- izens or subjects * * *" (340). Held: can't deny the Japanese equal opportunity. (a42). (3) Santovicenza v. Egari, 284 U.S. 30 (1931). Italian subject dies in New York, leaving no heirs or next of kin. (351). Italian consul claims under "most favored nation" treaty clause. Held: The treaty-making power is broad enough" to cover "the disposition of the property of aliens dying within the territory of the respective parties * * *" Any "conflicting law of the State must yield." (40). Ill Some additional Erickson citations for self -executing treaty conveyances. (1) Francis v. Francis, 203 U.S. 233 (1906). Indian treaty ceded land to United States, but reserved certain tracts for use of named persons. (237). Quotes Jones V. Median: when treaty makes "a reservation of a specified number of sections of land * * * the treaty itself converts the reserved sections into in- dividual property * * *" (238). It was in these circumstances that the Court said, "a title in fee may pass by treaty without the aid of an act of Congress, and without a patent," (241-242) the reason being that title to the reserved land remained in the Indians. (2) Best V. Polk, 85 U.S. (18 Wall.) 112 (1873). By Indian treaty "reservations of a limited quantity [of land] were conceded to them. (113). One section "had been located to an Indian." (113. 116). Thereafter, the United States issued a patent to James Brown. Held (117), "the Indian reservee was held to have a preference over the subsequent patentee." Addendum to Statement by Raoul Berger Before the SuBCOMZiiiTTEE on Separation of Powers of the Committee on the Judiciary, November 3, 1977 The statement by Attorney General GriflSn B. Bell (hereafter cited as A. G.) before the Senate Foreign Relations Committee, September 29, 1977, reached me on Saturday afternoon, October 29. 1977, too late for inclusion of my com- ments in the body of my statement. Only three points made by the Attorney General seem to me to call for additional comment, and of these I shall speak in turn. I The Percheman Case The Attorney General cites Vmted States v. Percheman, 32 U.S. (7 Pet.) 511, 88-89 (1833) to prove that "the Court held self-executing certain clauses of the Florida Treaty with Spain which related to the regulation of property rights in newly acquired territory." A. G. at p. 10. At the cited pages it appears that Article 8 of the treaty provided, "all the grants of land made })efore the 24th of January, 1818, by his Catholic Majesty * * * in the said territory ceded by his 93 Lajesty to the United States, shall be ratified and confirmed to the persons in ossession of the lands * * *" . , ^ This Article, Chief Justice Marshall remarked, "must be intended to stipulate xpressly for that security of private property which the laws and usages of ations would, without express stipulation, have conferred * * * Without it Article 8), the title of individuals would remain as valid under the new govern- lent as they were under the old * * * the security of (pre-existing) private roperty was intended by the parties * * *" In short, the treaty provided that prior Spanish grants to private i)ersons lould be ratified and confirmed, a provision far removed from presidential regulation" of public territory. Moreover, Foster v. Neilson, 27 U.S. (2 Pet.) 53. 314-315 (1829), a case cited by the xVttorney General (A. G. at p. 3), held ith respect to the self-same provision that "the ratification ,and confirmation hich are promised must be by the Act of the Legislature," i.e. Congress. The itation to Percheman illustrates why I approach an Attorney General's state- lent with something less than awe. II Remarks in the Legislative History of the Constitution (1) The Attorney General asserts that "(the members of the Convention were Lilly aware of the possibility that a treaty might dispose of the territory or prop- i-ty of the United States." (A. G. at p. 5). He begins with the remark of eorge Mason in the Constitutional Convention : "The Senate by means of a •eaty might alienate territory etc. without legislative sanction." A. G. at p. 6 ; 2 arrand 297. This was during a debate on a resolution that "Each House shall ossess the right of originating bills," when Mason seconded Strong's motion ) "except bills for raising money for the purposes of revenue, or for appro- riating the same." The Senate, said Mason, "could already sell the whole ouiitry by means of Treaties," plainly an extravagant overstatement, made at a me when the treaty was not under discussion. His "alienate territory" remark lay merely represent a strategic retreat from his untenable "sell the whole >untry" remark. There follow a group of utterances that have reference to boundary disputes, i.e. onfiicting claims to ownership to be settled by treaties of peace. (2) When the treaty power was under discussion, Williamson and Spaight loved "that no Treaty of Peace affecting territorial rights should be made wlth- ut concurrence of two thirds of the [members of the Senate present]." A.G. at .6:2 Farrand 543. Similarly, Gerry, speaking for a greater proportion of votes n "treaties of peace", said that here, "the dearest interests will be at stake, as he fisheries, territories, etc. In treaties of peace also there is more danger to lie extremities of the Continent of being sacrificed than on any other occasion." A.G. at p. 6 : 2 Farrand 541. The "extremities of the Continent" has reference boundary disputes which do not really involve territory owned by the United tates. (3) "Sherman and Morris proposed but did not formally move," the Attorney reneral states, "the following proviso. 'But no treaty (of peace) shall be made rithout the concurrence of the House of Representatives, by which the terri- Di'ial boundaries of the United States may be contracted * * *' " A.G. at p. 6 : 4 Farrand 58. Farrand adds that "The subject was then debated, ut the motion does not appear to have been made." Id. Why was the motion ot made after debate? Presumably, the matter was postponed for consideration rlien Article IV, Section 3(2) would come up for discussion. During this subse- uent discussion of "The Legislature shall have power to dispose of * * * the erritory * * it is singular that no mention w^as made of an exception for isposition under the treaty power. 2 Farrand 466. Non-mention is the more emarkable because such an exception would carve out an area of undefined aagnitude from the power conferred, a matter which would affront the demo- ratically minded who placed their faith in the House. It seems more reasonable o infer from the history that Article IV, Section 3(2) was designed to set at est the fears that territory might be ceded without the concurrence of the louse. (4) The Attorney General cites an amendment proposed by the Virginia Ratifi- ation Convention as exhibiting the "awareness of the Founding Fathers that he Constitution authorizes self-executing treaties disposing of the territory and ►roperty of the United States" : "No commercial treaty shall be ratified without he concurrence of the members of the Senate [not merely of those present] : and 10 treaty ceding, contracting * * the territorial rights or claims of the United '94 states * * ♦ shall be made, but in cases of extreme necessity ; nor shall any such treaty be ratified without the concurrence of three-fourths of the whole number of the members of both Houses respectively." A.G. at p. 7 : 3 Elliot. Debates on the Federal Constitution 660. The Attorney General's reading paradoxically transforms Virginia's anxiety to have greater safeguards, i.e. three-fourths of both Houses rather than the bare majority that satisfies Article IV, into an argument for excluding the House altogether. Like the earlier remarks, the Virginia proposal testifies to the importance that the Founders attached to the disposition of territory — no cession except "in cases of extreme necessity" — and it counsels against reading the equivocal *'treaty- making" to encroach upon the "power to dispose" that requires the vote of both Houses, not merely the Senate. In any event, it may be asked, should the post- Convention view of one State be permitted to override the plain terms of Article IV. (5) Hugh "Williamson, a delegate to the Convention, wrote to Madison some nine months after its close, to recall to him, "a Proviso in the new System which was inserted for the express purpose of preventing a majority of the Senate * * * from giving up the Mississippi. It is provided that two-thirds of the members present in the Senate shall be required in making treaties * * *." A.G. at p. 7-8; 3 Farrand 306-307. The Mississippi presented a gnawing boundary question which threatened the expansion of the West and was only settled by the Louisiana Purchase. Boundary treaties do not really involve the disposition of territory or property of the "United States but the adjustment of conflicting claims, even when some believe their claims to be more valid than those of the opposing party. To my mind, the history is at best inconclusive: the remarks quoted by the Attorney General are confined to adjustment of boundary disputes, with one exception, by treaties of peace. Treaties of peace present si>ecial problems, and such citations do not add up to general concurrent jurisdiction over the dispo- sition of government territory or property. To go beyond such territorial adjust- ments collides with the rationale of Pierson v. Ray, 386 U.S. 547, 554-555 (1967). With respect to the common law immunity of judges from suit for acts performed in their oflScial capacity, the Court declared, "We do not believe that this settled principle was abolished by Section 1983. which makes liable 'every person' who under color of law deprives another of his civil rights * * * we presimie that Congress would have specifically so provided had it wished to abolish the doctrine." Thus, the all-inclusive "every person" was held not to curtail an existing common law immunity in the absence of a specific provision. The more equivocal treaty-making power demands an even more exacting standard. Before it be concluded that it in any way diminishes the explicit grant to Congress of "power to dispose" of territory, a clearly expressed intention to do so is required. That requirement is not satisfied by the random remarks collected by the Attorney General. The Attorney General concedes that, "the specific power granted to the House of Representatives and Congress in fiscal matters (Article I, Section 7, clause 1 and Article I, Section 9. clause 7, money bills and appropriations power) pre- clude making treaties self-executing to the extent that they involve the raising of revenue or the expenditure of funds. Were it otherwise. President and Senate could bypass the power of Congress and in particular of the House of Repre- sentatives over the pursestrings." A.G. at p. 4-5. Xow, sections nine and seven are couched in quite dissimilar terms. One. Section 9(7). is framed in terms of flat prohibition: "No money shall be withdrawn from the Treasury but in consequence of appropriations made by law * * *." Section 7(1), on the other hand, merely provides that "All bills for raising revenue shall originate in the House." Yet, the Attorney General reads Section 7(1) to preclude the President and Senate from "bypass- [ing] the power of Congress and in particular of the House of Representatives over the pursestrings." What is there that distinguishes "All bills * * * shall originate in the House" from "The Congress shall have power to dispose * * *."? The impalpability of the distinction is underlined by the State Department's concession tliat "treaties may \not] impose taxes." Nothing in this Article T, Section 8(1) "The Congress shall have power to lay and collect taxes" dis- tinguishes it from the Article IV "The Congress shall have power to dis- pose * * *". If the President may not by treaty "bypass" the power of the House to origi- nate revenue-raising bills, or the power of Congress to tax, no more may he "bypass" its "power to dispose" of the territory and property of the United States. Statement of Charles E. Rice, Professor of Law, University of Notre Dame Law School, Before the Committee on the Judiciary, U.S. Senate, Novem- ber 3, 1977 It is clear that the property ceded by the United States in the Panama Canal Treatv is "Territory or other Property belonging to the United States," within the meaning of Art. IV, Sec. 3, cl. 2, of the Constitution. Article 2 of the 1903 treaty between the United States and the Republic of Panama "grants to the United States in perpetuity the use, occupation, and con- trol of a zone of land and land under water for the construction, maintenance, operation, sanitation, and protection of said canal." Article 3 of that treaty "grants to the United States all the rights, power, and authority within the zone mentioned and described in article 2 of this agreement, . . . which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters were located, to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority." ' It is interesting to compare the language of the 1903 treaty with the earlier treaty of 1846 between the United States and the Republic of New Granada, the predecessor in ownership of the Isthmus of Panama to Colombia and the Republic of Panama. In Article 35 of that treaty the United States undertook to guarantee "the rights of sovereignty and property" of the Republic of New Granada over the Isthmus. [9 Stat. 881 ; see Moore, a Digest of International Law (1906). Vol. Ill, 5-6] The 1903 treaty, by contrast, is strong in the affirma- tion of sovereign authority in the United States. In Wilson v. Shaw, 204 U.S. 24, 27 S. Ct. 233. 235 (1907), the Supreme Court declared. "It is hypercritical to contend that the title of the United States is imperfect, and that the territory described does not belong to his nation, because of the omission of some of the technical terms used in ordinary conveyances of real estate." As the Fifth Circuit Court of Appeals held in United States v. HusMnd R. (Roach) [453 F.2d 1054, 1057, 1059 (5th Cir., 1971), cert. den. 406 U.S. 935 (1972)1, "The Canal Zone is an unincorporated territory of the United States" to which applies the power of Congress to "make all needful Rules and Regulations respecting the Territory or other Property belonging to the United State.«j." Congress, said the court, has "plenary power over the Canal Zone." The controlling question, however, is whether the grant of power to Congress to dispose of the territory and property of the United States is exclusive or concurrent. If the grant is concurrent, that is, if it may be exercised by the Executive as well as Congress, then it would be proper for the Executive to make a self- executing treaty disposing of such property without the necessity of implement- ing legislation by Congress. If, however, the grant of such power is exclusively to Congress, the treaty would not be self -executing and such implementing legis- lation would be necessary. The power of disposition provided in Article IV, Sec. 3, clause 2, does not explicitly exclude concurrent power of disposition in the Executive. Also, Article IV generally deals with the relations between the states and the government of the United States. In this respect, the Supreme Court has consistently ruled that the Congressional power is controlling over state legislation. [See Annotation, 49 L. Ed.. 1239, 1248] In sustaining the Wild Free-Roaming Horses and Burros Act, the Supreme Court stated in 1976 that "we have repeatedly observed that "[t]he power over the public lands thus entrusted to Congress is without lim- itations." United States v. San Francisco, 310 U.S. at 29. [Kleppe v. Xetv Mexico, 426 U.S. 529, 539 (1976)] In Wisconsin Railroad Co. v. Price County, [133 U.S. 496, 504 (1890)], the Supreme Court said, "The Constitution vests in Congress the power to 'dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.' And this implies an exclusion of all other authority over the property which could interfere with this right or obstruct its exercise." And in Utah Poiver and Light Co. v. United States [243 (95) 96 U.S. 3S9, 404 (1916)], the Court said: "Not only does tlie Constitution (Art. IV, Sec. 3, cl. 2) commit to Congress the power "to dispose of and make all needful rules and regulations respecting" the lands of the United States, but the settled course of legislation, congressional and state, and repeated decisions of this court have gone upon the theory that the power of Congress (to dispose of United States property) is exclusive and that only through its exercise in some form can rights in lands belonging to the United States be acquired." There is no Supreme Court decision clearly deciding whether a treaty dispos- ing of property must be submitted to the entire Congress for approvel. Nor is there any definitive Supreme Court ruling as to whether the power to dispose of territory and property, in Art. IV, Sec. 3, cl. 2, is exclusive in Congress or con- current with the Executive. Nor do the debates in the Constitutional Convention and the actions of the state ratifying conventions provide any clear guidance on these points. There was some incidental discussion but nothing conclusive. George Mason, in arguing that the House of Representatives alone should have the right of originating revenue bills, argued rhetorically that the Senate "could already sell the whole country by means of Treaties" and that "the Senate by means of treaty might alienate territory, etc., without legislative sanction." [Farrand, Records of the Federal Convention, II, 297] However, it is interesting that such an enormous power in one house of Congress excited little agitation among the delegates. There is no clear indication as to the Convention's mind on the relation between the treaty power and Congress' power to dispose of property. Attorney General Griffin B. Bell, in his statement before the Senate Foreign Relations Committee on September 29, 1977, emphasized that the Ratifying Con- vention of Virginia proposed the following amendment to the Constitution : "7th. That no commercial treaty shall be ratified without the concurrence of two-thirds of the whole number of the members of the Senate ; and no treaty ceding, con- tracting, restraining, or suspending, the territorial rights or claims of the United States, or any of them, on their, or any of their rights or claims to fishing in the American seas, or navigating the American rivers, shall be made, but in cases of the most urgent and extreme necessity ; nor shall any such treaty be ratified without the concurrence of three-fourths of the whole number of the members of both houses respectively." Elliot, "Debates on the Federal Constitution," Vol. 3, p. 660. Attorney General Bell argues from this that the Founding Fathers were aware ••that the Constitution authorizes self-executing treaties disposing of the terri- tory and property of the United States." But this conclusion is unwarranted. The same amendment was proposed by the North Carolina Convention [United States : Formation of the Union (Govt. Printing Office, 1927), 1048] The proposals are fully consistent with the interpretation that the assent of Congress is required to a treaty alienating United States territory. The first clause of the proiwsed amendment asks merely that commercial treaties be ratified by two-thirds of all the Senators rather than by two-thirds of the Senators present. The following restriction, that treaties ceding United States territory shall require ratifica- tion by three-fourths of all the members of both Houses is fully consistent with an interpretation that any treaty alienating United States territory already re- quired consent of both houses. What the Virginia and North Carolina conven- tions sought to do was to fasten on those treaties a requirement for a virtually prohibitive majority, three-fourths of all the members of both houses. One can- not draw from this the conclusion that, because those proposed amendments were not adopted, therefore the House of Representatives is entirely excluded from the process of alienating United States territory by treaty. The treaty power is very broad but it is not unlimited. "There is nothing in 'the treaty power' which intimates that treaties and laws enacted pursuant to them do not have to comply with the provisions of the Constitution." [Rcid v. Covert 354 U.S. 1, 16 (19.57) ] In Hnlden v. Joy, the Supreme Court noted "there are many authorities where it is held that a treaty may convey to a grantee a good title to [lands belonging to the United States] without an act of Congress conferring it, and that Congress has no constitutional power to settle or interfere with rights under treaties, ex- cept in cases purely political." [Holfloi v. Joy, 17 Wall. (84 U.S.) 211, 247 (1872) ] The authorities cited by the Court for tliis proposition are distinguishable. More importantly, this statement of tlie Court was only a dictum as tlie Court said, "it is not necessary to decide the question in this case, as the treaty in question 97 has been fully carried into effect, and the provisions have been repeatedly recog- nized by Congress as valid." [Ibid.] In AsaJcura v. Seattle, 256 U.S. 332, 341 (1924), the Supreme Court said. "The treaty-making power of the United States is not limited by any express provision of the Constitution, and, though it does not extend 'so far as to authorize what the Consitution forbids,' it does extend to all proper subjects of negotiation be- tween our government and other nations." The Court also noted that the treaty in that case "operates of itself without the aid of any legislation, state or na- tional ; and it will be applied and given authoritative effect by the courts." But the treaty involved in Asakura was one recognizing the right of Japanese sub- jects to "carry on trade" in the United States. It did not involve in any way the power to dispose of United States property granted to Congress in Art. TV, Sec. 3, cl. 2, of the Constitution. In Geofroy v. Riggs, 133 U.S. 258 (1890), a convention with France guaranteed the right of French citizens to inherit property in the United States. The Court held that the convention prevailed over the contrary law of Maryland so as to authorize the inheritance by a French citizen of property in the District of Columbia. "The treaty power, as expressed in the Constitution, is in terms un- limited except by those restraints which are found in that instrument against the action of the government or its departments, and those arising from the na- ture of the government itself and of that of the States. It would not be contended that it extends so far as to authorize what the Constitution forbids, or a change in the character of the government or in that of one of the States, or a cession of any portion of the territory of the latter, wathout its consent. Fort Leavenworth Railroad Co., v. Lowe, 114 U.S. 525. 541. But with these exceptions, it is not per- ceived that there is any limit to the questions which can be adjusted touching any matter w^hich is properly the subject of negotiation with a foreign country. Ware v. Hi/lton, 3 Dall. 199; Chirac v. Chirac, 2 Wheat. 259; Havenstein v. Lyn- ham, 100 U.S. 483 ; 8 Opinions Attys. Gen. 417 ; The People v. Gerke, 5 California, 381." However, while the convention was in effect. Congress adopted the Maryland law as the law^ of District of Columbia, but suspended that law insofar as it con- flicted with the convention. This amounted to a clear adoption by Congress of the terms of the convention. More significantly, the Geofroy case did not involve the transfer of any property owned by the United States. The dictum in the Geofroy case is very broad but its generalizations should be limited to the facts of that case. While judicial decisions do not comprehensively define Congress' property dis- posal power in relation to the treaty power, there are several instances where the accepted practice among the Congress, Executive and the Judiciary, has sup- ported the conclusion that Congress' power is exclusive. INIany treaties and executive agreements with Indian tribes have involved the transfer of real property. But even w^here the treaty or executive agreement conveyed to the Indians the land in fee simple, which is the maximum interest which has been conveyed to Indian tribes, it appears that such land was held by the Indians subject to the power of the United States to exercise eminent domain. In Cherokee Nation v. Southern Kansas R. Co., (135 U.S. 641 (1890)), the Su- preme Court noted : "The fact that the Cherokee Nation holds these lands in fee simple under patents from the United States, is of no consequence in the present discussion ; for the United States may exercise the right of eminent domain, even within the limits of the several states, for purposes necessary to the execution of the powers granted to the general government by the Constitution. ^ ^ ^ sjs ^ sfc sjc "The lands in the Cherokee territory, like the lands held by private owners everywiiere within the geographical limits of the United States, are held subject to the authority of the general goveniment to take them for such objects as are germane to the execution of the powers granted to it ; provided only, that they are not taken without just compensation being made to the owner. [135 U.S. at 656-57]" In Sioux Tribe of Indians v. United States [316 U.S. 317 (1942)], the Supreme Court ruled that the Sioux did not obtain a compensable interest in lands granted to them by executive order so as to entitle them to payment where the lands were restored to the public domain by a later executive order. The Court was of the opinion that "executive order reservations" did not grant a compensable 98 interest to the Indians. Such an interest was granted only in reservations made by "treaty or statute." In the latter eases, the power of the Executive depended on congressional approval : "Since the Constitution places the authority to dis- pose of public lands exclusively in Congres.«5, the Executive's power to convey any interest in these lands must be traced to Congressional delegation of its author- ity." [316 U.S. at 326] The Indian treaties cannot be regarded as authority for the conveyance of United States property to a foreign power by treaty without Congressional au- thorization. Even where those treaties or agreements conveyed a fee simple in- terest, that interest remained subject to the United States power of eminent •domain. And even the conveyance of that interest, according to the Sioux case, required a Congressional delegation of authority to the Executive. It follows that the complete and total surrender of sovereignty involved in the Panama Canal Treaty should require Congressional action even more strongly than the Indian treaties. Another illuminating type of case from past experience is the sort of treaty involving settlement of boundary claims. For example, the Webster-Ashburton Treaty of 1842, ceded land to Great Britain which had been under dispute. [8 Stat. 572] Congress implemented the treaty by appropriating money to carry out the terms. [See Ch. 89, 5 Stat. 623] The 1846 Oregon Treaty also involved the cession to Great Britain of United States claims to land then in dispute. [9 Stat. 869] Congress implemented the treaty by passing an act to organize the government of the Oregon Territory. [9 Stat. 323] The Alaska Treaty of 1903 [32 Stat. 1961] established a tribunal to settle boundary disputes with Great Britain. The tribunal awarded some of the dis- puted territory to the United States and some to Great Britain. [See Bemis, A DiplomatiG History of the United States (1965), 427] Congress implemented the treaty by appropriating funds to carry it out in 1903. [32 Stat. 1083] The Chamizal Convention with Mexico in 1963 provided for the transfer of certain lands to Mexico. The convention provided : "After this convention has entered into force and the necessary legislation has been enacted for carrying it out, the two Governments shall * * * determine the period of time appropriate for the Government of the United States to complete the following: (a) The acquisition, in conformity with its laws, of the lands to be transferred to Mexico." [15 U.S. T. 2] Congress thereafter enacted legislation to authorize the Secretary of State "to acquire by donation, purchase, or condemnation, all lands required for trans- fer to Mexico as provided in said convention" and "to convey or exchange to Mexico properties acquired." [78 Stat. 184] The major point to be made about boundary dispute treaties is that they are different from the Panama Canal Treaty which does not involve disputed land. Where there is a colorable claim to full ownership and sovereignty presented by both parties to a settlement treaty, it cannot be said to involve an unambiguous transfer of "Territory or other Property belonging to the United States", within the meaning af Art. IV. Sec. 3, cl. 2. Those boundary settlement treaties, even were they found to be lacking in Congressional approval, are not controlling on the Panama Canal Treaty issue. The Lend-Lease program, instituted in 1940, involved the transfer of United States property to Great Britain. However, Attorney General Robert Jackson, in his opinion to the President, found that there was "ample statutory authority" for the disposal. Tt was therefore unnecessary to relv on Presidential authority alone. [39 Op. A.G. 484, 488 August 27, 1940] In 1972, a treaty went into effect for the transfer by the United States to Japnn of all rights and interests it had received to the Ryukyu and Daito Islands by the 1951 Treaty of Peace with Japan. However, as Secretary of State Rogers pointed out in testimony before the Senate Foreign Relations Committee, the Japanese retained under the 1951 Treaty of Peace "residual sovereignty." More- over, the transfer pursuant to that treaty seems to have been authorized by the Japan-United States Friendship Act of 1975. [22 I'.S.C. 2901 (a)(2)] In 1897, Attorney General John W. Griggs issued an opinion on the alienation by the President or Secretary of War of United States property in Puerto Rico to a private person. The Attorney General said, "there is no legislation by Con- gress made for or properly applicable to the public domain in Puerto Rico. The power to dispose permanently of the public lands and public property in Puerto Rico rests in Congress, and in the absence of a statute conferring such power, 99 cannot be exercised by the Executive department of the government." [22 Op. Atfy. Gen. 544, 545 ( 1899 ) ] With respect to the Panama Canal Zone itself, the 1942 Congressional proceed- ings involving an executive agreement transferring land and property in the Canal Zone to Panama are instructive. The transfer was effected by executive agreement which was then submitted to both houses for approval. It was objected by some Senators that it should have been done by treaty. iSenator Connally, Chairman of the Senate Foreign Relations Committee, responded to these objections : Those who are opposing the measure object because the matter is brought before the Senate in the form of a joint resolution. They say it should be in the form of a treaty. Mr. President, I am and have been and in the future shall continue to be ardent in my maintenance of the integrity and the rights of the Senate of the United States in all its proper functions as a branch of the Government ; but the matter covered by the joint resolution has to be passed l)y the Congress sooner or later in some form, for the simple reason that under the Constitution of the United States, Congress alone can vest title to property which belongs to the United States. So, if we had a formal treaty before us and if it should be ratified, it still would be necessary for the Congress to pass an act vesting in the Republic of Panama the title to the particular tracts of land ; because "the Congi-ess" means both bodies. The House of Representatives has a right to a voice as to whether any transfer of real estate or other property shall be made either under treaty or otherwise. [88 Cong. Rec. 9267] In the House of Representatives, the Committee on Foreign Affairs stated in its report: "Congressional approval of the Executive commitments to Panama is sought in the form of legislation because there is involved (a) a disposition of property of the United States and (b) an appropriation of funds, both requiring an exercise of the legislative power, independently of the treaty -making power." [House Report No. 78-271. p. 6] There is abundant authority that Congress' power under Art. IV, Sec. 3, cl. 2 ; is "without limitations" in contexts other than the present sort of treaty con- troversy. [Annotation, 496, Ed. 2d 1239, 1246] Xor is there any sufficient reason for treating that Congressional power as less extensive in the treaty context. Art. IV, Sec. 3, cl. 2, represents a decision by the Constitutional Convention and the States to protect the property of the United States by ensuring that the dis- position would be the prerogative of the United States government and not of the individual states. Moreover, the specific grant of that power only to Congress was not accidental. As the most broadly representative branch of government, it is appropriate that Congress is the only body to alienate from the American people that which is theirs. The treaty power does not confer on the President and two- thirds of the Senate a power to change the constitutional distribution of powers in any respect. Such power is not necessary to the orderly conduct of foreign relations. And its recognition would undermine public confidence in the repre- sentative character of the United States Government. It must be remembered that Senate ratification of a treaty requires approval of "two-thirds of the Senators present." Executive agreements, which are very similar in power to treaties, [See Vniicd ^tafcR v. Belmont, 301 U.S. .324 (1937) : United States v. Pink, 315 U.S. 203 (1942)] do not require any Congressional consent at all. I hope that the consideration of the Panama Canal treaties, including par- ticularly the treaty providing for transfer of United States property, will pro- vide an occasion for the reaffirmation of the Congressional power with respect to the disposition of the territory or other property of the United States. Congress' power in this area ought to be regarded as exclusive. The American people ought to be deprived of their territory and property only by action of that governmental body most responsive to i)ublic opinion. That body is the entire Congress and most especially tlie House of Representatives. STATUTORY AUTHORITY FOR CERTAIN TRANS- FERS OF UNITED STATES PROPERTY IN THE ISTHMUS OF PANAMA A. General provisions 2 C Z Code 2 {Aug. 2J{, 1912, 37 Stat. 650) authorizes the President by treaty with Panama to acquire additional land for maintenance, operation, sanitation or protection of the Panama Canal and the Canal Zone or exchange land not neces- sary for those purposes, [emphasis added] X. ^ 1 2CZ Code 331 {Aug. 24, 1912, 37 Stat. 560) authorizes the President to declare by Executive Order that land in the Canal Zone is necessary for construction, maintenance, operation, sanitation or protection of the Panama Canal and to exting-uish "claims and titles of adverse claimants and occupants." XoTE. The President exercised this authority in an Executive Order dated December 5, 1912. 2 C.Z. Code 333-334. Governor authorized to issue revocable licenses covering use of land in the Canal Zone. 2 C. Z. Code 65. Panama Canal Company authorized to purchase, lease or other- wise acquire, and sell, lease, exchange, convey lands, leaseholds and other property necessary or appropriate for any of the purposes expressed in the law providing for operation of the canal and conducting business operations incident thereto. B. Specific authorizations 1. Act July 10, 1937 (50 Stat. 511) (Pub. Res. No. 54. 75th Cong.) authorized Panama Railroad Company to sell certain lands on Manzanillo Island (City of Colon) and release reversionary rights of U.S. therein. 2. Act of Maij 3, 1943 (57 Stat. 74) : a. Authorized the President to transfer to the Republic of Panama all the rights, title and interest of the United States in and to the water and sewage systems in the cities of Panama and Colon. ' T). Authorized the Panama Railroad Company to convey to the Republic of Panama lands owned by the Company in the cities of Panama and Colon, no longer needed for the operation of the railroad or the operation, maintenance, sanitation or defense of the canal. Note. — A General Relations Agreement between the United States and Panama effected by an exchange of notes May 18. 1942, provided for (a) transfer of the water and sewer systems to Panama "When the authority of Congress shall have been obtained" and that (b) the President "will seek the authority of Congress" to transfer certain Panama Railroad land in the cities of Panama and Colon. (EAS 452 ; 59 Stat. 1289) 3. Act Aug. 30, 1957 (P.L. 85-223 : 71 Stat. 509) : a. Declared the purpose of tlie Act to "authorize and direct" the fulfillment of those provisions of the 1955 treaty between the U.S. and Panama "which contem- plate, subject to authorization by the Congress, the conveyance of various lands and improvements to the Republic of Panama." &. Authorized the conveyance to Panama of the rights, titles and interest of the United States and Panama Canal Company in accordance with Article V of the 1955 treaty and item 2 of the Memorandum of Understandings accompany the treaty. Note. — The 1955 Treaty and Accompanying Memorandum of Understandings Reached (TIAS 329) contained the following provisions concerning property of the United States on the Isthmus of Panama : (1) Art. V. The U.S. agreed that "subject to the enactment of legislation by the Congress." all the right, title and interest of the United States in lands and improvements described in paragraph 2 of the Memorandum of Understandings "no longer needed for the operation maintenance, sanitation or protection of the Panama Canal or its ancillary works, or for other authorized purposes of the Ignited States in the Republic of Panama," as well as the Inad known as Patilla Point, then part of the Canal Zone. (101) 102 (2) Art. VI. Superseded Article V of the Boundary Convention of September 2, 1914 and described new boundaries for the areas described in the superseded Article. (3) Art. VII. Abrogated the second paragraph of Art. VII of the 1914 boundary convention and provided that a landing pier in a small cover constructed pursuant to the abrogated paragraph "shall become the property of the Government of the Republic of Panama." (4) Item 2 of the Memorandum of Understandings referred to Art. V of the Treaty and stated that '^legislation will be sought" to authorize the transfer to Panama of the areas of land described in the item and stated that the transfers contemplated by Item 2 were in addition to the conveyance of Patilla Point "and to the transfer of real property effected by Article VI of said treaty." At the hearings on the 1955 treaty, the Assistant Secretary of State for Inter American Affairs (Henry F. Holland) testified that "Under Article V of the treaty, the United States agrees, subject to the enactment of legislation by the United States Congress, to transfer to Panama certain lands, with improvements thereon, in territory under Panamanian jurisdiction and in the Canal Zone when and as determined by the United States to be no longer needed for United States Government purposes. * * * The lands and improvements to which this article refers. * * * are set forth in Item 2 of the Memorandum of Understandings Reached." Hearings, Committee on Foreign Relations, United States Senate, 84th Congress, on Executive F. 84th Cong. "The Panama Treaty," p. 43. Nothing was said in Secretary Holland's prepared statement about Articles VI and VII of the Treaty. In response to a question from Senator Morse, Sec. Holland submitted for the record the following statement (Hearing, supra., pp. 6(^61) : "Legislation Required to Implement Proposed New Agreement with Panama : "Legislation will be required to implement the following provisions of the treaty and memorandum of understanding reached : ***** 41 "Articles V, VI, and VII of the treaty and Item 2 of the memorandum. "Transfer of certain lands and improvements to Panama. Authorizing legisla- tion is required. Necessary replacements would require appropriations." c. Colon coi-rUJor. — Provisions of Article VIII in the 1936 Treaty under which the United States "transfers to the Republic of Panama jurisdiction over a cor- ridor" to be more precisely defined by later agreement, are not included as trans- fers of title although the U.S. agreed to extinguish "private titles existing or which may exist in and to land" included in the corridor. (TS 945, See Exec. B. 74th Congress.) This article was amended by Art. Ill of the Colon Corridor Convention of May 24, 1950, and by Art. VI of the 1955 treaty, defining the Doundaries between Colon, Panama and the Canal Zone. Stateme>'t by Admiral Thomas H. Moorer, USN (Ret.), Chairman of the Joint Chiefs of Staff 1970-74, Before the Subcommittee on the Separation OF Powers, Committee on Judiciary, U.S. Senate, July 22, 1977 Mr. Chairman and distinguished members of the Subcommittee on the Sep- aration of Powers, I am honored to be here as a witness. I hope my testimony will prove helpful in these hearings regarding the U.S. Canal Zone and the Panama Canal. My military experience during the last twelve years of active duty, from 1962 to 1974, offered me some extraordinary and unique opportunities to assess the importance of the Panama Canal to the United States, as well as its value to our Allies and friends and. indeed, to all maritime nations. My evaluation of this waterway as an invaluable possession of the United States was intensified in 1962. At that time I was Commander Seventh Fleet operating in the Western Pacific. Frequently my fleet's capabilities depended on the prompt arrival of supplies from the Atlantic seaboard, supplies loaded aboard ships which were utilizing the Panama Canal. From the Seventh Fleet I went to Commander-in-Chief, Pacific ; from there to Commander-in-Chief, Atlantic, and NATO's Supreme Allied Commander, Atlantic ; from there to Chief of Naval Operations and from there to Chairman of the Joint Chiefs of Staff. Each of these commands provided unique oppor- tunities, and sometimes urgent reasons, to evaluate the Panama Canal. I saw this strategic waterway from many vantage points and under stressful circum- stances. As Commander-in-Chief, Pacific, I recall in some detail the Tonkin Gulf era of 1964. During that period I saw the Panama Canal as a conduit for rapid reinforcement from the Atlantic Fleet should the naval forces of the Soviet Union or mainland China become involved in the Vietnamese War. The U.S. high com- mand was never sure during those early phases of the war of the intentions of either the Soviet Union or mainland China. We knew they had the naval and air capabilities to make trouble and therefore we had to draw up contingency plans for such eventualities. In order to equalize the wartime exposure and hardship throughout the entire Navy, large numbers of Atlantic Fleet units were continuously rotated through the Canal to the combat theatre in the Pacific. In addition, as the Pacific Fleet Commander, I looked to the Atlantic side for rapid logistics support. The U.S. Army, the U.S. Air Force, the U.S. Marine Corps and the U.S. Navy all required a continuous and heavy flow of logistic support ; such necessities as fuel, ammunition, spare parts and food. Our allies fighting with us in Vietnam also required considerable support from the United States. If the Panama Canal had not been open and available, the war in Vietnam would have been much more diflBcult and costly to conduct. This conclusion is also true for the war in Korea. To give you some idea of the magnitude of Panama Canal usage and its rela- tionship to the war effort, in 1963 there was a total of 300 U.S. government transits through the Panama Canal. As the war escalated, the number of govern- ment ships transited by 1966 had almost doubled. The records show for that year — 1966 — a total of 591 government ships transited the Canal. Most of these ships were carrying critically needed logistics support to the forces operating under my command. As Commander-in-Chief, Atlantic, and NATO's Supreme Allied Commander, I saw the situation at Panama in another perspective. That was for the period 1965 to 1967. The war in Vietnam was still expanding, but now I was looking at the Canal not only as a means of sending support to the Commander-in-Chief, Pacific, but also from the Atlantic perspective. I saw the possible need to reverse the flow of ships through the Canal, particularly if the situation deteriorated in the Middle East or in the Caribbean during those volatile months of tension and conflict in both these areas. Both in our U.S. planning and in our NATO planning we envisioned con- tingencies calling for reinforcements from the Pacific Ocean areas. We envisioned (103) 99-.392— 78 8 104 the need for combatant tonnage, Army and Marine Divisions, and particularly we saw the need for amphibious lift. As Chief of Naval Operations I had to look at the Panama Canal as an essential means of equalizing the strength and providing the balance between the Atlantic and Pacific fleets. The Canal made it possible to pre-position certain types and tonnages, but always with the knowledge that the balance could be shifted to meet unforseen situations. The Panama Canal gives the naval planner much flexibility and versatility that he would be deprived of without it. As Chairman of the Joint Chiefs of Staff I became even more sensitive to the strategic value of this U.S. Canal as a means of protecting the security of the United States. My job as Chairman involved all of the Armed Forces of the United States. — their collective requirements — and I was primarily responsible to the President for their ability to carry out their roles and missions as assigned by the Congress. Any Commander acting in that capacity will immediately perceive that it is vital to United States interests to retain complete ownership and control of the Panama Canal. It was at this juncture of my command responsibility that I became concerned about the proposals to surrender the Panama Canal to a leftist oriented govern- ment allied with Cuba. There existed the potential danger for giving this U.S. advantage to a man who might allow or might be persuaded that it was in his best interest to permit Soviet power and influence to prevail by proxy over the Canal, in much the same manner as happened in Cuba. I was convinced as Chair- man of the JCS — and I remain convinced today — that if the Soviet Union ever gained even proxy sovereignty and control over the U.S. Canal Zone and Canal through Cuba, U.S. security as well as U.S. prosperity would be placed in serious jeopardy. The United States would be placed in jeopardy because interocean mobility would be threatened. The mobility of allied commercial shipping and naval forces w^ould face the same threat. The economic lifelines of the entire Western Hemi- sphere would be needlessly jeopardized, and the point is : there is no point in surrendering this vital interest. I have yet to see any solid justification advanced as to why the United States should willingly sacrifice the strategic advantages afforded to us by our possession of the Panama Canal. Also, by relinquishing control of the Canal Zone and the Canal, we would force all those nations who depend on our power and leadership to accommodate to the adverse implications of such action on our part. The Canal Zone could become the satellite base of an adversary, and the advocates of "giveaway" do not appear to take this factor into account. For the foregoing reasons and others not listed, I co-signed with three former Chiefs of Naval Operations a letter to President Carter. The key message in that letter was this: ''Under the control of a potential adversary the Panama Canal would become an immediate crucial problem and prove a serious weakness in the overall U.S. defense with enormous potential consequences for evil." The military and commercial considerations are obvious. Although the large aircraft carriers and large supertankers cannot use the Canal, 97 percent of the world's commercial and naval fleets can use the Canal as it is. The Canal does need some modernization. About two-thirds of all the current Canal traffic is bound to or from U.S. ports. When ships round the Horn instead of going through the Canal, they must travel about 8,000 extra miles, have 8,000 extra miles of wear and tear, need 8,000 extra miles of fuel. On an average it takes 31 extra days to round the Horn. If we were denied use of the Canal, we would have to build a much larger Navy ; much larger storage and harbor facilities on both the East and West Coasts of the United States, and provide more merchant ships as well as escorts. Surrender of U.S. sovereignty over the Canal Zone would inevitably lead to the transformation of the entire friendly character of the Caribbean and the Gulf of Mexico. Everything would depend on the attitude of those who held sovereignty and ownership. In military affairs there is no substitute for ownership of the territory and the ability to control or to deny the waters and the air space. After having lived through three decades of conflict I don't believe it takes much imagination to envisage some of the pitfalls we might face in turning the U.S. Canal Zone and Canal over to any government that might see fit to use it against us. Mr. Chairman, I would like to include in the record the letter signed by four Chiefs of Naval Operations, including myself, and the forwarding endorsement signed by four distinguished members of the United States Senate as part of my statement. 105 Regarding the question of sovereignty, ownership and control of the U.S. Canal Zone and the Canal, I am not a lawyer, but I am satisfied with the Supreme Court's decision of 1907 in the famous Wilson v. Shaw case that the United States does have legal sovereignty and ownership for the purposes enumerated in the Treaty of 1903. This ruling was reaffirmed as recently as 1972. Also, our Constitution states in Article IV, Section 3, Clause 2, that only Congress has the authority to dispose of U.S. territory and other property of the United States. The language in the Supreme Court's decision of 1907 is quite precise. It is not ambiguous. So is the language in our Constitution. Since the Supreme Court's decision of 1907 still stands — it has never been overruled — and since the Constitution, in my opinion, is still the best governing document in existence, I can only conclude that we would be well advised to abide by these documents in our negotiations with other countries. Thank you Mr. Chairman. [From the Congressional Record. Nov. 15, 1977, S19070] Pa:vama Caxal Testimony :Mr. Allex. Mr. President, on October 28, 1977, the Subcommittee on Separation of Powers received the testimony of Mr. Karl Bendetsen on the subject of the I*aiiama Canal Treaties. Mr. Bendetsen is well-known to many Senators, but I might mention that he was Under Secretary of the Army during the administra- tion of President Truman and was for a period of many years Chairman of the Board of the Panama Canal Company. Mr. Bendetsen, after his service in Gov- ernment, returned to private industry where he became chairman of the board and director of Champion International Corp., a company with facilities in many States and a company employing many thousands of American citizens. Mr. Bendetsen is both a lawyer and an engineer and his life typifies the best in pulilic service and private initiative. Mr. Bendetsen's testimony before the Subcommittee on Separation of Powers is, in my judgment, the best existing statement of all of the facts which ought to be considered in assessing the Panama Canal Treaties. The study he has given to this topic is truly remarkable, and the contribution he is making to the public discussion of this issue is invaluable. Accordingly. Mr. President. I ask unanimous consent that the statement of Mr. Karl Bendetsen be printed in the Record so that it will be easily available to the Congress and to interested members of the public. There being no objection, the statement was ordered to be printed in the Record, as follows : Statement re Proposed Canal Zone Treaties (By Karl R. Bendetsen) I. introduction By way of introduction, between 1048 and 1952, I served as Under Secretary of the Army. Among my many duties was that of Chairman of the Panama Canal Company. By delegation from The President of the United States to the Secretary of the Army and from him to me, I was made the responsible agent for supervis- ing the reorganization of the Canal Zone and its activities pursuant to an Act of Congress. Public Law 841, 81st Congress, 2nd Session (64 Stat. 1038) ap- proved September 26. 1950. This Act. adopted under the leadership of former Congressman Clark W. Thompson of Texas, constituted the first basic change in the permanent Canal operating organization from that originally established in 1914 pursuant to the Panama Canal Act of 1912. Tender the Act of 1912, in time of peace, the Canal was operated on an ap- propriations basis, under a single civilian agency as an interoceanic public util- ity headed by a governor. In war. that Act placed the Canal Zone and all of its functions under the supreme control of the Commanding General of the U.S. Army on the Isthmus. The concept of the Act of 1950 was significantly different from that of the Act of 1912. A new corporation was chartered by the Congress known as the Panama Canal Company. The Panama Railroad Company, a New York corpora- tion, was merged into the Panama Canal Company. The new company was placed under the control of a Board of Directors under a Chairman. The President of the Company became the general manager of business operations on the Isthmus. The Governor of the Canal Zone serves ex-oSicio, as President of the Canal Company. The Panama Canal Company was charged with the operation of all of the transit tollmaking, navigational and commercial activities on a self-sustaining basis. It became the sole taxpayer and was required under the Act to fund all governmental functions in the Zone which were strictly separated from the public utility functions. (107) 108 Following my resignation as Under Secretary of the Army in tlie late fall of 1952. I was requested to remain as Chairman. This request was repeated by President Eisenhower in 1953 and I remained as Chairman until the end of that year when the pressure of my other obligations and those associated with the cliairmanship of the Canal Company came into conflict, simply because of the unavailability of adequate time to do both. I will set forth briefly some important highlights bearing upon the historical background which culminated in the Isthmian Canal Convention between the United States of America and the Republic of Panama signed at Washington November 8, 1903. Having briefly described the streams of influence which con- verged in that Convention, I will then arrange a series of observations and com- ments relative to the pending Panama Canal Treaties. Immediately upon ratification, and wholly without any consideration whatever, these treaties would : (a) Extinguish United States jurisdiction in the Canal Zone ; ( ?) ) Terminate its juridical, legal and national presence there ; (c) Terminate the all-inherent rights to the United States under the 1903 Convention ; (fZ) Place all U.S. citizens there resident, including members of the Armed Forces of the United States and their dependents, under Panamanian jurisdic- tion ; (e) Convey all U.S. right, title and interest in all of the land and all of the fixed installation and property there except for certain temporarily excluded properties ; and (/) In thirty months, terminate all police power and all vestiges of governance, both executive and judicial. II. HISTORICAL BACKGROUIVD A. The treaty of 1846 with Colomlia {New Granada) On December 12, 1846 at Bogota, a new American charge d'affaires, Benjamin Allen Bidlack of Wilkes Barre, Pennsylvania, acting entirely without instruc- tions of any kind, on his own initiative, negotiated and signed a treaty. This treaty which he negotiated with the President of New Granada, Sr. Tomas Cipriano de Mosquera, proved to be critical and important. Its vital section was Article XXXV. Under the provisions of this Article, New Granada guaranteed to the United States the exclusive right of transit across the Isthmus of Panama (the State of Panama, a province of New Granada) "upon any modes of com- munication that now exist, or that may be hereafter constructed." In exchange, the United States guaranteed "positively and efficiently" the "perfect neutrality" of the Isthmus and New Granada's rights of sovereignty there. It was this agreement by which the Panama Railroad was to be made possible. The United States Senate did not act on ratification for a year and a half and then only when a new and special envoy was sent to Washington, the very able Pedro Alcantara Herrfm to lobby for the agreement. The Bidlack Treaty,, as it has been commonly called, was Bidlack's only diplomatic triumph. He died seven months after the treaty was ratified. Prior to Bidlack's appointment as an envoy to Bogota, he had served briefly as a member of Congress. B. The Discovery of gold in California and the tear toith Spain Although there were dreams and visions of a waterway connecting the Atlnntie and Pacific Oceans through some pathway across the Isthmus connecting North and South America. Central America nevertheless remained a backwater until January of 1848, when gold was discovered in California at Sutter's Mill. There were only three routes to California. They were the Plains across, the Horn around, or the Isthmus over. Thousands chose the "Isthmus over." It was a bruising experience. Many never made it at all — neither the men nor the mules. Uncounted men died of snakebite, cholera, yellow fever and malaria, and of a thousand hardships and miseries. But on they came. After all. it was 13.000 miles around the Horn from New York to San Francisco. It was 5,000 miles by way of the I.«5thmus. Those who went from New Orleans to San Francisco across the Isthmus were to save 9.000 miles. So it was the discovery of gold in California that first heightened inten.<«ively the interest of the United States in a route across the Isthmus. Ultimately, however, it was not gold; it was the war with Spain and the dramatic voyage of the battleship Oregon from the west coast of the United States around the 109 Horn. Our first true battleship, the Oregon, was in San Francisco when the Maine blew up in Havana harbor and victory in the Caribbean was said to depend on her. Every American was caught up in the excitement. She was a fine vessel and she got there in time to play a part in the Battle of Santiago Bay, but it took her almost seventy days. This was the great catalyst. But much was yet to happen. C. The Panama Railroad It was a man named John Lloyd Shephens who visited Nicaragua and the State of Panama. He became convinced that Panama was where the future lay. He organized the Panama Railroad Company, a New York corporation. The railroad w^as begun in 1850. It was finished five years later at a cost of $8 million, six times beyond anyone's estimate. It was the world's first transcontinental railroad, the most expensive line on earth. A one-way ticket at that time was $25 in gold. It was a bonanza. Panama had been known as a pesthole since its earliest Spanish settlement. Horror stories came out of Panama as the railroad was pushed ahead. Probably more than 6.000 or maybe even twice that number died in the effort to build it. They died of cholera, dysentery, yellow fever, malaria, smallpox. There was then no cure known for any of them. Thanks to Benjamin Bidlack and Article XXXV of his treaty, to U.S. initiative, the Isthmus at Panama was spanned. And the United States was obliged, as well as privileged, under the treaty to keep the railroad open and to protect it against all comers, by force of arms if need be. U.S. naval vessels customarily stood off at Colon and Panama City. D. President Grant Sui-prisingly to many who may still think that President Grant had no initia- tive, it was he who directed a series of practical investigations seeking to find the most advantageous route for an interoceanic canal. He considered such a canal absolutely essential to the future of the United States and of great benefit to the whole world. Grant authorized and directed under the leadership of Admiral Ammen (a friend since boyhood) seven expeditions to Central America between the years 1870 and 1875, Throughout the nineteenth century there had been many theoretical and conjectural claimants to knowledge about where a canal should be built but none of them really knew what he was talking about. Remarkably however, as early as 1552. a Spanish priest designated Panama, Nicaragua, Darien and Tehuantepec as providing the best choices. Among these, he thought Panama and Nicaragua to be favored. The Grant expeditions were carefully done. President Grant commended to the people of the United States "An American Canal, on American soil." E. The French effort Much has been written about the French effort led by Ferdinand de Lesseps. He was the hero of Suez, a sea-level canal bearing no real relationship to the gigantic problems at Panama. He organized an International Congress which met in Paris in 1879 to consider an Interoceanic Canai. The Congress wrestled with the problems of which route and whether it should be a sea-level or a lock canal. However, de Lesseps "railroaded" through a decision for a sea-level canal, despite the fact that a French engineer, Adolphe Godin de Lepinay, presented a plan for a lock canal which turned out to be almost exactly the precise canal which the United States ultimately built. It was his plan that was eventually adopted in 1906 by John F. Stevens, the Chief Engineer of the Isthmian Canal Commission appointed by President Theodore Roosevelt. Congress by an Act approved June 29. 1906 formerly approved the recommendations of John Stevens after protracted and lively debate on the merits of Lepinay 's concept. The French effort collapsed in 1889 and the Panamanian Isthmus returned to the jungle. F. The canal at Panama was second choice In 1899, the United States established the Isthmian Canal Commission for ex- ploration purposes. Rear Admiral John G. Walker was President of the Com- mission. The objective was to recommend a route somewhere across the Isthmus as well as the type of canal to be built. Nicaragua was recommended. It had popular support across the United States and very strong support in the Congress, particularly in the Senate under the leadership of then Senator Morgan. 110 G. The Spooner Act A period of intensive struggle known as the Battle of the Routes was waged. Finally, however, Congress on June 28, 1902 passed the Spooner Act to provide for the construction of a canal connecting the waters of the Atlantic and Pacific Oceans. This Act favored the route across the Province of Panama. The President of the United States was directed to acquire from the Republic of Colombia "perpetual control of a strip of land" not less than six miles in width from the Caribbean Sea to the Pacific Ocean and thereupon to excavate, con- struct and "perpetually maintain, operate and protect thereon a canal," which would afford convenient passage of ships of the greatest tonnage and draft then In use. The President was also directed to provide for the perpetual maintenance and operation of the Panama Railroad and to have "jurisdiction over said strip and the ports at the ends thereof to make such police and sanitary rules and regulations as may be necessary to preserve order and preserve the public health thereon and to establish judicial tribunals as may be agreed upon thereon as may be necessary to enforce such rules and regulations," When the French effort collapsed a new French company was created by the French to obtain what might be salvaged out of the wreckage of the French effort. The name of this company was the New Panama Canal Company (Compagnie Nouvelle). The Spooner Act provided in Section 3, that when the President had acquired the necessary territory for the United States from the Republic of Co- lombia, he was authorized to pay the French company $40 million for its rights and equipment and "to the Republic of Colombia such sum as shall have been agreed upon." It is important to recall however that Section 4 of the Spooner Act provided for an alternative. If the President proved to be unable to obtain for the United States "control of the necessary territory of the Republic of Colombia" he. the President, was authorized to obtain control by treaty of the necessary territory from Costa Rica and Nicaragua for the construction and the perpetual main- tenance, operation and protection of a canal via the Nicaraguan route. There followed the adoption of the Spooner Act, after months of arduous negotiation between then Secretary of State Hay and Thomas Herran, charge d'affaires, a very favorable canal treaty for the United States. The treaty was concluded and signed January 22, 1903 and ratified by the United States Senate on March 17 of that year. Colombia did not act. Communications between Washington, D.C. and Bogota were diflScult at best. It took three arduous weeks to reach Bogota over land and the cable connection was intermittent. The Colombian Senate was called into session on June 20. 1903 to consider ratification of the treaty. However, things did not go smoothly and the Colombian Senate ultimately declined to ratify the treaty. One of the reasons not generally understood was because the rights of the New Panama Canal Com- pany f Compagnie Nouvelle) were due to expire in the course of several months and the Colombians naturally had in mind that upon the expiration of those rights Colombia would be eligible to receive the $40 million payment scheduled to go to the French company in addition to the $10 million specified in the pending treaty. It is important to underscore here clearly that the treaty called for a payment of $10 million and an annuity of $250,000. Many people have called this annuity Tent and many members of the State Department have currently so described the annual annuity as rent. It is not. The $250,000 payment was to be made in lieu of the annual annuity paid to Colombia by the Panama Railroad Company which was itself to be acquired by the United States. It is this same $250,000 annuity, later increased to $2,300,000 which has been paid to Panama. There were a number of unfortunate misunderstandings between Colombia and the United States which also contributed to the rejection of the treaty. Herran so devoted himself to bringing the ill-fated Colombia treaty to a successful con- clusion that sheer exhaustion cost him his life. H. Was the Panama Canal Treaty forced upon Panama? A great body of outrageous propaganda has been fabricated and a web of false- hoods has been spun by the Department of State and loudly declaimed by Pan- ama's dictator, all designed to generate false impressions — impressions which many people erroneously entertain. These false notions are that the Canal Zone was wrested from the Panamanians under duress ; that the U.S. Naval forces were brought to bear to obtain the treaty ■with Panama by which she ceded the Canal Zone in perpetuity. The State (or Ill Province) of Panama seceded from Colombia eagerly and avidly. The leaders knew what thev were doing. They sought their own enrichment and the vast bene- hts they knew would accrue to the new nation by selling and ceding the Zone in perpetuity. They were zealous in their efforts to dissuade the United States from dealing with Nicaragua and Ck)sta Rica to acquire a Canal Zone and construct a canal across the Isthmus there. She seceded. The United States recognized the Republic of Panama. The United States sheltered and defended the fledgling Reimblic from Colombia after secession. It is errant nonsense to contend that force was used against the State of Panama soon to become the Republic of Panama to secede from Colombia. It is total fabrication to assert that the Panamanians did not want the treaty. It is true that Dr. Manuel Amador and Sr. Federico Boyd raised initial ob- jections ; it is true that Secretary of State Hay observed that there are provisions to which some Panamanians might object and it is also true that on behalf of Panama the treaty was not signed by a Panamanian. What treaty between nations has ever been unanimously hailed? Very few. This one was unanimously ratified by the Panamanian Parliament before the United States Senate did — Amador and Boyd joined. I. Was Panama tinder duress? Eight men made the Republic of Panama. They were Jose Augustin Arango, Dr. Manuel Amador, Federico Boyd, Nicanor de Obarrio, Carlos C. Arosemena, Manual S. Espinosa, Tomas Arias, and Ricardo Arias. They knew that following the rejection by the Colombian Senate of the Treaty which had been negotiated M-ith Colombia, the United States would s^Ndtch rapidly and inexorably to the favored Nicaraguan route. These men, all citizens of Colombia resident in the State of Panama, desired for themselves and their associates the enormous and continuing benefits to be derived from the United States, from the payments that would be made, the mighty undertaking of construction and the succesful operation of the canal. The first meeting of the movement to secede was held July 25, 1903. Following this, Arango, Amador and Arosemena became the nucleus of the conspiracy against Colombia. The people of Panama had a low regard for the government in Bogota. It should be remembered that under the treaty with Colombia of 1846. pur- suant to Article XXXY, the United States had a duty to guard the neutrality of the Panama Railroad. The conspirators never had direct word from any agent of the United States that if they conducted a revolution and seceded from Colombia they would be protected from an attack from Colombian troops, but they believed that this would be the case, as indeed it was. On November 2, 1903, Commander Hubbard, the Captain of the U.S.S. Nashville, received secret and confidential orders via the American Consul at Colon to : "Maintain free and uninterrupted transit. If interruption threatens by armed force, occupy the line of the railroad. Prevent landing of any armed force with hostile intent, either government or insurgent, either in Colon, Portobello or other point. Send copy of instructions to the senior ofllcer present at Panama on arrival of U.S.S. Boston. Have sent copy of instruction and have telegraphed Dixie to proceed with all possible dispatch from Kingston to Colon. Government force reported approaching Colon in vessels. Prevent their landing if in your judgment this would precipitate a conflict. Acknowledgement is required" The uprising occurred at 6 p.m. on the evening of November 3, 1903. The presence of the ships of the United States standing off Panama and Colon prevented Colombia from retaking the Province of Panama. The Panamians had seceded in order to obtain the Canal and the beneficience of the United States. No pressure has been applied to them at any time. No United States troops were landed. Some Colombian troops joined the rebels. The others voluntarily withdrew. There was no engagement. No shots were exchanged or fired. The conspirators now having formed a provisional government designated Philippe Bunau-Varilla as their "Envoy Extraordinary and Minister Plenipoten- tiary near the Government of the United States of America." By November 8, 1903. he was installed in Washington ready to negotiate. The conspirators had designated Bunau-Varilla because they felt he was in a position to secure their objective. They were entirely correct. He served them well. They and he had a mutual interest in the outcome and so a pervasive understanding. At the signing ceremonies of September 7, 1977. Torrijos observed of the 1903 treaty : "It was never signed by a Panamanian." — another blatant effort to generate false impressions and erroneous inference. 112 The treaty was signed by Secretary of State Hay and Bunaii-Varilla Novem- ber 18, 1903. Its text was cabled to the provisional government and also sent by ship. On November 26. 1903, the provisional government stated that the treaty would be ratified. It was unanimously approved by the provisional government of the New Republic of Panama on December 2, 1903, even though Amador and Boyd had previously and only temporarily been opposed to it for reasons which are not clear. The United States Senate ratified the treaty on February 23, 1904, by a vote of 66 to 14. J. The treaty The United States was empowered to construct a canal through a zone ten miles in width. Colon and Panama City were not to be a part of the zone. However, sanitation, sewerage, water supply and maintenance of public order in these terminal cities were placed under United States control. Four little islands in the Bay of Panama — Perico, Naos, Culebra, and Flamenco — were granted to the United States. In addition, the United States had the right to expropriate any additional land or water areas "necessary and convenient" for the construc- tion, operation, sanitation or defense of the Canal. In return, the United States guaranteed the independence of Panama. The treaty granted to the United States "all the rights, power and authority * * * which the United States would possess and exercise if it were the sovereign of the territory * * * to the exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." The State Department contends that this did not put the United States in the place of the sovereign. This amounts to stating that no nation — neither the Republic of Panama nor the United States is sovereign. The questions of sovereignty and title were presented squarely before the United States Supreme Court in the case of Wilson vs. Shaw, 204 U.S. 24 when it ruled on these questions. In its opinion, the Court stated inter alia : "It is hyx>ercritical to contend that the title of the United States is imperfect and that tlie territory described does not belong to this nation * * *." The territory whereby the Canal Zone was ceded to the United States was ratified by an Act of Congress (33 Stat. 22.34). The Panama Republic had been born under the protection of the United States. It brought the conspirators what they most wanted not only for themselves but for all the people of Panama. Manuel Amador, its first president, inaugurated February 20, 1904, presided over what he described as boom times and an end to centuries of plague. A new nation had been born free of debt. It was a nation with an endowment in the form of $10 million in gold. The government set aside 8750.000 for working capital; $2 million for public works. Six million was invested profitably in first mortgages on New York City real estate, the income from Avhich provided adequate revenues for the Republic. III. THE PE^'DING TREATIES THE PANAMA GOVERNMENT AND DEFENSE A. What icould 'be their immediate effect? The American people thus far, to the extent that they have been informed at all, have been given the impression that the treaties would be gradual in application. In what amounts to the most important respect of all, in my opinion, this is not so. If the Panama Canal Treaties were to be ratified by the United States Senate, chief among the immediate results would be : (1) Article I would provide that the Isthmian Canal Convention between the T'^nited States of America and the Republic of Panama signed in Washington November 18. 1903 would be immediately terminated and totally superseded. Whatever rights in and to the Canal Zone which the United States would have following the effective force of the treaty would rest entirely upon new and limited grants made by Panama to the United States. Clearly there is no moral basis on which to predicate Panama's demand for surrender of the Canal Zone and termination of the 1903 Treaty. Let us now turn to the practical aspects. (2) The United States would acknowledge the Republic of Panama as sovereign over the territory of what is now the Canal Zone. (3) The Canal Zone would cease to exist. (4) United States citizens in the former Canal Zone (employees, military personnel and their dependents) would no longer be under United States juris- diction. All of them would be under the civil and criminal jurisdiction of 113 Panama. Unless waived by Panama, offenses by any of tbem would be tried and upon conviction sentenced by Panama. (5) The United States would cease to have police power in the former Canal Zone. (G) All police, fire protection, street maintenance, street lighting, street clean- ing, trafiic management and garbage collection in the former Canal Zone will be provided by Panama. (United States pays ten million dollars per year for this, adjusted upward for inflation in Panama.) (7) Defense of the Canal becomes joint under a combined Board of senior military oflicers of equal numbers of Panamanian and U.S. oflScers. (8) The Panama Railroad and all other land and fixed properties (not specifi- cally otherwise delineated in the implementary agreements for the life of the new treaty ) become the absolute property of Panama at once. (9) Article III provides that the Republic of Panama, as territorial sovereign, grants to the United States the rights to manage, operate and maintain the I'anama Canal in accordance with the terms of the Panama Canal Treaty and its related agreements. ( 10) Article XI provides that upon the coming into force of the treaty : "The Republic of Panama shall resume plenary jurisdiction over the former Canal Zone." During a 30-month transition period, Panama would permit the authorities of the United States to have the primary right to exercise criminal jurisdiction over United States citizen employees of the Panama Canal Commission and their employees and over members of the United States forces and civilian components and their dependents : (i) for an offense committed during the 30 months within the former Canal Zone and (ii) for any offense committed prior to the effectiveness of the treaty. For the 80-month transition period, the United States shall retain police authority and maintain a police force in the former Canal Zone. The courts may continue to function during the 30-month period except that such courts may not take any new civil cases but may only dispose of i>ending civil cases." B. WJiat a'bout the transfer of property? Article XIII provides that upon termination of the new treaty "The United States of America transfers, without charge, to the Republic of Panama, all right, title and interest the United States of America may have with respect to all real property including nonremovable improvements thereon, not already so trans- ferred when the new treaty becomes effective." The United States not only receives no compensation, it pays the Republic of Panama for having created the Canal. The treaty states that during the period the new treaty is in force, the United States will provide Panama with a "just and equitable return on the national resources which it has dedicated to the operation, maintenance, protection and defense of the Panama Canal." These payments from revenues require 30 cents per net ton adjusted upward for any increases in tolls over the years. This would amount to from $50 to $60 million per year. In addition, a fixed annuity of $10 million which will constitute a fixed expense of the Panama Canal Commission — over and beyond this, an annual amount of $10 million additional to the extent that operating revenues exceed the expenditures of the Panama Canal Commission. If in any year the expenses do exceed the revenues, this unpaid additional $10 million or any unpaid portion thereof is cumulative, and so that in any year when the operating surpluses exist, such surplus shall be applied to the cumulative backlog. What Panamanian resources? C. ^V^\at a'bout defense? Article IV — Protection and Defense appears to stipulate that the United States during the life of the treaty has the primary responsibility to protect and defend the Canal. As stated above, defense is to be joint. It will NOT be as it is now. The rights of the United States to station, train and move military forces within the Republic of Panama are very specifically limited by another agreement. This agreement is entitled "Agreement and Implementation of Article IV of the Panama Canal Treaty." This collateral agreement which is not called a treaty but which nevertheless would be carried into force by the treaty defines the legal status of our armed forces, the use of areas and installations and the movement of our forces. 114 With respect to our armed forces, Article YI of this collateral agreement provides inter alia the authorities of the Republic of Panama shall have criminal jurisdiction over the members of the Forces (U.S. Armed Forces), the civilian component thereof and their dependents. Within the perimeter of a defense site, offenses committed by such personnel which are criminal acts according to the United States law are by permission of the Republic of Panama subject to the United States. In other cases, Panama also would agree to waive, subject to review, criminal jurisdiction when an act committed off the base is solely against the property or security of the United States. Acts committed off the base arising out of an official act or an omission in the course of an official act are subject to Panamanian criminal jurisdiction unless w^aived. The joint committee will review a certificate of the United States that such an offense was committed in line of duty but there is no provision as to what happens if the joint committee does not agree. Quite obviously, the offense would be subject to Panamanian criminal jurisdiction. The agreement and implementation of Article IV with certain exceptions is not unlike agreements entered into by the United States governing "Status of Forces'' with nations in which we have stationed our forces on bases in a host country, such as for example the Philippines or the Federal Republic of Germany, Italy or Spain, and to some extent the agreement with Japan. Such agreements can work only if the host country so wishes and so desires. In reading this long supplemental agreement of XXII Articles, it would require an exceptional abun- dance of goodwill on the part of Panamanians to work at all. Some provisions such as Article XVIII are somewhat ludicrous, for example. It provides that the United States may furnish educational, sanitary and medical services to the members of its armed forces, their civilian components and depend- ents. For the most part, it is we who have undertaken to teach sanitation to the Panamanians and it is quite difficult to understand why on a military base for the duration of the main treaty it must be by permission. I do not think this is the case in other Status of Forces treaties, some of which in the past I have negotiated myself for the United States. D. Other defense aspects of importance Of the fourteen military bases now in the Canal Zone, only four will remain available to the United States and these will be under direct Panamanian civil and political jurisdiction. As previously noted, Article IV of the agreement and implementation of Article IV of the treaty indicates that whereas the U.S. forces have responsibility for control of entry to defense sites, the Republic of Panama may share in the exercise of this control in a manner to be agreed upon in the Joint Committee. Any signs which delineate the existence of a defense site used by the United States are to be in English and Spanish and on each sign it will be necessary to say and state in both languages that "The sign is erected under the authority of the Republican of Panama." The emplacement of any type of nuclear armament whatsoever is prohibited to the United States under paragraph 6 of Article IV of the agreement and im- plementation of Article IV of the treaty. Even within defense sites, the Panamanian flag occupies the position of honor and is flown on each of them. Flying the flag of the United States is permitted but the joint committee will determine the manner of displaying the flags. At the entrance to a defense site, only the flag of Panama will be flown. E. There is no right to intervene after treaty expiration Much has been said by the State Department and by The President concerning- long-term defenses. It has been unequivocably asserted that even following the expiration of the proposed new treaty, the United States will have the right to defend and protect the neutrality of the Canal. It is alleged that a grant of right to the United States to this effect is contained in the auxiliary agreement entitlefl "Treaty Concerning the Permanent Neu- trality and Operation of the Panama Canal." No such right is granted and no such right would exist authorizing the United States to intervene for the defense or the neutrality of the Canal after the pending treaty expires. All it says in this regard is found in Article IV : "The United States of America and the Republic of Panama agree to maintain the regime of neutrality established in this treaty, which shall he maintained in order that the Canal shall remain permanently neutral * * *." F. MVhat ahout enemy ships in time of warf Whereas now in time of war, as in the past, the United States could deny entry and passage of the vessels of any nations with whom we might be in a 115 state of war, ouce this treaty and its collateral and subordinate agreements have been ratified, no such right will exist. The proposed agreements specifically au- thorize the passage of the vessels of war and auxiliary vessels of any and all nations in peace or war. Dr. Romulo Escobar Bethancourt declares that the United States has no right to deny passage to an enemy vessel. He denies that the United States has any right to guarantee the neutrality of the Canal. He denies that the United States may say when the neutrality of the Canal has been violated. He stated publicly : "We did not want that with the excuse of neutrality, the United States would maintain a guarantee over the State of Panama. This was another cause of dis- cussion that kept the negotiations detained until the United States gave up on the idea of having a guarantee of neutrality over the Canal." United States officials say that we have some sort of an "understanding" with the Panamanians that Article IV means that the United States does have a "right." Dr. Escobar, the chief negotiator, and the real center of power in Panama says this is not so. It will be recalled by many that Mr. Kissinger said that he had an understand- ing with the Soviets as to the meaning of a certain critical provision of the SALT I Treaty. It developed, however, that the Soviets denied that there was any such understanding and certainly did not restrain themselves from action respecting strategic weapons and missile sites that would have been a direct viola- tion of the alleged "understanding." G. Does this treaty generate friendly relations with Panama? If we have opened up a new era of cordial relations with Panama, how is it that Dr. Escoi»ar continues to defame and slander the United States before his own people in Panama at every conceivable opportunity ? With combustible rhet- oric he continually incites the students into confrontation and does so with regard to the period after the treaties take effect. He characterizes the United States as a reluctant and imperialist nation. On August 12, 1977, he advised these students that if they are disenchanted with what he described as some of the "ugly features" of the new treaties, they should strike out on their own. In this enlightening address, Dr. Escobar said to the students : "In the past when we set bombs against our oligarchy (in Panama), when we challenged the regimes established in our country w^e never asked anyone for permission, you have never asked anyone for permission * * *. When one wants confrontation, one puts his knapsack on his back, his bomb at his waist and goes to stage the confrontation." The United States personnel (military, civilian and dependents) will be totally subject to the sovereign power and jurisdiction of the Republic of Panama. Fixed installations and the property not temporarily and specifically otherwise desig- nated will be immediately theirs. There is nothing in any of the treaties that could possibly prevent the Panama- nians from nationalizing the entire operation whenever it chose as did Egypt, con- trary to its obligation in the case of Suez. When Britain, France and Israel under- took to enforce the commitments of Egypt, it was the United States that pre- vented these nations from so doing. We thus laid the foundation not only for what is happening to us now but for that which w^ill lie ahead whenever the Panamanians consider it in their si:>ecial interest to do so. The Panamanians largely despise the United States. They remember the precedent of Suez. As noted, the treaty provides for joint defense under a joint Board composed of equal numbers of Panamanian and U.S. officers. No one is in command. As In all such cases, the host country which will also be the sovereign povssesses the absolute power of decision. This would seem to place a high premium on Iriendly relations, shared objectives and philosophies, and an abundance of good- will. Is it there? Consider the following : At Fort Cimmaron, there is a Panama National Guard Training Center. The soldiers in training have a chant. Perhaps for them, it is similar, for example, to the chant of U.S. Army Airborne units: "Airborne, Airborne All the Way." It is different, however, in Panama. It goes like this : "Que Muera Gringo Gringo Abajo Gringo Al Paredon" translated into English, this means " "Death to the gringo Down with the Gringo Oringo to the wall" 116 Mutual trust? Joint defense: A friendly climate with an abundance of goodwill ? When Torrijos was returning from the treaty signing ceremonies convened with such fanfare, he had something else on his mind other than a feeling of warmth and cooperative friendship with the United States. The English transla- tion of a message sent to Castro as reported by the Spanish news agency on September 10, 1977 follows : "In returning to my country and flying over the sky of Cuba, I salute you with my everlasting friendship ; I wish that the Cuban people under your well- aimed direction will continue its forward march towards progress. In Latin America, your name is associated with the sentiments of dignity that is channeled to the termination of all forms of shameful colonialism." The friendly words of the head of the Panamanian government? Friendly to the United States, that is? IV. OTHER VITAL CONSIDERATIONS A. We are assured that the canal is or soon will he obsolete — not so We are soothingly assured that the Canal in reality is obsolete and really is not important to our security or our economy. It is true that our thirteen largest aircraft carriers cannot transit the Canal. All the rest of our surface and under- sea naval ships can do so and plans for future construction of frigates, cruisers and destroyers will all remain canal-configured. The Canal is one of the four vital choke points of the world. The Canal as a U.S. waterway which we are free to use and deny to our enemies in wartime gives the United States a striking, strategic advantage that Russia can never have. Geography dictates that the Soviets divide their navy into four separate fleets incapable of mutual support or reinforcement. Only between the Indian Ocean and the Mediterranean via the Suez Canal can the Soviets shift warships as they frequently do. We have relied heavily on the Panama Canal in every serious military crisis of the century as a means of concentrating our fleet in areas of greatest danger. We need the anchorage facilities there that we now^ have. We need the airfields there. I have heard it argued that it is obsolete because supertankers cannot transit the Canal. Supertankers? No supertanker can even enter any port of the United States. Supertankers were designed expressly to go around the Cape of Good Hope. If we were relegated to Drake Passage around Cape Horn or through the Straights of Magellan through the Tierra del Fuego, a very hazardous route, our defense would be impaired as would our sealane life lines. Our Alaskan oil will go through the Panama Canal. Very large tankers, in fact most of the tankers afloat in the world, can transit the Canal. The first Alaskan oil cargo will shortly transit the Canal. B. What do the Soviets say alout the canal? I quote from the edition of the Weekly Review of the Intelligence Digest of August 24, 1977 published by Intelligence International Ltd., 17 Rodney Road, Cheltenham, Gloucestershire, England : "Perhaps the most revealing insight into Communist strategy involving the Panama Canal has come from a Soviet Army oflScer, a Major Sergei Yuworov, writing in the official Soviet military organ Red Star. As reproduced in the Cuban magazine Bohemia. Major Yuworov wrote : 'Due to its privileged location as the juncture between South America and the rest of the continent, including the Canal that permits United States warships to operate simultaneouslv in the xVtlantic and Pacific, it— the Canal Zone — must be considered by the Soviet Union as a priority Zone. A second zone (from which to attack Panama) is the Central American Isthmus, located to the north of Panama. The Canal itself can be attacked as well from Colombia.' As a third choice, Yuworov points to 'converting Cuba, and implicitly Puerto Rico, into bases from which Moscow's plan can be consummated.' " Quite a mouthful from a Soviet officer writing in the Red Army's ofl^cial journal ! On the question of defense, it is nbsurd to say that bv ceding the Canal to Panamanians, our capacity for defending the Canal and guaranteeing its security will be increased. With the property in the hands of an irresponsible government or a government dominated by Marxists as Panama's government is, it could 117 decide to close the Canal to our ships of war, to our navy, and where would we be then? The proposed treaty as already stated specifically permits the ships of a nation in a state of war with the United States to transit the Canal. C. Will the new treaty protect from or expose canal to sal)otage? One of the forcefully repeated arguments made by The President and the State Department is that if we do not surrender the Canal through this treaty, Panamanians will sabotage the Canal, whereas the new treaty will eliminate this hazard. Well, this type of reasoning should exiwse itself to real question. Sabotage by whom? There are far left radical students in Panama today who object to the proposed treaty and there was a crazed Panamanian in Stockholm who immolated himself simply because the treaty gives to the United States the right to manage it and underwrite the costs until 1999 and provides for a limited U.S. presence there. It is very difficult now to sabotage the Canal. It will not be difficult after the pending treaty is ratified and the Zone ceases to exist. It is almost impossible now. It will be easy if the treaty is ratified. Certainly after the treaty is approved, they would have a far better opportunity to sabotage the Canal than now when we give up substantially all of our police power in the Zone because there will be no Zone — it will all be Panama. If Panamanians with or without the tacit approval of its Marxist-dominated government were to sabotage the Canal, it would cut off about 25% of Panama's gross national product. The indirect benefits flowing to Panama now are at this level. The Panamanians know that their livelihood depends upon the continued oijeration of the Canal as it stands now. Attempts at sabotage in the past have been thwarted by our own police and security forces which under this treaty we will no longer be able to maintain. So, in fact, for those radical students who consider the United States an imperialist power, as does Dr. Escobar, this treaty increases the opportunity for sabotage and surrenders a vital, strategic and tac- tical defense instrumentality of the United States which we cannot afford to surrender. The Panamanians themselves have enjoyed nearly the highest standard of living on tlie average of any other nation in Latin or Central America due to the beneficence of the United States, and they know it. Most Panamanians who are fearful to speak out — they are afraid of their dictatorship — know that their government could not effectively operate the Canal anyway, but their Hips are sealed by their fear. D. Who is Omar Torrijos and hoiv did he come to power? Omar Torrijos did not seize power from the old oligarchy nine years ago. That coup was led by Majors Boris Martinez, a subordinate of Torrijos. who w^as kept innocent of the coup because of his excessive drinking problem. Major Martinez was an active, determined Communist. When the Communist party of Panama, however, headed by Romulo Escobar Bethancourt, Juan Materno Vasquez and Marcellino Jaen decided on March 6, 1969 to purge Martinez. Jaen, who is married to Torrijos' sister Toy a, persuaded Bethancourt and Vasquez to make Torrijos the head of the national guard, and later in 1972 the chief of government. Martinez was purged because he wanted to move too fast, faster than Bethancourt, the brains of the Communist partv in Panama, thought they should move. He felt they could obtain much more by moving more slowly and not risk a countercoup. Torrijos has been frequently described as the son of rural schoolteachers. This is correct. Both his mother, Joaquina, and liis father, Jose, have been identified as founders of a Communist cell in Veragua Province. It is now the most power- ful and influential cell in Panama. Omar Torrijos was a member of the Marxist organization of "Young Veraguas" when he attended the normal school of the Province of Veraguas. Drew Pearson on November 19, 1968 later identified him as a member of the Communist party of Panama. During July 1977, a Soviet economic mission to Panama confirmed a treaty establishing a free zone for the Soviet Union in Panama. A discussion took place at that meeting in which the Soviets stated they would consider financing and constructing a new sea-level canal for Panama across the Isthmus. E. What ahout a sea-level canal ? Is one needed for defense? Immediately after World War IT, the idea of a sea-level canal was thou"-ht to have great urgency from a defense standpoint during the immedinte reaction to the atomic bomb. Many studies since then have e'^tahlished that both a lock canal and a sea-level canal are obviously equally vulnerable to atomic attack and that 118 both require extensive protection with air cover and sea forces, antisubmarine, surface and submarine. For all of this, we need the air fields in the Zone and we need the bases there over which we are surrending control. A sea-level canal across the Isthmus would be a foolhardy undertaking be- cause of the geology of the Isthmus, let alone the nature of the Panama govern- ment. The uniquely intractable geologic formations were primarily the cause of the French collapse. It was only because of the superior capabilities and re- sources of the United States that we were able successfully to excavate the main channel known as the Culebra (Gailla'rd) cut. Not only that, it would be fool- hardy to undertake it after this treaty goes into effect, if it does go into effect, given the characteristics of the Panamanian Marxist dictatorship with its axes with Moscow and Havana. F. We should not agree to refrain from negotiatmg for and creating a new canerating annuity which Colombia would have received. The annuity over the years has been increased but it is not and never has been at any time rent. It is now $2.3 million. K. What about the watershed which is essential to the operation of the lock system of the canal? The canal lock system cannot operate without a constant and abundant supply of huge quantities of fresh water. These water sources are Madden, Miraflores and Gatun Lakes and the Chagres River. Protection of the watershed unquestionable and certain is indispensable to the future operations of the Canal. Without such assured protection, the requisite availability of vast amounts of flowing fresh water would vanish. Approximately two-thirds of this vital watersihed lies in the Canal Zone itself. As you know, upon the coming into force of this pending treaty, the Canal Zone would wholly cease to exist and would become Panamanian proi)erty under its sovereignty and jurisdiction with small parts by permission of Panama set aside for use and occupancy by the United States in carrying out its "management contract" to operate the Canal until the year 2000 at the sole cost and expense of the United States. The contiguous land area portion of this watershed lies outside the Zone in Panama. This important one-third portion of the watershed which lies outside of the Zone boundary has been virtually destroyed by a relentless assault on the flora. By whom? By Panamanian peasants and farmers living in these areas. The Government of Panama knows about this and does nothing about it. When the Canal Zone ceases to exist as it will, these assaults may well continue and be carried forward into the remaining two-thirds of the watershed. In that case, and there is nothing in the treaty to prohibit this, the jungle will disappear as it has in the other thirds and the Zonian two-thirds of this irreplaceable watershed will progressively become desertized as the contiguous one-third is becoming. While Article VI entitled "Protection of the Environment" provides for a joint commission on the environment to be established with equal representation from both sides, the Commission only concerns itself with the implementation of certain provisions of the treaty and does not concern itself with that which would then be going on within Panama (in what was formerly the Canal Zone) as the implementation of the treaty by the parties relates only to those areas temporarily reserved for the use and occupancy of the United States for hous- ing, for military bases, some training and for canal operations. This Article has no application specifically to the protection of the watershed, all of which will lie in Panama and none of which would come under the active care of either party once the treaty goes into force. These lakes and the river now in the Zone — those portions now in the Zone — would survive by themselves if left alone, but will not survive at all if they are treated in the same way as the portions of the watershed which have always been in Panama have been treated during the years since the Canal commenced operation. So the treaty has no protective environmental provisions in this regard — certainly no enforceable ones — and Article VI by its plain language clearly does not have this subject in mind. L. What about the allegation of the vulnerability of the Panama Canal to sabotage or the threats of sabotage if the proposed treaty is not ratified? On September 12, 1977, General Omar Torrijos said that the Canal "is as in- defensible as a newborn baby." Is this true? The answer is "No, it is not true." Since 1942, the Canal has been provided with protective and with emergency 121 devices capable of putting ships through the Canal even if every gate and every lock were to be destroyed. A bomb, a conventional bomb, that is, could not disrupt Oanal traffic for an extended period of time. Neither could a ship which exploded within the locks stop traffic for extended periods. The dams also have special protection from outside attack. So long as the Canal Zone continues to exist, sabotage of the lock system is next to impossible in such a manner as to put the Canal out of commission for an extended period. When the Canal Zone ceases to exist, which it will upon the coming into force of this treaty, these protective devices will themselves become vulnerable. Present jurisdiction plus the included police power and the protective shield of the ten-mile wide zone are essential. The treaty makes no provision for the continuation of the Zone in order to assure or more particularly to avoid the creation of a vulnerable situation which will arise when both the Zone and U.S. police power become extinct. The treaty, if approved, will extinguish both. This is a fatal flaw. Contrary to the contentions of the proponents, the continued existence of the Oanal Zone and our jurisdic- tion assure the security of the Canal. The treaty will strip away that security and render the Canal vulnerable to the attack of saboteurs and terrorists. M. The Protocol of 1914 to the 1903 treaty. If the proposed treaty is confirmed by the Senate, the United States will no longer have a treaty right to deny passage to belligerent ships. To the contrary, the United States will be obligated to allow such vessels to transit the Canal if they can reach its approaches. The United States now possesses that right and always until now considered it to be a valuable right. Soviet naval power is multiplying and over the last 25 years ours has been steadily diminishing both relatively and absolutely. Why would we then agree to forego this valuable treaty right? On October 10, 1914, an agreement between Panama and the United States was signed whereby belligerent ships could be denied the use of Panamanian waters and Canal Zone waters. Ships using Panamanian waters would be denied the use of the Canal Zone ninety days. This would make it more attractive to such belligerent vessels to sail around the Horn. This agreement indirectly had the effect of modifying the neutrality provisions of the 1903 treaty and I am told with the tacit consent to Britain with whom in 1901 the second Hay-Pauncefort Treaty superseded the first treaty upon as- surance to Britain who surrendered her rights to construct a canal in return for a promise that ours would be neutral and open. I might add, by the way, that the words of neutrality in the 1901 Hay-Pauncefort Treaty with Britain are not dissimilar from those incorporated in the neutrality treaty which the Administration contends gives the U.S. the right to intervene in defense of the Canal after the year 2000. I have never heard anyone contend that the Hay- Pauncefort neutrality treaty with Britain in 1901 gave Britain the right to intervene in the Canal Zone which is U.S. territory. In an agreed minute to the principal pending treaty which minute has reference to paragraph 1(c) of Article I (covering abrogation of prior treaties and the establishment of a new relationship) this 1914 agreement would cease to exist. It would be expressly abrogated and the United States would lose its existing treaty rights whereby belligerent vessels can be denied the use both of Panamanian and Canal Zone waters. This is a very important treaty right which should be preserved and carried forward perpetually. N. The transfers of property and the payments to Panama The proposed treaties would cede and surrender and transfer to Panama without consideration vast properties outright, including the Panama Railroad. This would be done immediately upon the coming into force of the principal treaty, if it is confirmed by the Senate. The Railroad is vital to Canal opera- tions, maintenance and Canal emergencies. Also included in the immediate trans- fer to Panama and its sovereign jurisdiction to the exclusion of the United States would be all of the land areas of the Zone. These land areas which were ceded to the United States are U.S. territory subject to the exclusive right of the United States to exercise sovereignty over them. Not only that — lands within the Zone which was ceded by the 1903 treaty in perpetuity were later purchased by the United States from the individual Panamanian owners who owned land within the ten-mile wide Zone. Between the coming into force of the treaty and the year 2000 and perpetually thereafter, all of these lands will belonfr to Panama from the befinning. The 122 United States will have the use and occupancy, not the title, and no jurisdiction of limited small areas of housing and Canal transit operations in order to carry out "the management contract" which the United States undertakes in the form of this treaty — at its own sole cost and expense. The transfer of title is not delayed until the year 2000. The Canal Zone immediately ceases to exist. We cede it lock, stock and barrel immediately. These valuable properties become Panama's free, including the imi>ortant Panama Railroad which the United States should continue to operate so long as the United States has the obligation to operate. Certainly the Canal Zone as is in all respects, including U.S. jurisdiction, should remain intact until the year 2000, Not only are lands an extensive operating asset given forthwith without any consideration whatsoever, but also under paragi-aph 4 of Article XIII, the United States Is committed to pay anpually over the 22-year period to Panama $60 million or more out Of revenues and ,$10 million a year for the municipal services Panama will undertake to provide. This latter $10 miUion per year is indexed to the rate of Panamanian inflation ! This paragraph goes on to say that all of this is "a just and equitable return." These payments which could aggregate $1.6 billion over the 22-year period are in accordance with the treaties stated to be in addition to all of the other transfers of property which in and of themselves are made wholly without consideration to provide in accordance with paragraph 4 of Article XIII "a just and equitable return on the national resources which it [Panama] has dedicated to the efficient management, operation, maintenance, protection and defense of the Panama Canal * * *" What management? What operation? What maintenance? What protection and defense? It should be borne in mind that these required payments which are cumulative may not be generated from tolls because in the year 1976 after increases in tolls between 1974 and 1976 of ap- proximately 50%, the operations were in deficit. Unless tolls are increased still further by substantial percentages, which would not seem to be justifiable, and the tolls do not generate the payments that Panama expects and the treaty pro- vides, the deficit will be paid nevertheless by the U.S. Treasury. This means, of course, it will be paid by U.S. taxpayers ; by your constituents out there — in the south, in the midwest, in the mountain states, in the far west, in the northeast. These people already have to be either very rich or very poor even to be sick or to help send their sons and daughters to college today. Not only that, of course the investment of the United States in the Canal Zone, presently between $5 and $6 billion, will also be on the backs of the U.S. tax- payers — never to be recovered as was intended by Congress and promised to the American citizens by the Act of 1950. Traffic through the Canal is estimated to grow at 3% to 314% per year. This percentage is very probably substantially below the rate of inflation which the United States will endure by reasons of the monetization of the Federal deficits and therefore without substantial increases in toll rates, a growth of 3V>% per year in the volume of traffic would not ever overcome the current deficit which will be further increased by these cumulative payments which over time would aggregate $70 million per year. The treaty imposes upon the United States all of the burdens and accords none of the benefits. At the same time, it gravely impairs the security of the Canal, rendering it highly vulnerable to acts of sabotage whenever these seem to be in the interest of radical students of ter- rorists or of unstated Marxist reasons approved by Moscow. There are no provisions to insure any sort of good faith performance upon the part of Panama. There are no adequate provisions to protect the operations there and adequately to secure the Canal during the 22-year period when the United States bears the burden at its own sole cost and expense under f>ondi- tions wherein the United States assumes great responsibility but surrenders to Panama all of its authority. Panama becomes the exclusive sovereign over the entire area. It becomes the host country, the host nation. The United States has a management contract responsibilities without commensurate authority which cannot be successfully discharged. O. What about the as.^crtions that if this treaty is not ratified, the United States will face another Vietnam? Thoro have been repeated allegations from official sources in the Administra- tion that the United States will face another Vietnam in Panama if the pro- posed treaty is not ratified. The President has stated that if the treaty is not rati- 123 fietl, he will defend the Canal Zone even if it requires 100,000 troops. At a later time, this figure was raised to a higher number. It was said that the Canal would be defended even if it requires 200,000 troops. Is there any validity to such allegation? Panama is a relatively small country of approximately 1.5 million people. Its resources are limited. A major guerrilla war comparable to Vietnam is wholly beyond her resources. She could not mount such an operation unless she were to be substantially and continuously supplied with vast quantities of ammuni- tion, weapon systems, communications equipment, an elaborate guerrilla command structure and huge numbers of personnel. These would have to be provided by another nation. Do the proponents of this treaty seriously assert that a major offensive of this nature would be launched against the U.S. Canal Zone, that is to say, against U.S. territory with the direct support of another nation or nations? By whom? It is not clear that if some other nation or nations provided the support for such a major attack upon U.S. territory that it would risk the beginning of World War III? Does it not seem that it is an imposition upon the citizens of the United States to induce them to support the Senate of the U.S. in ratifying the proposed treaty by suggesting that the United States will face another "Vietnam War" in Panama if it is not ratified? P. The proposed treaty cannot he considered in isolation from our past defeat i)i Viettiain and from other aspects of U.S. credibility If we are induced to approve this treaty by a Marxist-dominated government, this would be another building block in the structure which the Soviets have been successfully and relentlessly erecting to fence in the United States and subject her to Soviet will. As every Russian knows, and as every member of the Politburo and Soviet Aparatchik believes devoutly, all non-Marxist social and governmental systems are anathema to the Soviet Union and the United States is the enemy. Somehow there are many i)eople in the United States and seemingly within the government of the United States who apparently do not understand this. Tlioy do not understand or appreciate that we are at the mid-stage of a shift in relative power and infiuence to the Soviet Union that is of historic proportions, and which promises, unless arrested severely, to have enduring significance. The rise in Soviet standing in the world can be traced almost exclusively to the increase in relative Soviet military capabilities. She has projected her power through Cuba to Panama. There are many other ways of dealing fairly and equitably with Panama as a neighboring state short of immediately surrendering the U.S. territory embodied in the Canal Zone and simultaneously terminating our jurisdiction there. If we are induced by the will-o'-the-wisp of wishful thinking that Marxists can ever be appeased by the proposed treaty or by anything less than our surrender to their will, we will have crossed the Rubicon and will expose the Canal to what- ever may be the Marxist design. Whether ratification is approved or refused will make no difference in Marxist objectives and designs. However, it will make a quantum favorable difference in the capacity of the United States to retain its independence if ratification is defined. The United States will have the respect of most of the nations in the western hemisphere and of western Europe and of our allies in the far east if we otherwise deal fairly and equitably with Panama while declining absolutely to surrender our territory as proposed by the pending treaties in reliance upon Marxist promises. The proposed treaty is wholly against our national interest. The consequences will be wholly adverse. There is no such thing as world opinion. On the other hand we are being closely watched by our remaining friends and allies. To them the proposed treaty cannot be brewed in isolation. If confirmed, it will be viewed by friends, neutrals and foes alike as yet another U.S. surrender. No observer will regard it as an act of noble purpose and of magnanimity. Q. If the canal is to he transferred to Panama on Deccmher 31, 1999 certain amendments are essential If the Senate in its wisdom ultimately decides that the Canal should l)e never- theless transferred to Panama at the end of 1999, then these considerations are vital : First, that the watershed be protected : Second, the necessity for providing protection of the Canal from sabotage and acts of terrorism ; Third, the maintenance of the right to deny passage to belligerent ships ; 124 Fourth, the necessity that the United States be free to negotiate for and build a canal elsewhere on the Isthmus ; Fifth, the requirement that the United States have authority commensurate with its responsibility between now and the end of 1999 which in turn requires that the Canal Zone and U.S. protection continue to exist until then. Neither the Canal Zone nor any of the fixed or operating properties should be given to Panama until the end of the 20th century. Meanwhile, progressive measures would be taken to train and employ Panama- nians so that at the end of the century Panama would man all positions and be in a position to take over. At that time, U.S. protection would come to an end. The Zone would be relinquished. All properties would be conveyed. Thereafter, the United States should be prepared to accept the Canal at risk and whatever other consequences might ensue. With these considerations in mind, the treaties should be amended as follows : 1. No transfers of jurisdiction, authority or property should occur until Decem- ber 31, 1999 and the Canal Zone should remain intact, with all and in full the prop- erties and the facilities, under the authority of the United States to the exclusion of the exercise of jurisdictional authority by Panama during the 22-year transi- tional period. 2. During this period and until December 31, 1999, the 1903 treaty as amended by amendatory treaties, minutes, notes, understandings and executive agreements prior to the signing of the proposed treaties and their minutes, notes and subordi- nate agreements would remain in full force and effect. 3. The treaties should be amended further to provide that Panama agrees that she will not grant or accord to any other nation any military, naval or air bases in Panama or in Panamanian waters and that she will not permit the stationing of naval, air or military forces or of quasi or paramilitary forces of any other nation in Panama or of such individuals or units, other than individual diplomatic personnel, except as agreed to by the United States during the transition period ending December 31, 1999. 4. Article XII, paragraph 2(b) should be deleted. The United States should be free to negotiate for and build an Isthmian Canal if it so desires outside of Panama. 5. The neutrality treaty should be amended to make clear that the United States may take such measures as it believes necessary for the defense of the Canal at any time after the year 2000 and to this end as in the case with other friendly countries, Panama should in the mutual defense interest of the parties, provide after the year 2000 air. naval and military bases in order to give mean- ins: to the defense of the Canal following its surrender at the start of the year 2000. 6. The treaties should be further amended for the payment of an increased annuity to Panama during the transition period but no other payments should be made. Accordingly, Article XIII, paragraph 4, should be deleted. 7. Specifically, the protocol of 1914 which provides the United States with treaty rights to deny belligerent ships of any class of nature, whether warships supporting logistic ships, maintenance ships, fleet trains, etc. the use of the waters of Panama and of the Canal, should remain in full force and effect. To this end, the treaty should be amended so as to strike the provisions by amending Article I, paragraph 1, as follows : Strike the words "Upon its entry into force," substitute therefor "On January 1, 2000." Strike Articles III, IV. V, VII, VIII, IX. Amend Article X by striking paragraph 1 thereof and substituting therefor the following: "During the transition period ending December 31, 1999, the United States agrees to provide for an orderly phasing-in to all positions of Panamanians so that as of January 1, 2000 all operations will be conducted by Panama and by Panamanian employees or other personnel hired by Panama. To this end, the United States will progressively establish during the transition period employ- ment and labor regulations which will contain terms, conditions and prerequisites for all categories of employee.s of the Panama Canal Company whose positions will be fully absorbed when the Panama Canal Company ceases to exist on January 1. 2000. The foregoing amendments necessitate in addition that the following addi- tional amendments be made in order that all remaining provisions be compatible with each other : Strike Paragraph 8 of Article X. 125 strike from Paragraph 9 of Article X the words "Panama Canal Commission" wherever it appears therein or elsewhere in the treaty and substitute Panama Canal Company." Strike Article XI. Strike Article XII. Strike Article XIII. ^. . 8 Add an additional Article providing that all minutes, executive agreements, implementation agreements, letters of understanding and all other understand- ings associated with the pending treaties, including the agreements and imple- mentation of Article III and Article IV are to be set forth in detail as an attach- ment to the proposed treaties and incorporated by reference in the Panama Canal Treaty so that any and all amendments to any of the foregoing will require the advice and consent of the Senate of the United States of America. v. RECAPITULATION A. While the treaty of 1903 was not signed by a Panamanian as Torrijos stated during the signing ceremonies in the Pan American Union on September 7, 1977, it was signed by a duly appointed Minister Extraordinary and Plenipotentiary designated by the government of the New Republic of Panama, namely Philippe Bunau-Varilia. The Panamanian government ratified the treaty December 2, 1903. The United States Senate did not ratify it until February 23, 1904. B. Thereafter, Tomas Arias, the Secretary of the new government of Panama sent a note to the United States government : '•The Government of the Republic of Panama considers that upon the exchange of ratifications on February 26, 1904 of the treaty for opening an interoceanic canal across the Isthmus of Panama, its jurisdiction ceased over the Zone." C. As cited above, in 1907 the U.S. Supreme Court ruled that the Canal Zone was "ceded" and that the United States owned it absolutely. D. The presence of the U.S. Naval forces off of Colon and Panama City were to prevent the landing of Colombian troops. No United States troops were landed. Panama was neither under duress nor coerced. It sought independence and avidly sought the treaty. In fact, some Colombian troops joined the Panamanians. E. In 1936 and 1955, the 1903 treaty was expressly reaflBrmed in further trea- ties which made certain minor adjustments to the treaty of 1903. The amendatory treaties were duly ratified. F. One expects remarks from Torrijos such as he made during the September signing ceremonies that "United States recognized the need to correct an error instead of prolonging for an eternity an injustice and to correct an historical mistake." This is the kind of language he uses to fire up his people. What error? What injustice? T\niat historical mistake? Where would Panama be today were it not for the events of 1903? Probably still a part of Colombia. If thinking Panamanians were really aware of their history, they would feel gratitude toward the United States. Both Panama and Colombia have derived tremendous benefits from the Canal. So has the rest of the world. G. Shortly after the Wilson Treaty with Colombia mentioned above which was not ratified until 1922. and sometime during 1923, Charles Evans Hughes, then Secretary of State, said '"It is an absolute futility for the Panamanian government to expect any American administration, no matter what it is, any President, or any Secretary of State, ever to surrender any part of these rights which the United States has acquired under the treaty of 1903." H. CLOSING SUMMARY Congress in 1902 in the Spooner Act empowered President Roosevelt to acquire from Colombia land across the Isthmus of Panama for a ship canal if Colombia would grant perpetual control. A treaty for a 10-mile wide zone was negotiated by the plenipotentiaries of Colombia and the United States but the Colombian Senate rejected the treaty in August of 1903 for several reasons cited heretofore. Later on, when it was too late, Colombia wanted to accept it. On November 3, 1903, Panama, a restless province of Colombia, started a revolution, wholly bloodless as it turned out. President Roosevelt, to protect the Panama Railroad and to protect American citizens from imminent violence, 126 kept Colombian troops at a distance with a nearby show of gnnboats and marines. No United States forces were landed. Some Colombian troops joined the revolu- tion. A new Panamanian government was formed on November 4, 1903, Two days later, on November 6. 1903. Secretary of State John Hay oflScially recognized the Republic of Panama. No pressure whatsoever or of any kind had been pnt upon Panama by the United States. On November 18, 1903, Secretary Hay concluded and sig:ned a treaty with tbe Panamanian Minister Extraordinary and Plenipotentiary in Washington. D.C. on substantially the same terms and on identical money terms previously offered Colombia. It guaranteed the independence of Panama. The treaty was unanimously ratified by the new Panamanian government on December 3, 1903; the U.S. Senate gave its advice and consent to the treaty on February 23. 1904. The T'nited States under the treaty paid $10 million for the 10-mile wide zone across the Isthmus and an annuity for the right to operate the Panama Railroad (as explained heretofore — not in any sense rent) of .?250.000. This annuity was increased in a 1955 treaty to .$2,300,000. The treaty describes the zone as "lands granted" to the United States. Panama has repeatedly stated that the zone was "ceded." The U.S. Supreme Court in 1907 ruled the Canal Zone was ceded and that tlie United States had perfect title. Tender Articles VI and XV of the 1903 treaty through a Joint Commission, tbe United States bought the land from the owners of the land within the Zone and acquired title in all cases in fee simple. Substantial amounts of money were paid to these owners. Having first rendered the disease-infected Canal Zone habitable by a three- year sanitation program that conquered both the death-dealing yellow fever and malaria ("largely) the United States completed the Canal in 1914 at a then cost of ,'5366.650,000. The first ship passed on August 3. 1915. The United States has an investment there now of approximately $6 billion. In 1922. Colombia, the nation that felt aggrieved by the events of 1903. made a complete settlement fully adjusting all differences in a treaty negotiated dur- ing the Wilson administration and ratified in 1922 for which the United States paid r'oTombia $25 million. Before closing. I comment on the report concerning the alleared bugging of the Panamanian negotiations. There was no finding that such did NOT occur. If it did and if pressure was applied by the Panamanians to Bunker and Linowitz upon discovery of the bugging by the Panamanians, who could be naive enough to suppose that either Bunker or Linowitz would reveal that they have been blackmailed into proposing the pending treaties and implementing agreements in their present form? Incidentally, the latter can be freely amended so as to modify the treaties themselves once the treaties are ratified. During his 1976 campaign, President, then candidate. Jimmy Carter, stated unequivocally : "I would never give up complete control or practical control of the Panama Canal Zone." The proposed treaties would immediately extinguish all U.S. control, prac- tical or other. Panama would forthwith become the sovereign, exercising all sovereign power and control. Sovereign power and control are inseparable. If we surrender power as the treaty provides, we lose control. In effect, we have a management contract at our expense for the next 22 years with the same responsibilities we now have for canal operations but with no control or authority. The latter would be vested in the host country — Panama — as it always is. Over that period, we have the privilege of disbursing to them somewhere between $70 and $S0 million per year while underwriting all costs of operation, maintenance, repair and rehabilitation. Over and beyond these amounts, collateral agreements not covered by the treaties for economic aid and other purposes could, over the 22-year span, aggregate as much as .$2.2 billion. Panama's population is 1.5 million. This aggregate would approximate nearly .$1467 per capita for each Panamanian. On a per capita basis for the United States, this would be the equivalent of a payment of .$322 billion. Argiiments that technically the United States is not the sovereign, notwith- standing that it now possesses in perpetuity the exclusive right to exercise sovereign power (to the exclusion of the exercise of J:uch power by Panama) are meaningless and border on the alxsurd. These arguments are neither germane 127 nor sensible. Unless the present power of the United States over the Cnnal Zone (and tlierefore over the Canal itself) remains undiminished, the government of the United States would place itself in the untenable position of accepting responsibility without authority. This we must not do. There can be no com- promise here. It would not work. It never has whenever it is required to work. The proponents contend that the language in the neutrality treaty which states that the parties will maintain "the regime of neutrality" gives the United States the right of intervention if necessary. These words are similar to those of the Hay Pauncefort Treaty of 1901 between Great Britain and the United States. No one has ever contended that this gave rise to any British intervention rights. And as noted hereinbefore, Dr. Escobar flatly denies that the words confer on the United States any such rights and he also flatly denies that the United States may decide what would constitute a breach of neutrality. In the premises, the word "neutrality" in Panamanian eyes would apply to everybody as the treaty itself states. So that the Soviets or their proxies, the Cubans, can be provided with naval base facilities at Colon or Panama City or both, and Pan- ama undertakes no obligation not to be "neutral" in favor of Cuba and the U.S.S.R. Soviet naval facilities in Panama were discussed as recently as July 16, 1077 as hereinbefore mentioned, while the Soviet delegation was in Panama to conclude an economic treaty with Panama — naval facilities and a sea-level canal. The real issue, the real choice, is whether we should stay or leave altogether. The answer should be clear. We cannot leave. We cannot surrender in the face of threats and duress even if there were an explosion if the treaties are not con- firmed. But there will also be violence if the treaties are confirmed. The Pana- manian radicals, encouraged by Escobar, promise this already. United States influence in this vital area is seriously impaired by the extension of Commu- nist power and influence outward from Cuba and by our past defeats and re- treats. The western world and our allies in the far east already doubt our resolve and will to defend ourselves. And so too, perhaps, do the Soviets. There is ample room to deal fairly and equitably with other but much less im- portant problems on the Isthmus without these treaties. Testimony By the Honorable Ronald Reagan Before Subcommittee on Separation of Powers of the U.S. Senate Committee on the Judiciary, Washington, D.C., Thursday, September 8, 1977 Mr. Chairman and members of the subcommittee, thank you for inviting me to appear before you this morning to testify. You are concerned, as I am, with Constitutional and other issues arising out of the proposed Panama Canal treaties, and 1 appreciate this opportunity to share my views with you. It is necessary first to comment on the Constitutional issue. Even though I am not a lawyer myself, I can appreciate the hours of research lawyers put into these matters. In reading about the Panama Canal, its history and its operation, as well as its national and international significance, I found myself spending more and more of my time studying the legal cases and opinions which bear on the Canal and our relations with Panama. There is a plentiful supply of logic and common sense in those cases and opinions. The Executive branch argues that the President's treaty-making powers under the Constitution are enough to dispose of U.S. territory and property without any implementing legislation by the Congress ; that transfers of property as specified in a treaty become self -executing once the Senate ratifies the treaty. Historically, Congress has held to a different view, though there have been enough ambiguities over the years to revive the argument with each new cause. At a glance, the United States Constitution does seem to be ambiguous about the matter : Article II, Section 2, Clause 2 gives the President authority to negotiate and enter into treaties. Article VI, Section 2 declares that treaties are the supreme law of the land. But, the Constitution also places a Congressional act and a treaty on the same footing. Article IV, Section 3, Clause 2 grants "The Congress," meaning both houses, the power to dispose of territory and other federal property. Treaties, of course, must not be in violation of the Constitution which grants various powers to the President, the Congress and the States. All of these, at face value, are unlimited, but in reality they are subject to the limitations imposed by other sections of the Constitution, in the form of specific prohibitions, or by the fact that the Constitution vests concurrent or exclusive power in certain units of the government. Whetlier the proposed Panama Canal treaty needs implementing legislation in order to dispose of U.S. property lies in this question of "concurrent" versus "exclusive" power. In his recent paper titled "The Treaty Power and Congressional Power in Conflict: Cession of United States Property in the Canal Zone to Panama," Kenneth Merin, Legislative Attorney of the American Law Division of the Library of Congress, makes the point that, "The Constitutional issue is not, or should not be, involvement of the House of Representatives in treaty negotia- tions," but "* * * whether, by virtue of Article IV, Congress exercises exclusive or concurrent power over the disposal of territory and property." Presumably, if it could be proved that Congress' power is concurrent, the pro- posed Panama Canal treaties would be complete and self-executing if ratified by the Senate. If, on the other hand, the weight of the evidence is for the other view — that the Congress holds exclusive power over the disposal of territory and property — then Senate ratification is not enough. Implementing legislation by the House of Representatives would be required. I believe that careful examina- tion of legal cases as well as historical precedent leads one to the inevitable con- clusion that Congress does hold exclusive power and that implementing legisla- tion will be needed in the case of the Panama Canal treaties. Now. the Executive branch may cite as evidence to support its position the treaties we entered into in the last century with a number of Indian tribes. In these treaties we appeared to be ceding land to the tribes without requiring im- plementing legislation. The practice was stopped altogether more than a cen- (129) 130 tury ago. with the passage of the Indian Appropriations Act of 1872, but a closer look at the Indian land treaties shows they were very different from this pro- posal to turn over U.S. property in tlie Canal Zone to'a foreign government. The American Indian tribes have always had a unique relationship with the federal government and have not been considered foreign nations. When lands were turned over, the tribes were usually given 'i-ight of occupancy", with ulti- mate authority over the lands still to be held by the federal government. Even in cases where tlie treaties gave the tribes the land in fee simple, the govern- ment reserved the right of eminent domain and sometimes the right to hold veto power over transfer of the land to tliird parties. Neither of these reservations would apply, of course, when turning property over to a foreign nation, such as Panama. Other arguments will be put forward to support the contention that imple- menting legislation is not needed in order to dispose of our property in the Canal Zone. One may have to do with treaties which involved boundary claims. The United States lias entered into boundary settlement treaties several times in its history, swapping pieces of land here and there without any implementing leg- islation from Congress. Again, on closer examination, each settlement of a boundary dispute turns out to have been a matter of recognition of the Tightness of the claim of our nation or the other one involved, and not a matter of outright cession of territory. Tlie case of the Ryukyu Islands might be cited, too. We turned these islands l)ack to Japan in 1972, following ratification of a treaty without implementing legislation. In the 19.j1 peace treaty with Japan, however, the Japanese did not renounce their right or title to the Ryukyus, as they did to certain other pieces of territory, so that when the time came to discuss the matter further there was no serious question of ownership. So much for tlie flaws in the arguments that are put forth to support the idea tliat the new Panama Canal treaties can be used to turn over U.S. property with- out special implementing legislation. The strongest evidence to support the op- l)osite assertion is the past record of disposal of U.S. propertv in the Canal Zone itself. I have read thousands of words of newspaper and magazine copy and heard many television and radio broadcasts about the Panama Canal treaty issue, but have seen or heard nothing about these cases in the news media. Yet, their sig- nificance cannot be underestimated in establishing that legislation will be re- quired of Congress because of its exclusive power to dispose of territory and property. Back in 1932, our government wanted to build a new legation building on land inside the Canal Zone. It is not proper, of course to build a legation on one's own territory. So, a bill was passed by Congress to authorize the Secretary of State to adjust the boundary between the Canal Zone and the Republic of Panama in order to turn the land for the legation building over to Panama. Ten years later, the Senate debated approval by Joint Resolution of an Executive Agreement to transfer some land and property in the Canal Zone to Panama. The very question of whether this should be done by treaty — requiring only Senate ratificati(m — or by Executive Agreement — requiring consent of both houses — was hotly debated. Tlie measure was approved, underscoring Congress' Article IV powers. Early the next year, 1943, the House Committee on Foreign Affairs held hearings on the land transfer in question. Its report adds weight to the argument for requiring implementing legislation in the current case. It said. "Congressional approval of the Executive commitments to Panama is sought in the form of legis- lation because there is involved: (a) A disposition of property of the United States; and (b) an appropriation of funds, both requiring an exercise of the legislative power, independently of the treaty-making power. Article IV of the Constitution provides that 'The Congress shall have power to dispose of * * * the territory or other property belonging to the United States'." Our 1955 treaty with Panama provided for transfer of real property, stating that some would be transferred immediately and the rest with Congressional authorization. During the hearings on the treaty, however, a State Department representative testified that the legislation would be needed in order to implement the transfer of all the property in question. A number of Supreme Court decisions over the years has reaflBrmed the exclusive nature of Congress' power to dispose of territory and property under Article IV of the Constitution. 131 In the face of all the historical and legal evidence indicating that implementing legislation from the Congress will be necessary in the case of U.S. property in the Canal Zone, it is hard for me to believe that the P^xecntive branch would want to circumvent the Congress' rights and responsibilities in this matter. If our foreign i^olicy is to be fully effective, cooperation of the Congress is a vital ingredient. OTHER FACTORS The Constitutional issue is of great importance, but so is the security of the United States and the Western Hemisphere. I have not yet received a copy of the treaty draft to read, but members of my staff and I have been briefed on its contents by Ambassadors Bunker and Lino- witz and other members of the U.S. negotiating team. I believe the ambassadors worked earnestly and hard under difficult circumstances and there are some commendable ideas contained in the proposed treaties. But, I also believe tliey have an overriding — indeed a fatal flaw. They proceed from a false premise, that we can expect reliable, impartial, trouble-free, secure operations of the Canal in the future by relinquishing the rights we acquired in the 1903 treaty. In that treaty we acquired the rights of sovereignty over the Canal Zone, to the exclusion of the exercise of such rights by the Republic of Panama. We did not acquire the Canal Zone as we did the Louisiana Purchase or Alaska. Many people think we did, but the fact is that the Canal Zone is unique. It seems clear, from the language of tlie 1^)()3 treaty, thar the intention of our government was to acquire a firm, unshakable legal basis for building, operating and defending the Canal. The language that says we shall act "as if we were sovereign" underscores the point, for we did not acquire the Canal 2iOne for the purpose of extracting minerals, tilling the soil or establishing a mercantile colony. It was a single-purpose enterprise. But, the important thing to remember is that only one nation can exert sovereign rights over a given piece of land at one time, and the 1903 treaty made it clear that we would do so in the Canal Zone and that the Republic of Panama w^ould not. To this day, it is those rights of sovereignty which undergird our ability to operate and defend the Canal. We cannot be kicked out summarily on the whim of some Panamanian government. Once those rights are removed — and they will be removed immediately if the new treaties become effective — there is nothing to prevent a Panamanian regime from deciding one day to nationalize the Canal and to demand that we leave im- mediately. That would present us with the very thing the treaty advocates say we want to avoid ; confrontation, or its alternative, unceremonious withdrawal in the face of an arbitrary demand. For more than 60 years we have operated the Panama Canal efficiently, im- partially and on a not-for-profit basis. The nations of the Western Hemisphere have come to rely on our stable presence there to make sure that their commerce would get through unhindered. We cannot be certain, if these new treaties go into operation, that key personnel now operating the Canal will not leave a great deal sooner than expected, thus bringing into question the smooth operation of the Canal. We cannot be certain that, as the American presence withdraws from the Canal Zone, new demands for accelerated withdrawal will not be made under threat of violence. We cannot he certain that outside influences hostile to Hemispheric security will not make their presence felt much greater than before in Panama. W^e cannot be certain that Americans operating the Canal will not be harassed by an unstable and power- hungry dictator. Fidel Castro, whose interest in exporting revolution is well known, has made quite a show of his friendship for the current military regime in Panama, And, just this summer, a delegation from the Soviet Union visited Panama to look into trade, investigate possible plant locations and even the possibility of open- ing a bank in Panama. It should never surprise us that whenever the United States withdraws its presence or its strong interest from any area, the Soviets are ready, willing and often able to exploit the situation. Can we believe that the Panama Canal is any exception? Although the proi)osed second treaty would continue indefinitely beyond the expiration of the first one in the year 2000, the question must be asked, does it really provide what it says it will, which is the unilateral ability of the United States to step in to defend the Canal if its neutrality is threatened? I believe we ^ill make a very grave mistake if w^e let ourselves be inveighed into debating what the treaties do or do not say. Yes, on paper, we are told we 132 have the right to step in — even after we have turned over control and removed •our forces. But will we? We are told by the treaty advocates, there will be unpleasantness and trouble if we don't accept these treaties. The same people then assure us we can march back in if there is trouble. But once we have said, in effect, "We don't want trouble ; we'll give up the Canal," have we not also said, "If the government of Panama, encouraged by leftist allies, plays fast and loose with the treaty," we'll decide — since we are giving it up anyway — "why bother?" I don't believe such a concern is unjustified, given the recent history of our nation. We have shown a reluctance to meet the responsibility of free world leadership, even on occasion to abandon allies. We have been told the Canal Ls declining in terms of military importance and yet all but a handful of our navy ships can transit the Canal. The great bulk of material bound for our forces in Vietnam went by way of the Canal. And who can say what shape our navy will take 20 or 30 years from now? It may very well consist in this missile age of small, fast ships relying on quick accessibility from one ocean to another. President Carter cites a statement by the Joint Chiefs of Staff that the treaty is satisfactory in terms of our defense needs. I mean no disrespect to these fine men. Yet, in a recent letter to the President, four former Chiefs of Naval Operations — now retired and, therefore, free to speak out on this issue — underscored the im- portance of our keeping active control of the Canal. Admirals Arleigh Burke, Thomas Moorer, Robert Carney and George Anderson said, in part, "As long as most of the world's combatant and commercial tonnage can transit through the Canal, it offers inestimable strategic advantages to the U.S., giving us maximum strength at minimum cost. "By contrast, the Panama Canal, under control of a potential adversary, would become an immediate crucial problem and prove a serious weakness in the overall U.S. defense capability, with enormous consequences for evil." Our continued presence at the Canal inhibits potential adventurers from trying to make international trouble there far better than would a piece of paper grant- ing us the right to return after we had once departed. It is no secret that the Soviet Union believes control over some 16 vital sea lane "choke points" means dominance of the world's oceans. Our presence at one of the busiest and most important of these "choke points" is a definite deterrent. There is another factor at work which could be harmful to the security of the Hemisphere because it could further question our willingness to maintain a leadership role. Let us remember that, for much of the time, while these treaties were being negotiated, we were doing so (especially in the last two years) under repeated threats of violence. True, the threats slackened off this year, possibly because General Torrijos saw victory ahead. Some may believe the threats were a bluff, but the fact remains that we did continue to negotiate and, apparently, made concessions in the face of threats. The President seemed anxious to speed up and bring the matter to a conclusion in spite of his previous declarations that he would never relinquLsh effective control of the Canal. If we accede to a treaty under such circumstances, will this mark the end of further demands? If there are, indeed, radical guerrillas in Panama (as we are told) ready to blow up the Canal if we don't sign a treaty, what assurance do we have that they will be satisfied with the terms of these treaties? Already, the government-sponsored student federation in Panama has issued a manifesto sup- porting the treaties, but also indicating that "the struggle will continue" so long as there is any American presence at the Canal. If they should press Torrijos to ignore these treaties, would we not hear the same arguments from the same people for giving in to those new demands that we are hearing today? Whether or not these treaties ever go into effect, we can expect trouble from leftist elements in Panama and elsewhere. Yes, failure to ratify the treaty will offer an excuse for demonstrations and riots in Panama and very possibly in the United States. And, behind the scenes, the Russian Bear will do all it can to destabilize the security of the Hemisphere and cause a global whirlwind of un- favorable press aimed at us — not because we didn't ratify the treaty but because that is their normal procedure where we are concerned. LATIN AMERICA The treaty adTOcates say failure to ratify and implement these treaties will harm our relations with all of Latin America. Is it possible they believe they are betting on a sure thing? Historically, our Latin American neighbors have felt the 133 need to be somewhat on guard against a United States which to them is the "Colossus of the North." A natural reaction has been to vote as a group on inter- American matters in international forums. This does not mean, however, that all Latin American nations have identical interests or think alike. As a matter of fact, a surprising number have privately expressed concern about our possible withdrawal from the Canal. Frankly, I believe we can question not only the warnings about possible de- terioration in our relations with Latin America if we don't ratify the treaty but also the glowing promises of a new era if we do. The fact is we do not now have a coherent policy toward our Western Hemi- sphere neighbors. And we should because, over the next few decades, our con- tinued, prosperity, possibly even our survival will be closely linked to that of our neighbors within this Hemisphere. I do not believe these treaties are a substitute for such a policy. I do believe that the U.S. negotiating from strength and not meekly yielding legitimate rights and responsibilities out of a desire to avoid unpleasantness, can be truly helpful to the people of Panama and to all the Hemisphere. Some of our neighbors need aid we are in a position to give. With others, the need is for increased technology and trade; and with some, unhindered access to capital for needed development. Once our government recognizes that we must all sink or swim together maybe we'll stop some of our self-defeating practices. It is self-defeating to throttle a nation's ability to obtain capital because it doesn't run its internal politics precisely as we would like. It is self-defeating to keep a neighbor from buying weapons for its police force because someone in Washing- ton sees terrorists as mere political dissidents. Thus, we encourage more terror- ism and hurt a nation's chances for economic recovery. Our neighbors in Latin America ask that we learn enough about them to have some understanding. Sometimes, their problems are similar, sometimes different but each nation is deserving of understanding. What especially do the Panamanians want? That isn't an easy question to answer since there is no elected government, nor can we be sure a plebiscite of the people on the treaties would give an accurate answer in view of the nature of the government. We are left with some educated guesses about the wants of the Panamanian people. Thanks in large part to the Canal, the Panamanians have the highest per-capita income in Central America and the third and fourth highest in all of Latin America. But their economy is near bankruptcy. They are plagued by in- flation and unemployment while natural resources lie undeveloped. Contrary to what has been implied about my own position, I do not believe that in rejecting these treaties we should simply demand the status quo and not seek answers to problems regarding our relations with the people of Panama. Early in this century, we realized our dream of a waterway connecting the two great oceans. Panama, then a neglected province of Colombia, also realized a dream — to be free and independent. The two dreams were inter-related. Many in our country thought the Canal should be in Nicaragua. The Panamanians knew their only chance to have independence and prosperity lay in the Canal being built in Panama. And so it was that Panama ratified the Hay-Bunau-Varilla Treaty months before it was ratified by our own government. We have nothing to be ashamed of and much to be proud of. We created one of the great wonders of the world and it is doubtful any other nation could have done so. More than that, however, we have managed the Canal fairly for all nations at no profit to ourselves and with great economic benefit to Panama. Not only did we deal fairly with the governments of Panama and Colombia, we also bought every piece of privately owned land in the Canal Zone in fee simple from the individual owners. And may I point out the Canal Zone is not flanked by Berlin Walls. The people of Panama can go in and out of the Zone freely at all times. But times change and the Panamanians have a growing feeling of nationalism. We, on the other hand, cannot weaken our ability to provide security for our nation and the entire Western Hemisphere. Can ways be found to satisfy some of their national aspirations without compromising our ability to meet security requirements? Though I believe that the basic flaw of the proposed treaties requires that they not be ratified, there are alternatives we should examine. Let us explore, for example, broadening participation in Canal policy making. The proposed basic treaty calls for a governing board with five U.S. and four Panamanian directors till the year 2000, when it expires. An alternative to con- 134 sider would be a board comprised of a group of permanent U.S. seats, another group of permanent Panamanian seats and a third group of term seats to be ro- tated among Canal-using nations. Another possibility might be to have that third group made up of representatives of our neighbors, the nations of North and South and Central America. In the case of the first alternative, the international directors might be drawn from a Panama Canal Users Association to be set up at the time the plan is activated. Nations paying dues into such an association for the benefit of Canal improvements might have as one privilege discounts on tolls under a revised and increased toll system designed to operate the Canal in the black. The proposed treaties call for an increase of the money we pay Panama annually from $2.3 million to an average income from Canal operations of as much as $80 million.^ There is no assurance this would benefit the Panamanian people. A mod- ernization program — the Terminal Lake Third Lock plan — could definitely help the people. It would be approximately 10 years in the building and cost between one and two billion dollars. We could make certain that Panamanian workers and contractors were engaged extensively in the program which would directly benefit the people and the economy of Panama. Such a modernization of the Canal would make it capable of handling all but a possible few Super Tankers. This could have important implications for the cost of moving Alaskan oil to Gulf Coast refineries. Then, too, increased speed of tran- sit and general traflic w^ould mean increased toll revenues which could further benefit Panama through a sharing formula. These are two alternatives for discussion. I'm sure there are more available for a United States willing to do what it can for a neighbor, without abdicating its own responsibility to permanently provide an open w^aterway for all the world's shipping and a guarantee of security for the Western Hemisphere. HUMAN RIGHTS In conclusion, I would like to touch on the subject of human rights. The concept of individual human freedom is deeply ingrained in us here in the U.S. Though I believe the best way to help human rights flourish elsewhere is to set the best possible example in our own country, I realize that some idealists believe we should be more assertive in getting others to follow our example. Now that a high standard of sensitivity to human rights has become a cornerstone of our govern- ment's policy, I think it is not only fair but mandatory to raise the question with regard to the repressive regime in Panama with which we have been negotiating. And, I do not accept our negotiators' effort to characterize it as merely authori- tarian. Human rights criticism, public and private, has been leveled at a number of nations in the Western Hemisphere which have always been friendly toward us, yet I cannot recall a single word of criticism by any representative of our government toward Panama in this regard. Yet, Freedom House, which is recog- nized internationally as an impartial monitor of the status of human freedom, rates Panama as one of 67 nations in the world that is "not free". They rate 42 as "free" and 48 as "partly free". In its annual survey, Freedom House rates political rights on a scale of one to seven, with seven being least free. They rate Panama as a seven. They rate civil rights on a similar scale, and Panama receives a six. Documents have been widely circulated in this country, with names, dates, places, and details of alleged violations of human rights by the regime in Pan- ama. I, personally, have received a letter from a Panamanian businessman who was forced, at gunpoint, from his automobile some months ago and sent into exile because he had dissented. Can we afford a double standard in this most fundamental of areas? I don't think s-o, for to do so says to the world that we are cynics, using the issue of human rights only as a tactic to produce specific political results. Worse, it may say to those w^ho hold out hope of reduced oppression and ultimately the res- toration of freedom that Americans are, when you get right down to it, hypo- crites. The recent history of our negotiations with the Panamanian dictatorship does nothing to dispell such concerns. So, I leave you with this question : can we separate Canal negotiations from human rights when those rights as we know them are severely limited in Panama? ^ Source : Nicholas Ardito Barlottn, Minister of Planning and Economic Polic.v, Republic of Panama, August 19, 1977 speech. 135 CONCLUSION Finally, what conclusions are to be drawn about these treaties? Let me reiterate that : The Panama Canal is vital to our security and that of the Western Hemisphere ; We provide the one sure guarantee that the commerce of the world will have continued access to this waterway ; The rights of sovereignty we hold in the Canal Zone are the foundation of our ability to remain there to operate and defend the Canal ; The proposed treaties relinquish those rights and do not provide adequate guarantees against future threats to the Canal ; Alternatives should be sought which recognize the aspirations of the Pan- amanian people, without compromising our ability to meet security requirements. Thus, the treaties as proposed should not be ratihed. Furthermore, it seems clear from legal opinions and historical precedent that the ratification process will require implementing legislation by the Congress. Thank you again for inviting me to appear before you. 99-592—78 10 A Statement by William J. Rogers, Past Natioxal Commander, the American Legion, Before the Committee on International Relations, U.S. House of Representatr^es, September 15, 1977 Mr. Chairman, members of the Committee on International Relations : It is a distinct pleasure for me to appear before you today representing the American Legion. Needless to say, we are each aware of the thousands of inches of news- print and the hours of television coverage which have been devoted to the pro- posed Panama Canal Treaty in the past month. My reason for appearing before you today is two-fold : first, to represent the viewpoint and position of the Amer- ican Legion as adopted by our recently concluded 59th National Convention and my observations in traveling during 12 months throughout the United States and Panama. Secondly, I will spell out — objectively and dispassionately — what our concerns are and why we object to this specific treaty. During these past 12 months, it has been my honor and privilege to visit all of the Departments of the American Legion. We have a department in every state and territory making up the United States. At each meeting, without exception, our members were concerned about the possibility that the United States Govern- ment would relinquish sovereignty of the U.S. Canal Zone and Canal. Further- more, we would give it to a dictatorship in Panama which runs contrary to our natural instincts as American citizens. Today, I have come to speak for our four million members of the American Legion and the American Legion Auxiliary. We represent miners in West Vir- ginia ; grain growers in Illinois and Iowa ; energy producers of Texas ; machinery manufacturers in New York ; and shipping industry of all states where rivers and harbors open to the sea . . . altogether we represent a composite and microcosm of the United States. For most of us in the American Legion and all our citizens are either buyers or sellers of commodities passing through the Panama Canal. Moreover, all of us are dependent on the protection of the U.S. Navy to control the seas surrounding our country in the center of the Western Hemisphere. Quite frankly, the main thrust from every Legion Post was the same, deep apprehension about the proposed Treaty with Panama. Not the least concerned were our Legion Posts in the U.S. Canal Zone. Did the United States really intend to abandon its citizens to a dictatorship? If so, what did the United States ^tand to gain from such a giveaway? I don't think it will come as a surprise to the members of this committee, but I think it may come as a surprise to certain of our leaders in the Executive Branch and to certain of our national cartoonists in recent weeks, but the typi- cal Legionnaire, who also happens to be the typical American, understands the Panama Canal situation. The average Legionnaire understands the facts and the realities of standing straight for what is right, and objecting to something which is wrong and not in the American interest. Though we have opposed any treaty which would surrender U.S. control and ownership since 1960, Legionnaires throughout the country have been given both sides of the picture. In The American Legion Magazine, which goes to every member, we invited the top spokesman for the Republic of Panama, Ambassador Gonzalez Revilla, to state the case for the Panamanian government. The Am- bassador's position to transfer ownership of the Zone and Canal to Panama was printed in full in the October 1976 issue of our magazine. Congressman Daniel Flood was invited to state the case for U.S. sovereignty in the same issue. At our National Convention recently completed in 'Denver, we invited Am- bassador Sol Linowitz to come and to take as long as he liked to state the case for giving the U.S. Zone and Canal to Panama. As you know, Ambassador Lino- witz is articulate and knowledgeable on all the issues as the U.S. negotiator, and presented the Administration's viewpoint to our Foreign Relations Commission for well over an hour. Since this was the major issue to be decided by our National Convention in 1977, we decided to set the Panama resolution aside from other foreign policy (137) 138 considerations and vote on it separately, by roll call department by department if necessary, so we could be sure that the National Convention did not trespass on the will of our members, so we would know the real vote. After the Chairman of the Foreign Relations Commission, Dr. Robert P. Foster, seated here beside me, read the resolution, the convention members in a voice of one, called out for a vote. The vote to oppose giving the U.S. Zone and Canal away was unanimous. Although there w^ere over 3,000 delegates representing the 2.7 million members of our organization, there was not one dissenting vote ! The silence of the "nays" was as persuasive as vocal shouts of the "yeas." The truth is that The American Legion has expressed its collective judgment. The full text of that resolution is appended to my statement today. I will now discuss the reservations and objections which we have to this pro- posed treaty. The first is the strategic and military importance of continued U.S. control of the Canal and the Canal Zone. At the onset, we realize that the United States has a one-ocean Navy with a global responsibility. Today all but 13 of the ships in the U.S. Navy — the exception being the large aircraft carriers — can pass through the Canal. Moreover, we, along with the Congress, must be "forward looking" and long-range prognosticators regarding the true effects now and in the future of the proposed treaty. As each of you are aware, we have made a national commitment to the "mini-carrier" concept. And, when they come on line in 3-5 years. I have been assured by the Navy that they can traverse the Canal, making the Canal even more important in a military sense in the years ahead. Hanson Baldwin has recently written : "It is ironic, indeed, that in an era when the U.S. Navy needs the Canal to a greater degree than at any time since the end of World War II, Washington is considering its abandonment. T^he Navy today is in the same strategic bind it was in prior to World War II : It is a one-ocean Navy (in size and power) with two-ocean responsibilities. We are outnumbered in submarines and surface ships by the Soviet Union, and, more than at any period since 1945, the Navy must have a quick trnn^fer capability between Atlantic and Pacific in order to meet sudden crises. "General V. H. Knilak, USMC (Ret.), writing in the summer 1975 issue of Strategic Review, summarized the Canal's naval importance : "In truth the Pan- ama Canal is an essential link between the naval forces of the United States deployed in the Atlantic and in the Pacific. It is only because of the waterway that we are able to risk having what amounts to a bare-bones, one-ocean Navy." "During the Vietnam War about 98 percent of all supplies for our forces were shipped by sea : of this total, approximately 33 percent were loaded in East and Gulf Coast ports and transited the Canal. The volume of military-siX)nsored cargo in the four years from 1964 to 1968 increased, for dry cargo, by some 640 percent and for petroleum products by about 430 percent. And the number of U.S. Government vessels (chiefly naval) transiting the Canal increased from 284 in 1965 to more than 1,500 in 1968." Within the military community, and among the retired and active military, there is great diversity of opinion. In addition to the historic letter of four dis- tinguished Chiefs of Naval Operation, including the former Chairman of the Joint Chiefs. Admiral Thomas H, Moorer, saying that the proposed Treaty is contrary to the security interests of the United States, we are hearing from many military leaders and the majority of these opinions, like the majority of our citizens, are opposed to the give away of the Zone and the Canal. From a military viewpoint, a commander never gives away strategic territory which he may have to fight to regain. The U.S. Canal Zone is strategic territory. All the military, both active and retired, agree on that point. From an economic perspective, the Canal is vital to United States interests. In 1975. approximately 14,000 ships transited the Canal of which 45 percent originated in the United States and 23 percent were bound for the United States. No other nation even approaches the invaluable, economic stake whioh we have in the Canal. However, the Canal is important to all maritime commercial nations since 96 percent of the world's merchant fleet can transit if. Tlie Canal is just this year assuming an additional commercial importance to the T'nited States as Alaskan oil begins to flow. When the Alaskan pipeline reaches its full capacity, it will yield 1.2 million barrels of oil a day. The west coast of the I"fnited States can accommodate only 700.0CK) barrels a day. This means that approximately 500,000 barrels a day cannot be used on the west coast, and must be transported to the east. No pipeline has yet been constructed across the United States, and the trip around the Horn, as has been demonstrated. 139 is not economically feasible. Unhindered use of the Panama Canal is critical until an adequate pipeline can be constructed. Moreover, at the present time, the United States has an over-all investment in Panama of $7 billion. By the year of our total evacuation under the terms of the Treaty, the interest will have grown to $9.3 billion. To add insult to injury, the Treaty proposes that we pay some $50 million per year, plus about $350 million in economic and military aid to have the Torrijos group take over the territory and property. Contrary to popular argument, control of the Canal by the United States serves the best economic interests of the people of Panama. In 1976, U.S. agencies purchased over $29 million worth of goods in Panama, and we paid over $108 million in wages to non-U. S. citizens. United States private investments amount to 50 percent of the capital investment in Panama. And U.S. employees spent $39 million there. In the Preamble to The American Legion Constitution, we pledge to "safeguard the principles of justice, freedom and democracy" — in 1977 terms this translates into human rights. As this Committee is aware, Panama is a dictatorship, or in the words of Ambassador Bunker before Congressman Murphy's committee, an "authoritarian" government. The aspect of the Torrijos government which is most significant, is that it is a repressive dictatorship. Freedom House, the respected organization which ranks countries on the basis of human rights, gives Panama the lowest rating in Latin America. Panama received the same 1977 rating on political and civil liberties as tlie Soviet Union, and was rated even lower than Cul)a. Gen. Torrijos came to power in Panama by a coup and is governing witliout the consent of the people. The truth is that since Gen. Torrijos particii)ated in the overthrow of Panama's constitutional government by guni>oint in 19GS, l.G mil- lion people have lost their human rights. There is no political party except the Communist Party, called the People's Party, El Partito del Puel)lo. Furthermore, the monies fi'om Panama Canal annuities do not go directly to the people, the money goes to the Torrijos power group. As you are probably aware, the Panamanian constitution retiuires a plebiscite vote of the people for ratification of any new Treaty, which will be held on October 28. The said irony is that the controlled and censored Panama press — - "guided" in the terms of our chief negotiator — will never give a full and objective account of the Treaty to the Panamanian people. Another concern which we have is the political association and economic stabil- ity of the government in Panama. On the economic side ; under Gen. Omar Torrijos, Panama's national debt has grown from $167 million to $1.5 billion. The debt serv- ice alone will consume 39 i>ercent of that country's budget this year. Panama's Department of Planning indicates that to refinance loans coming due, together with the $139 million deficit, a total of $323.6 million will be required. Obviously, Panama cannot financially afford to have the Treaties rejected either. Politically. Panama's Omar Torrijos has alined himself with the most repressive pro-Communist regimes in this hemisphere — those of Cuba's Fidel Castro, Jamaica's Michael Mauley, and Guyana's Forbes Burnham. According to U.S. Information Agency, Torrijos issued a communique last April with pro-Arab terrorist dictator Col. :Moammar Qaddafi of Lil)ya denouncing what they called "Zionist aggression by Israel." The communique was issued at the end of a week- long visit by Torrijos to Libya, for the purpose of creating close economic and political ties between the two countries. Jack Anderson and Les Whitten stated in their nationally syndicated column on June 16 that they had evidence that this Torrijos-Qaddafi meeting had also re- sulted in a secret deal between Libya and Panama to give Arab extremists a foot- hold in the Americas and to cooperate with the Arab boycott against Jewish manufacturers. Torrijos has also busied himself with making closer political and commercial ties with the Soviet Union. Again, according to the U.S. Information Agency, top officials from the Soviet Politburo and Central Committee of the Soviet Com- munist Party visited Panama last June. Almost immediately after the Soviet Politburo team left Panama, a Soviet commercial delegation headed by Nikolai Zinoviev arrived and concluded a major Soviet-Panama commercial agreement with the Torrijos regime. This agreement, according to news reports in the Torrijos-eontrolled newspaper Critica. could result in the opening of a Soviet bank to Tun Soviet commercial activities throughout Latin America, as well as a series of other multi-million-dollar-trade and construction projects with Panama. 140 Whether it was a Treaty of intent or as pact of infinite promise, we don't know. The treaty was signed by Omar Torrijos' brother-in-law, Marcelino Jaen, and Soviet leader Nikolai Zinoviev who is also listed as a KGB agent. After the signing, Panama's Jaen declared the Soviet treaty * * is an event of deep historic signing, not only for our country, but for the American continent as well, who are always facing strong forces that represent a philosophy that is contrary to the destiny of Latin America." Of deepest concern is Torrijos' close ties with Fidel Castro and Cuba. Cuba under Castro continues to aggressively export and pursue communist domination and control of other nations. Just this past week-end, the New York Times re- ported that 4,000 more Cubans were sent to Angola recently to "stabilize the nation's most serious crisis since the 1976 civil war." The 4,000 Cuban troops would increase Cuban troop strength in Angola to 19,000. This to me clearly indi- cates that Castro hasn't backed off one inch from his declared goal of communist domination of the Western Hemisphere and the world. Also of concern is the reliability of the Panamanian dictator to live up to what he signs. Panama has violated the present Treaty at least 11 times during the past two years. These violations included such militant acts as the Panamanian Na- tional Guard taking up iwsitions in December 1975 within the U.S. Zone ; attempt- ing to arrest and actually shooting a citizen in the U.S. Zone in January 1976; setting off bombs and explosions in the U.S. Zone in October 1976, and capturing a vessel, the Sea Wolf, which was operating inside Canal Zone waters and burning and desecrating our United States flag. Our Ambassador has protested such lawless Treaty violations, but one must question the wisdom of appeasing and making further concessions to a govern- ment whose recent history is pockmarked with deliberate violations of the cur- rent Treaty. If our current Treaty with Panama is being violated on a routine basis, where is the logic that such attitudes and behavior will improve between 1977 and 1999, the magic year when Torrijos is supposed to get everything, lock, stock and barrel ? I would like to turn now to the question of United States sovereignty. Many of the arguments for the switch in sovereignty and much of the conscious or sub- conscious motivation for it stem, in part, from ignorance or distortion of the manner in which the Panama Canal territory was acquired by the United States and of the wording of the original Treaty of 1903. Contrary to these assertions from public oflScials who should know better, we did not steal the Canal, nor does Panama have residual, titular, or any other kind of sovereignty over it. The United States bought the Canal territory — a strip across the Isthmus of Panama some 50 miles long and 10 miles wide — at a cost to the American taxpayer that far exceeded the cost of the Louisiana Purchase, the Mexican cession, the Florida Purchase, the purchase of Alaska, or any other territorial acquisition. Despite current contentions by the State Department that the 1936 Treaty revi- sions recognized Panama's sovereignty over the Canal Zone, it is clear that in both wording and intent the Treaty actually re-emphasized the sovereignty, in perpetuity, of the United States. History and the law appear to indicate in no uncertain terms that there is no merit whatsoever to the concept that the Treaty of 1903 vested so-called titular sovereignty or residual sovereignty in Panama. The wording is clear and un- equivocal: "The Republic of Panama grants to the United States in perpetuity the use, occupation and control" of the Canal Zone. "The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned . . . which the United States would possess and exercise if it were the sovereign ... to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." One cannot transfer sovereignty unless one exercises it. The United States has, and will retain until Congress decides otherwise, complete sovereignty and con- trol over the Canal Zone in perpetuity. Even Gen. Torrijos in his remarks following last Wednesday's signing acknowl- edged United States sovereignty and I quote: "What nourished the hopes of Panamanians for the recapture of their sovereignty was their feeling that the North American people fundamentally harbored no colonial aspirations," (em- phasis added). I will now turn to the Treaties and the accompanying Annex and Protocol. This analysis is based upon the limited time in which these Treaties have been avail- able to this layman and I urge each member of this Committee to scrutinize these documents. 141 (1) Sovereignty is the crucial factor in the new Treaties. Both the Prologue to the Canal Treaty, and at least six other times in the document, Panamanian sov- ereignty over the U.S. Zone and the Canal is acknowledged. As I stated earlier, once Torrijos is granted sovereignty all other questions are irrelevant. (2) According to recent analysis of the Treaty, should Panama abrogate the Treaty, the United States would have no legal basis in international law to maintain its position in the former Canal Zone. (3) Article II, Section 1, of the Canal Treaty specifies that it should "be sub- ject to ratification in accordance with the constitutional procedures of the two parties." However, it would appear that the Executive Branch is seeking ratifica- tion of the treaties without seeking enabling legislation from the House of Representatives to transfer real properties, appropriation of funds and perhaps other legislation which is not spelled out, as required by the Constitution of the United States. This by-passing of the House of Representatives appears to be an usurpation of legal powers which is clearly conveyed to the House by the Constitution. (4) Article XII, Section 2(b), states that "during the duration of this Treaty the United States of America shall not negotiate with third states for the right to construct an inter-oceanic canal on any other route in the Western Hemi- sphere, except as the two parties may otherwise agree." In plain terms, the United States has surrendered its rights to negotiate for a competing canal elsewhere in the Western Hemisphere unless it has Panama's consent. (5) Article V of the Canal Treaty directs that employees of the Panama Canal Company, their dependents and other American nationals should "abide by the laws of the Republic of Panama and abstain from any activities in competition with the spirit of this Treaty." This Article also directs that they abstain from any political acts in the Republic of Panama. As I stated earlier, there are American Legion Posts in the Canal Zone and I am deeply concerned about forcing American citizens to submit to a dictatorship and their surrender of rights as Americans. (6) Article IX, Section 3, recognizes the right of ownership of improvements to realty but does not recognize the right to own real estate. While we do not know how many Americans own property in the Canal Zone, if any, it would appear that this Article condones or perhaps authorizes exappropriation of property by the Panama government. (7) Article XIII relates to payments to Panama for the right to operate the Canal. One such payment of $10 million per year from profits is cumulative which means there is a possibility that we could, over the 23 year period of the Treaty, end up owing the Panama government $230 million. Additionally, I have strong reservations and objections to the Neutrality Treaty: (1) Only Article IV of this Treaty bears upon U.S. responsibility con- cerning the neutrality of the Canal and the entire document is so vague as to be virtually meaningless. In my lay reading of the entire Neutrality Treaty. I find no assurance that the United States can intervene to assure the neutrality of that vital area. (2) Article III (e) states that "vessels of war and auxiliary vessels of all nations shall at all times be entitled to transit the canal." This statement assures the passage of warships through the canal of nations which may be at war with the United States. (3) Article VI, Section 1, states that vessels of war and auxiliary vessels of the United States and the Republic of Panama "will be entitled to transit the canal expeditiously." The exact meaning of the word "expeditiously" is vague at best. Moreover, Article VI, Section 1, of the Neutrality Treaty appears to be in direct confiict with the protocol accompanying the treaty which states that vessels of all nations will be insured permanent access to the canal "on the basis of entire equality." In brief summary, an evaluation of the facts about the Treaty have brought us Louisiana. Below Baton Rouge the river has natural depths exceeding 120 feet to the day of the signing, September 7, 1977 — a bad day for the United States. United States military and national security losses are suflicient to reject the treaty. We are giving up our naval fleet flexibility at a time when we have fewer than 400 ships in the entire United States Navy. Economic losses of the United States are difficult to calculate, but logic dictates that U.S. consumers and ex- porters are going to pay the toll increases. Additionally, the cost to the United States taxpayer is In the billions. Moreover, someone will pay the billions of dollars owed international bankers by the Torrijos government. It will not be Panama. The Torrijos government is living on borrowed money and borrowed time. 142 Politically, human rights under Torrijos are no better than they were under Hitler during the 1930s and yet by supporting this Treaty, our United States Gov- ernment is propping up a dictatorship. Worse yet, our government is forcing Amer- icans to live nnder totalirarian rule and abide by its laws and decrees. That's what World War II was all about. The pressures the White House can bring are enormous as all of us know. The resources at the President's disposition almost defy our collective imagination. The recent Treaty signing festivities were an example of Presidential style and substance. We in the Legion, while recognizing the awesome power of the Presi- dency and the Executive bureaucracy, also believe that the ultimate power in the United States resides with the people — with i^eople like our members. I will close with one question — if this Treaty is basically good for the United States, why does the Administration have to make such an effort to prove to Americans that it is in our national interest? Those of you in the House who return to your districts every two years, know what the people back home are thinking. You know the Legion Posts and grass roots opinion runs about 80 percent against the giveaway. We believe this proposed Treaty will ultimately be decided by the people. We believe this is one defeat the United States can avoid. It is a loss we need not accept and you can count on The American Legion Posts to stand firm. 50th National Coxvextiox of the American Legion. Denver, Colo., August 23-25, 1977 resolution no. 445 Committee : Foreign Relations. Subject : "Panama Canal." Whereas, the United States is the rightful and legal owner of the U.S. Canal Zone and the Panama Canal, having acquired this U.S. property through court tested treaties and agreements and mutually agreed upon payments to Colombia, Panama and the individual land and property owners ; and Whereas, the United States Supreme Court has ruled that the United States is legally entitled to sovereignty and ownership of the U.S. Canal Zone for the purpose of building, operating, protecting and maintaining a canal across the Isthmus ; and Whereas, the United States lias lived up to its obligation under the Treaty to the letter of the law ; and Whereas, the political, economic and the military factors offer conclusive evidence that it is in the vital national interest of the United States to retain sovereignty and ownership of the U.S. Canal Zone and Canal : and Whereas, over three-fourths of our American citizens consistently voice their opposition to any kind of "giveaway" or dilution of U.S. sovereignty over this territory ; and Whereas, the United States as leader of the free world has a moral obliga- tion to remain fair, firm and strong when faced with i>olitical blackmail: and Whereas, surrender of the U.S. Canal Zone would be tantamount to a major military defeat with enormous consequences for evil ; now, therefore, he it Resolved, by The American Legion in National Convention assembled in Denver. Colorado, August 23. 24, 25, 1977, that we reiterate and reaffirm our continuing and uncompromising policy in opposition to any new Treaties or Executive Agreements with Panama, relating to the U.S. owned Panama Canal and its protective frame of the U.S. Canal Zone as expressed and set out in separate resolutions adopted consecutively at each annual American Legion National Convention since the Miami Convention in 1960: and. be it further Resolved, that we strongly urge all elected members in the U.S. Congress to oppose any new treaty with the government of Panama which: (a) in any way dilutes full U.S. sovereignty, ownership and control: (b) cedes U.S. territory or property : (c) surrenders any jurisdiction and oontrol which would threaten tbe economic and security interests of the T'nited States: and. be it further Resolved, that The American Legion rejects the actions of the Executive asencies of the federal government in attempting to by-pass the Con.stitution of the United States, and we fully support Article IV. Section 3. Clause 2. of the Constitution which provides that only the Congress has the authority to dis- pose of U.S. Territory. 143 The American Legion, Washington, D.C., August 15, 1977. The President, The White House, Washington, D.C. Dear Mr. President : As 25,000 members gather here in Denver for the 59th National Convention of The American Legion, the most urgent issue before us as citizens is the threatened give-away of the Panama Canal. I have seen a copy of your telegram to Members of Congress asking approval of the "conceptual agreement" with Panama. You emphasize your interest in the public's attitude. We in The American Legion believe that such an agreement is contrary to our national interest. Mr. President, no conceptual agreement serves the public's interest when it gives the U.S. Canal Zone to the government of a dictator whose tenure is tenuous and whose methods are arbitrar>\ You know, as do our members, that once you give away sovereign ownership and control in any new Treaty, Gen. Torrijos can do as he wishes. The way would be open to nationalization of the Zone and the Canal. Torrijos could then do as he pleases about changing tolls, about denying transit to individual ships or to individual nations, about changing defense agreements, and about changing his mind on any aspect of a voluminous Treaty. The histoi*y of totalitarian regimes has taught us that dictators reserve the right to change their minds with or without the consent of the governed. Once we say Torrijos owns the Canal, the Treaty papers can lie sent to the shredder. Furthermore, the record of the Torrijos government on such matters as human rights, fair labor practice, nationalization of American properties and financial stability, causes deep concern to our members. According to judgments of the Supreme Court, the United States does have legal sovereignty for the purpose of building, operating, protecting and sanitat- ing in perpetuity a canal across the Isthmus. The Supreme Court's language is precise. The U.S. Government and our taxpayers have fulfilled our obligations under the Treaty to the letter of the law and beyond, giving Panama the highest per capita income in all Central America. Legionnaires are convinced that vital security interests of the United States will be sacrificed by the proposed treaties. Four former Chiefs of Naval Opera- tions and one former chairman of the Joint Chiefs of Staff have cited the harm such an agreement could bring. Mr. President, the admirals' words are clear and unmistakable. They are based on four decades of strategic study and loyal serv- ice to our nation. The 59th National Convention of The American Legion urges you to reconsider your decision to give this U.S. property to the Torrijos government. Such an action would threaten the military security of the United States, Latin America, and, indeed, all maritime nations. Mr. President, the Panama Canal is one of the vital geo-political assets of the Free World, a world Gen. Torrijos and Fidel Castro view with contempt. To lose such an asset to such men would be the equivalent of a major U.S. military defeat with possible catastrophic consequences. Mr. President, there is a solution for the Canal. Let us put aside political rhetoric and commission a major modernization of the Canal under full U.S. sovereignty to benefit the United States, all maritime nations and especially the people of Panama. Sincerely yours, William J. Rogers, National Commander. Statement Before the Subcommittee on Separation of Powers, Committee on THE Judiciary on the Hearing On Panama Canal Treaty, Washington, D.C, September 30, 1977^ (Remarks by Herbert R. Haar. Jr., Port of Xew Orleans, on Behalf of the Gulf Ports Association, Inc., Mid-Gulf Seaports Marine Terminal Conference and the Port of New Orleans ) I am Herbert R. Haar, Jr.. Associate Port Director, Port of New Orleans, and I am presenting this statement on behalf of the Gulf Ports Association, Inc. (GPA), the Mid-Gulf Seaports Marine Terminal Conference, and the Port of New Orleans. Six states and twenty-three individual ports are represented by the Gulf Ports Association, Inc. Collectively these ports are moving 38 per cent of all water- borne commerce in the Nation — over $30 billion in world trade. These ports also export over one-half of all grain exported from the United States of which ap- proximately one-third moves overseas via the Panama Canal. Additionally, the l*ort of New Orleans is the numl)er one importer in the U.S. of iron and steel l^roducts and 87 per cent of these imports arrive via the Panama Canal. United States Customs revenues collected from Gulf ports amounted to more than $450 million in 1975. Telegrams sent to the President and all Members of Congress by the President of the Gulf Ports Association and the Chairman of the Mid-Gulf ]Marine Terminal Conference (Ports of Eaton Rouge, Beaumont. Galveston, Gulfport, Houston, Lake Charles, Mo})ile, New Orleans and Orange) on Septem- ber 28, 1977, in opposition to proposed increased tolls under the new treaty are attached for the record to this statement. Considering the fact that the ports which belong to the Gulf Ports Association, Inc. have invested approximately one billion dollars in facilities to accommodate trade and United States revenue collections of such magnitude, it is deemed proper that these same ports should have a voice in the final terms approved for the new Panama Canal treaty. Ir is not merely a local adverse economic impact with which we are concerned. We feel that new major increases in Panama Canal tolls will have an adverse financial impact on the interior of the country, on international business, on our balance of foreign trade and on our energy problems — all of which are of na- tional concern. We, at the Port of New Orleans, and throughout the State of Louisiana are keenly aware of the adverse economic impacts which will accom- pany further Panama Canal toll increases because we sit at the crossroad of America's inland waterway system. The Port of New Orleans, due to il:s geographical location near the mouth of the Mississippi River and at the crossroads of the Gulf Intracoastal Waterway services the mid-continent of North America. Historically, it has gathered the products of mid-America and shipped them overseas in deep draft bottoms and in return, distributed the products from overseas to the industries and cities of the mid-continent. Its geographical location makes it the natural gateway for the commerce of mid-America and also makes it logistically all important in times of war and imposes on it major defense responsibilities. In order to put the Mississippi River System into perspective, let's look at some statistics. The U.S. port industry handles approximately 1.8 billion tons of commerce annually. The total tonnage of commerce moved on inland water- ways is approximately 600 million tons annually. The net inland traflBc on the main channels and all tributaries of the Mississippi, Illinois, Missouri, and Ohio Rivers is 300 million tons annually. Inland traflBc on the Gulf Intracoastal Wa- terway, which connects with the Mississippi River at New Orleans, annually ex- ceeds 100 million tons. The inland waterway system described above connects to an oceangoing trans- portation system 200 miles from the Gulf on the Mississippi River at Baton Rouge, Louisiana. Below Baton Rouge the river has natural depths exceeding 120 feet 1 "The Nicaragua Canal Story" by Mr. Haar on p. 479. (145) 146 and widths exceeding 2.000. In this stretch of the Mississippi River, we find the Port of Baton Rouge, fourth largest in the nation, and the Port of New Orleans, second largest in the nation. TraflBc in this oceangoing segment of the Mississippi River System is intense. In 1975, traflBc on the Mississippi River from Baton Rouge to but not including New Orleans totaled 201,600,768 tons and traffic on the Mississippi River from New Orleans to the mouth of passes (Gulf of Mexico) totaled 203,134,329 tons. Thus the total traffic on the oceangoing portion of the Mississippi River System in 1975 was 405 million tons, which is equivalent to two- thirds (%) of the total U.S. inland waterborne commerce. In 1975, the value of the trade on the lower Mississippi was $19 billion. In 1975. there were 13,366 oceangoing vessels and over 90,000 barges moving on waterways through the New Orleans Area. The total value of all foreign trade in the lower Mississippi is $19 billion (export and import). The major commodities are grain, petroleum and petroleum products, iron and steel, machinery and paper. The estimated $22 billion worth of agricultural commodities and products ex- ported during the fiscal year ending June 30, 1976. is a tribute to the energy, sales ability and traditional trading spirit of the American agricultural community. Exports provide markets for nearly 60 per cent of the U.S. annual wheat crop ; 55 per cent of the rice ; half of the soybeans ; more than one-third of the cotton and tobacco ; and one-fourth of the feed grains we produce. About one-fifth of 1975 farm cash receipts resulted from agricultural exports. Production from nearly one out of every three harvested acres is sold abroad. Because of balance of payment requirements, U.S. land devoted to export crops and livestock is increasing by millions of acres annually. The vast network of support and service companies and organizations that link American farms to consumers beyond our borders benefits from exports. Businesses that include agricultural machinery and chemicals manufacturers ; the packaging and container industries ; the transportation system : international banks ; forwarders ; brokers ; and the small army of marketers, promotion spe- cialists ; and commercial representatives who travel the world probing for new or expanding markets for American farm products, all benefit from exports. Every additional billion dollars realized from an export sale generates 50,000 additional jobs here at home.^ Movement of a substantial portion of the total annual agricultural exports to world markets occurs via ports on the Gulf of Mexico. It is strongly recommended that the Senate not ratify the new proposed Panama Canal treaty unless it is amended so that there will not be an adverse economic impact on American shipping and the American consumer. We strongly feel that our foreign trade and balance of payments cannot stand, without major adverse impacts to the national interest, the reported 30 per cent increase in tolls for tlie Panama Canal after ratification of the subject treaty. In event the Senate sees fit to ratify this treaty then we recommend that it does so with the stipulation that tolls will not be increased to pay the non-operations costs portion of the new increased annual payments to be made to the Government of the Republic of Panama. MiD-GuLF Seaports, Marine Terminal Conference, Xew Orleans, La., September 28, 1077. To : The President of the United States, The Members of the Congress, and the Secretary of Commerce. Mr. President. Congressmen and Madame Secretary : The members of the Mid- Gulf Seaports Marine Terminal Conference, whose facilities handle annually over 13.600 ocean-going vessels engaged in international trade and commerce most strongly urge and request that the Panama Canal Treaty not be ratified until and unless provisions are made to limit tolls and charges at the Panama Canal to that level needed to defray operating, maintenance and capital costs of said facility, and that the Maritime Trade and Commerce of tlie United ^^^^tes of America not be burdenecl with the costs of international diplomacy, expenses that are completely unrelated to the economic cost of providing cross-isthmus passage of vessels and cargoes. The costs of payments to the Government of the Republic of Panama, if met by increased Panama Canal tolls, may well result in decreased 1 Sonrcp : F'ood and Agricultural Export Dirpctory, USDA Forpijrn Agricultural Serv- ice. May 1976. 147 use with a resultant decrease in total canal revenues as well as burdening spe- cific American exports, especially grain and machinery moving to tlie Far Eastern, Asiatic and Pacific nations, to such an extent as to price them out of world com- petition thereby depriving our nation and its economy of tlie largest and best source of foreign exchange and income so vital to a favorable balance of pay- ments. Respectfully, Edward S. Reed, Chairman. Gulf Ports Association, Gulf port, Miss., September 2S, 1977. To : The President of the United States, the Members of the Congress. Mr. President and Congressmen : The Gulf Ports Association, an organization representing the public deepwater ports of the States of Alabama, Florida, Louisiana, Mississippi and Texas through whose facilities over one-half of all grain exi^orts from this United States move and through whose ports some 37.8% of all U.S. cargoes move in international trade and commerce, sincerely and vigorously urge that the Panama Canal Treaty not be ratified and become effec- tive unless and until realistic, effective and controllable safeguards are effected to assure fair, equitable and economically realistic canal tolls, rates directly re- lated to the operation and maintenance of the canal, and not including the cost of international diplomacy. To burden the cargos and vessels transversing the canal with the additional and very substantial non-operations costs of payments to the Government of the Republic of Panama can have an extremely adverse effect on not only the canal movements, but can well price certain U.S. exports which can not economically utilize other routings out of world commerce. The effect on all of the United States ports located on the Gulf of Mexico could be dramatically detrimental unless rates and tolls are maintained at a level com- mensurate with the costs of canal operation. Respectfully, Robert C. Engram, President. EXCERPTS FROM THE CONGRESSIONAL RECORD SENATE 1 Uyi fFrom the Congressional Record (Senate) Feb. 10, 1971] Convention With Nicaeagua Terminating the Bbyan-Chamorbo Treaty of 1914 Mr. Mansfield. Mr. President, I ask unanimous consent that the Chair lay before the Senate Executive L on the Executive Calendar, and that all the various parliamentary stages of the treaty up to and including the presentation of the resolution of ratification be considered as having occurred, and that the vote on Executive L occur beginning not later than 1 p.m. Wednesday, February 17. The Presiding Officer. Without objection it is so ordered. There being no objection, the Senate, as in Committee of the Whole, proceeded to consider Executive L. 91st Congress, second session, a convention with Nica- ragua terminating the Bryan-Chamorro Treaty of 1914, which was read the second time, as follows : Convention Between the Government of the United States of America and the Goveirnment of the Republic of Nicaragua The Government of the United States of America and the Government of Nicaragua, desirous of further strengthening the traditional bonds of friendship and cooperation long existing between their two countries, have reexamined the Convention respecting a Nicaragua canal route, signed at Washington on Au- gust 5, 1914, in the light of present circumstances and needs and have concluded that the interests of both nations will best be served by terminating the Conven- tion in all its provisions. To this end, the two Governments have agreed to the following articles : article I Upon the entry into force of the present Convention, the Convention between the United States of America and the Republic of Nicaragua respecting a Nica- raguan canal route, which was signed at Washington on August 5, 1914, shall terminate. article II As a consequence of the termination of the Washington Convention of August 5, 1914, all the rights and options that the 1914 Convention accorded to the Govern- ment of the United States of America shall cease to have effect as of the date this Convention enters into force. ARTICLE III The present Convention shall be ratified in accordance with the constitutional requirements of the contracting parties, and instruments of ratification shall be exchanged at the city of Managua as soon as possible. The present Convention shall enter into force on the day on which the instruments of ratification are exchanged. In witness whereof the respective pleni-potentiaries have signed the present convention. Done in duplicate, in the English and Spanish languages, both equally au- thentic at the city of Managua this fourteenth day of July, one thousand nine hundred and seventy. For the Government of the United States of America : Malcolm R. Barnebey, Charge d' Affaires a.i. of the TJnited States of America. For the Government of the Republica of Nicarauga : Lorenzo Guerrero, Minister of Foreign Affairs of Nicaragua. The Presiding Officer. If there be no objection. Executive L will be con- sidered as having passed through its various parliamentary stages up to and including the presentation of the resolution of ratification. (151) 99-592— 7S 11 152 The resolution of ratification of Executive L will not be read. The assistant legislative clerk read the resolutions of ratification of Executive Las follows : "Resolved (two-thirds of the Senators present concurring therein), That the Senate advise and consent to the ratification of the Convention signed at Managua on July 14, 1970. between the United States of America and the Republic of Nicaragua for the Termination of the Convention Respecting a Nicaraguan Canal Route Signed at Washington on August 5, 1914 (Ex. L. 91-2)." Mr. Mansfield. Mr. President, I ask unanimous consent to have printed in the Record excerpts from the report, Executive Report No. 92-2, explaining the purposes of the convention. There being no objection, the excerpts were ordered to be printed in the Record, as follows : PURPOSE The sole purpose of this very short, simple convention is to terminate the Bryan-Cliamorro Treaty of 1914 with Nicaragua and all of the rights and options accorded thereunder to the United States. BACKGROUND The Bryan-Chamorro Treaty was signed in 1914 and became effective in 1916. In return for a payment of ij^3 million (the expenditure of which had to be ap- proved by the American Secretary of State), Nicaragua gave the United States the exclusive rights in perpetuity for construction of an interoceanic canal through Nicaragua. The United States also got a 99-year lease on the Corn Islands off the Caribbean coast of Nicaragua and the right, also for 99 years, to establish a naval base on the Gulf of Fonseca on Nicaragua's Pacific coast. In each case, the lease and the base rights were subject to renewal, at the option of the United States, for an additional 99 years. In each case, also it was expressly provided that the Corn Islands and the naval base would be "subject exclusively to the laws and sovereign authority of the United States." The United States has never exercised any of the rights it acquired under the treaty and has no intention of doing so. I'articularly in recent years, the existence of the treaty has become increasingly unpopular in Nicaragua and an unnecessary irritant in U.S. -Nicaraguan rela- tions. As a .consequence, in March, 1970, the two Governments exchanged diplo- matic notes agreeing to enter into negotiations on the future of the treaty, and in July of that year the jjending convention was signed terminating the treaty. COMMITTEE ACTION AND RECOMMENDATION President Nixon transmitted the convention to the Senate with a request for advice and consent to ratification on September 23, 1970. The Foreign Relations Committee held a hearing on the convention February 8, 1971, at which time a statement was received from Mr. Robert A. Hurwitch, Deputy Assistant Secre- tary of State for Inter-American Affairs. A copy of this statement is included as an appendix to this report. The committee considered the matter further in executive session February 9^ and without objection ordered the convention favorably reported to the Senate. The convention will not result in any costs to the United States. The 1914 treaty has long since outlived its usefulness, if it ever had any. The 1970 report of the Atlantic-Pacific Inter-Oceanic Canal Study Commission em- phatically rejected a possible canal route through Nicaragua. There is nothing- to be gained by continuing the old treaty in force and a good deal to be lost in terms of our political relations with Nicaragua. The committee therefore recom- mends that the Senate advise and consent to ratification of the convention termi- nating the 1914 treaty. 153 APPENDIX Statetticnt h9j Mr. Rohert A. Hnricitch, Depniy Assistant Secretary for Inter- Anieriean Affairs, before the Senate Foreign Relations Committee, Fehruary S, mi :S[i\ Chairman, members of the committee: I am pleased to have this oppor- tuuity to apiiear before you today to discuss the convention which the United States and Nicaragua have signed which would abrogate the 1914 convention respecting a Xicaraguan Canal Route ; ix)pularly known as the Bryan-Chamorro Treaty of 1914. With your permisi>ion, Mr. Chairman, I would like to explain briefly some aspects of background to the original Bryan-Chamorro Treaty, and then discuss why the administration concluded that it was in the United States national interest at this linie to terminate it. The original treaty was signed in Washington, D.C. in 1914 by U.S. Secretary of State William Jennings Bryan and Nicaraguan President General Emiliano Chamorro. As the members of the committee are aware, the treaty granted to the United States, in ijcrpetuity, Ihe exclusive right to construct, operate, and maintain an interoceanic canal across Nicaragua ; a 99-year lease to the Corn Islands olf Nicaragua's Caribbean coast; and the option for a similar period to establish a naval base on the Pacific coast of Nicaragua at the Gulf of Fonesca. In consideration for these rights, the United States paid the Govern- ment of Nicaragua three million dollars. During the intervening 5(> years, the U.S. Government has never exercised any of the rights and options granted by the Bryan-Chamorro Treaty. Over the years the provisions of the Bryan-Chamorro Treaty have become a source of friction in our relations with Nicaragua. Our exclusive and perpetual right to build an interoceanic canal anywhere in Nicaragua came to be con- sidered, with mounting resentment among the Nicaraguan people, as an infringe- ment upon their sovereignty. Successive governments of Nicaragua came to believe that plans for developing their country, particularly the ►San Juan liiver basin which was the most feasible site for a canal, were thwarted i)y the un- certainty as to whether the United States would ever exercise its rights to con- struct a canal. Nicaraguan frustration was clearly manifested when, upon the appointment in 1965 of the Atlantic-Pacific Interoceanic Canal Study Commission, President Schick of Nicaragua declared publicly that his Government would seek the termination of the treaty in the event that the U.S. Government were to se- lect a country other than Nicaragua as the site of the new canal. In August 1969, the annual report of the Atlantic-Pacific Interoceanic Canal Study Commission made clear that the Nicaraguan route would be ruled out as a site for any new sea-level canal. This conclusion is expressed in the following words which I quote from the Commission's final report of December 1, 1970 : "The Nicaragua-Costa Rica Route was discarded from further consideration by the Atlantic-Pacific Interoceanic Canal Study Commission because of its ex- pense in comparison with other canal routes. Both nuclear and conventional construction teclmiques were examined on a route lying just south of Lake Nicaragua. It was estimated that a conventionally constructed sea-level canal would require a prohibitively high cost ($11 billion). On the other hand, while actual construction cost of a nuclear canal would be much lower ($5 billion), the necessary relocation of 675,000 inhabitants would involve unacceptable social and economic costs. "The Study Group did not find any significant foreign policy advantages that would counterbalance these technical disadvantages."' The publication of the 1969 interim report once again aroused Nicaraguan public opinion over the position in which the Bryan-Chamorro Treaty placed their country. Responsive to his people's dissatisfaction, the President of Nicaragua announced that his government would begin to study infrastructure projects on the San Juan River, "with or without a canal treaty." The possibility of a thoroughly unnecessary dispute between our two countries was rising. 154 As the committee will recall, it was at about this time — October 1969 — that I President Nixon made a major statement on U.S. policy toward Latin America, , calling for the establishment of a "more mature partnership" and a more "bal- anced relationship" based on respect for national identity and national dignity. As a result we reviewed our relations with other nations of the hemisphere to i identify anachronistic arrangements and procedures which, like barnacles, im- peded progress toward such a partnership. Consultation with the appropriate agencies within the Executive Branch and with the Chairman of the Atlantic and Pacific Interoceanic Canal Study Commission led the administration to con- clude that no essential interests of the United States were served by the con- tinuance in force of the Bryan-Chamorro Treaty. Subsequently, the U.S. Government and the Government of Nicaragua entered I discussions which resulted in the conclusion that the national interests of both i countries would best be served by a complete, simple termination of all the continuing provisions of the original treaty. A new convention to that effect was signed in Managua on July 14 last year. The convention which is before you contains a preamble and three articles. The preamble points out that the two Governments, desirous of further strength- ening the traditional bonds of friendship and cooperation between the two countries, have reexamined tiie 1914 convention "in the light of present circum- stances and needs and have concluded that the interests of both nations will best be served by terminating the convention in all its provisions." Article I provides that, upon entry into force of the convention, the 1914 con- vention shall terminate. Article II provides that, as a consequence of such termination, all the rights and options accorded by the 1914 convention to the United States Government "shall cease to have effect as of the date this convention enters into force." Article III provides for ratification and for entry into force of the convention on the date of the exchange of instruments of ratification. Upon entry into force of the convention, the rights of the U.S. Government ; under the Bryan-Chamorro Treaty in regard to the construction, operation and maintenance of a canal across Nicaraguan territory would cease, the leases to i Great Corn Island and Little Corn Island would be cancelled, and the U.S. option to establish and maintain a naval base on Nicaraguan territory on the shores of the Gulf of Fonseca would likewise be cancelled. The signing of this new convention last July was met with overwhelming approval in Nicaragua. The abrogation of the Bryan-Chamorro Treaty was hailed as a new step in the history of the country, a victory for the whole Nicaraguan people without regard to political afl31iation. The goodwill of the United States in abrogating the Treaty was publicly acclaimed by all sectors of Nicaraguan public opinion, and the Congress of Nicaragua moved promptly to ratify tlie new convention on July 29, 1970 — 15 days after it was signed by the executive branches of both Governments. Mr. Chairman ; In signing this convention President Nixon and this adminis- tration seeks to sweep away an obsolete arrangement which gave the United States rights and options in the territory of a foreign country which the United i. States can no longer foreseeably wish to exercise. i I would urge that this committee recommend to the Senate that it give its prompt advice and consent to the ratification of this convention, as a positive, ; effective, and essential step in continuing the excellent relations that have existed between the United States and the Republic of Nicaragua. [From the Congressional Record (Senate) Feb. 17, 1971] Convention With Nicaragua Mr. Mansfield. Mr. President, because of an unusual circumstance which ' has developed, I ask unanimous consent that the distinguished Senator from South Carolina may be allow^ed the time remaining between now and 3 p.m. as in • executive session, to discuss the matter on which we will vote at 3 p.m. The Presiding Officer. Is there objection? The Chair hears none, and it is so ordered. Mr. Mansfield. This would not interfere with the Pastore rule of germane- I ness as it is ordinarily applied. i Mr. Thurmond. Mr. President, I thank the distinguished majority leader for his courtesy. Mr. Mansfield. It is a pleasure. Mr. Thurmond. Mr. President, we have before us today the ratification of the convention between the United States and Nicaragua for the termination of the 1914 Bryan-Chamorro Treaty. I intend to vote against ratification — that is to say, against the termination of the 1914 treaty. Before I set forth my reasons, however, I would like to state for the record my protest at the unseemly haste with which this matter was taken up. Hear- ings were held before the Senate Foreign Relations Committee last Monday, the committee voted to report it on Tuesday, and on Wednesday unanimous con- sent was obtained to proceed immediately to a vote at the first possible oppor- tunity under the rules, namely, the first afternoon following the Lincoln-Wash- ington Day recess. The Senate had little or no opportunity to study this matter before unanimous consent was obtained. It is apparently being treated as a noncontroversial matter ; in my judgment, it is a matter of grave importance. Mr. President, I first addressed this body on the proposed abrogation of the Bryan-Chamorro Treaty on March 24, 1970, when news of the negotiations first leaked out. I still do not believe that a sound argument has been put forward for the termination of this treaty. If the treaty was important in 1914, it is doubly important today. The treaty was negotiated by William Jennings Bryan on behalf of President Wilson because of the danger of European intervention incident to the opening of World War I. The intention was to provide an alternative to the Panama Canal, if need be, and to defend the Panama Canal. Under the 1914 treaty, the United States received "the exclusive proprietary rights necessary and convenient for the construction, operation, and maintenance of an interoceanic canal." In addition, we received 99 year leases on Great Corn and Little Corn Islands in the Caribbean, and an option to establish a naval base on the Pacific side at the Gulf of Fonseca. It is also significant that the territory on the naval base and on the two islands "shall be subject exclusively to the laws and sovereign authority of the United States." For these proprietary rights and leases, we paid $3 million in gold. Although those who attempt to deprecate U.S. attitudes in that period refer to this treaty in terms of "dollar diplomacy" and the "big stick," the fact remains that the treaty provided that the money would go only to defray Nicaragua's public debt "or other public purposes for the advancement of the welfare of Nicaragua." The arguments raised against the treaty are that the conditions of 1914 are no longer relevant, and that the United States does not intend to build a canal in Nicaragua, thus making the treaty an "irritant" in Nicaragua-United States relations. The truth is that the danger of European intervention is even greater today than it was in 1914. The Soviet navy is constantly in the Caribbean. Soviet sub- marines are being tended off and on at Cuba, and, according to articles which appeared in the Washington Post this week, are very difficult to detect under- water in that area. The Panama Canal, and all the strategic narrow waterdays of the world, are objects of Soviet pressures and subversion. Furthermore, it now appears that the Soviets are negotiating for a naval base in Chile on the Pacific side. It is therefore strategically unsound to surrender our options in the area when there is no compulsion to do so. The second argument that is raised is that we do not intend to build a canal in Nicaragua. The answer is that we never had firm intentions to build a canal in Nicaragua. The treaty was negotiated after the Panama Canal was in opera- tion. It merely provided us with an option if something went wrong in Panama. Today, more than ever we need this option. The ill-considered drive to build a sea-level canal in Panama has foundered on the tides of Panamanian politics. We are supposedly still open to negotiations with Panama — unnecessarily so, in my judgment — but how can we even consider negotiating with Panama when we are giving up the Nicaraguan alternative? Our options in Nicaragua is an important bargaining tool, and we are throwing it away. The advocates of abrogation further say that the report of the Atlantic-Pacific Interoceanic Canal Study Commission ruled out all possibility of a canal in Nicara- gua. This is not true. What the Commission ruled out was the possibility of a sea- level canal. The Commission, with its bias toward sea-level plans, never even 156 considered the practical alternative to a sea-level canal : namely, a lock canal that would raise vessels to the surface of Lake Nicaragua, utiiizing the lake, instead of digging a canal 140 miles long. The lock canal plan was thoroughly studied and recommended in 1929-31, in an investigation conducted under the able direction of Lt. Col. Dan J. Sultan. This report is available to the Congress in the U.S. Army Interoceanic Canal Board Report, 1932— House Document No. 139. 72d Congress. This leaves us, then, with the argument that the treaty is an '"irritant" in United States-Xicaraguan relations. Mr. President. I submit that any time one -nation undertakes an obligation to another, that obligation can be trumpeted up and described as an "irritant." The United States has fulfilled all of its obliga- tions under the treaty and continues to fulfill them. Nicaragua has enjoyed the friendship and protection of the United States, as well as the gold dollars which have been used for the welfare of her people. She has not been called upon to perform any of the obligations which she undertook. How can the treaty be considered fairly as an irritant? If treaties and agree- ments, freely entered into, are not considered binding, to be thrown off at the first sign of "irritation," what value do they have? They become nothing but a scrap of paper. Finally, Mr. President, it will not go unnoticed in the world that an important precedent has l)eeu set here. The treaties give the United States the right to exercise her sovereignty and laws on the Corn Islands and on the naval base. We liave similar rights in the U.S. Canal Zone in the Isthmus of Panama. When the Panamanians see that we have given up such rights in Nicaragua without a whimper, they will l)e ever so much more adamant tliat we must give up our rights in the U.S. Canal Zone. Little notice has been given to this treaty today in the United States, but I submit that it will be big news in Panama. To sum up then, this treaty of abrogation is just another building block in the edifice designed by the State Department's architects of retreat and surrender. The main object of these policymakers appears to be to rationalize defeat and to invent tedious excuses for not exercising our just rights and powers. The rati- fication of this treaty today will contribute to the undermining of our authority and leadership, and I shall cast my vote nay. Mr. Mansfield. Mr. President, I ask unanimous consent, notwithstanding the agreement entered into, that I may be allowed to proceed for not to exceed 3 minutes. I . feel that the remarks of the distinguished Senator from South Carolina should not be allowed to rest on the basis of their being delivered just before the vote. The PiiEsiDiiVG Officer. Is there objection? The Chair hears none, and it is so ordered. Mr. :Mansfield. :\Ir. President, the Atlantic-Pacific Interoceanic Canal Study Commission which looked into this matter issued the following finding in its final report of December 1, 1970 : "The Nicaragua-Costa Kica Route was discarded from further consideration by the Atlantic-Pacific Interoceanic Canal Study Commission because of its expense in comjiarison with other canal routes. Both nuclear and conventional construc- tion techniques were examined on a route lying just south of Lake Nicaragua. It was estimated that a conventionally constructed sea-level canal would require a prohibitively high cost ($11 billion). On the other hand, while actual construc- tion cost of a nuclear canal would be much lower $(5 billion), the necessary relocation of 675,000 inhabitants would involve unacceptable social and economic costs. "The Study Group did not find any significant foreign policy advantages that would counterbalance these technical disadvantages." Mr. President, in the unanimous recommendation of the Committee on Foreign Relations favoring ratification, I quote from the Committee report under the heading, "Committee Action and Recommendation" : President Nixon transmitted the convention to the Senate with a request for advice and consent to ratification on September 23, 1970. The Foreign Relations Committee held a hearing on the convention February 8, 1971, at which time a statement was received from Mr. Robert A. Hurwitch, Deputy Assistant Secre- tary of State for Inter-American Affairs. A copy of this statement is included as an appendix to this report. 157 "The coiiiniittee considered the matter further in executive session February 9 and without objoctiou ordered tlie convention favorably reported to tlie Senate. "The convention will not result in any costs to the United States. "The 1914 treaty has long since outlived its usefulness, if it ever had any. The 1970 report of the Atlantic-Pacific Inter-Oceanic Canal Study Commission [to which I have just referred] emphatically rejected a possible canal route through Nicaragua. There is nothing to be gained by continuing the old treaty in force and a good deal to be lost in terms of our political relations with Nicaragua. The committee therefore recommends that the Senate advise and consent to ratifica- tion of the convention terminating the 1914 treaty." Mr. President on pages 2484-2485 of the Congressional Record for February 10, 1971, there is a further explanation of the matter which will be voted upon shortly and the reasons why the Committee on Foreign Relations unanimously recommended ratification to the Senate. Mr. Cook. Mr. President, will the Senator from Montana yield for a question? Mr. Mansfield. I yield. Mr. Cook. Is it not true that the United States has never exercised any rights or options granted by the 1914 convention, including any use of the Corn Islands? Mr. Mansfield. None whatsoever. Mr. Cook. I thank the Senator from Montana. (The following remarks by Senators Tower and Cotton, made later in the day, are printed at this point in the Record by unanimous consent. ) Mr. Tower. ]Mr. President, it is no secret that troubles in the Caribbean are increasing and that the strategic importance of base rights in that area is greater now than at any time since the end of World War II. Our current rights in Nicaragua, which date from the Bryan-Chamorro Treaty of 1914, could be exer- cised should an emergency situation arise in that area, or should the balance of power be adversely affected on our southern approaches. Our naval base at Guantanamo Bay in Cuba is currently one of our main bastions of defense in the Caribbean : however, it must be recognized that this is a sensitive area and events could hinder normal operations out of that base. Our current rights in Nicaragua would become very important should such events befall us in Cuba. The strategic considerations, Mr. President, are very important in deciding what we should do with regard to the proposed abrogation of the Bryan- Chamorro Treaty : however, there are other matters which must also be con- sidered. We are currently considering what should be done in regard to the Panama Canal. There are some proposals to build a canal through Colombia ; others advocate modernization of the present canal. My own thought is that for the present we should complete and modernize the existing Isthmian Canal, which can be done at a fairly moderate cost. Nevertheless, by approving the Convention before us today, we are precluding options which are currently open to us. At the present, the only alternate site to Panama to which we have rights is Nicaragua. There has been considerable talk about acquiring rights of Colombia for build- ing a canal ; however, we do not now have these rights and with no other options open to us, it could be difficult to acquire them. In addition, when the Panama- nians know that we have no real alternative to the Panamanian site in deciding where to buiid a possible new canal, their bargaining position will undoubtedly harden. Mr. President, I am as desirous as anyone of good relations with our neighbors to the south. Indeed. I am proud of the fine relationship that we have developed and improved over the years with ^Mexico, a nation with which my State of Texas shares much common heritage. For many years, we have had a fine relationship with Nicaragua and for most of that time the Bryan-Chamorro Treaty has been in effect. I cannot see why the continuation of this treaty, at least until we have decided w^hat we are going to do in the Isthmian Canal situation, will prevent the United States and Nicaragua from continuing this most desired cordial re- lationship. Therefore, I feel that I must vote against this abrogation of the rights of the United States at this unsettled time: I believe that this Convention could better be considered when the situation in the Caribbean is more stable and our direction is regarded to the Isthmian situation is more clear. Mr. Cotton. ^Sfr. President, the only reason I wish to make a brief statement concerning my position and my vote on this treaty is thnt 2 years ago, represent- ing the Committee on Commerce; and in company with representatives of the 158 House of Representatives, I made a trip to Panama and, under the ^lidance of Canal Zone officials and those military officials who had been working with the Commission studying possible canal routes, spent several days, during which time we started over a proposed alternate route for a sea level canal in Pan- ama, parallel to the present canal, and also over a proposed route just over the line in Colombia for a sea level canal. During that time, as we were briefed on the problem, it was the position of those who had studied it — a position entirely consistent with the report of the Committee on Foreign Relations — that the proposed Xicaraguan route, for which we have treaty privileges, was more expensive, less practical, and the most un- likely to be resorted to of any of the proposed routes, and that construction of such a sea-level canal would necessitate the removal of a considerable number of the inhabitants. It was also emphasized that while the most favorable route would probably be through Colombia, with the situation that confronted us and the attitude of Panama as well as the attitude, to a lesser extent, of Colombia and other nations in that region, we might find it extremely difficult to acquire rights in case something happened regarding the present canal ; that to acquire rights to a parallel canal in Panama, considering our relations there now, would be extremely difficult and it might be difficult to acquire the most favorable one also, which would be in Colombia. It was their attitude that it would be unfortunate if we surrendered the rights we have in Nicaragua, unless or until we were able to obtain some assurances of obtaining rights to build a canal either in Panama or in Colombia, should it become necessary or desirable. So, while the unanimous report of the Committee on Foreign Relations is com- pletely true in its statement regarding the remote possibility of our ever exercis- ing our rights in Nicaragua, the fact is that I was thoroughly indoctrinated and convinced during the time we were down there and on the scene, and consequently I felt it necessary to vote against the treaty at this time because I had a feel- ing it was not timely to do so now, and that some eft'ort should have been made at least to look toward securing some alternative rights, probably in the most favorable route, in Colombia ; hence, I was compelled to vote against this treaty. Convention With Nicaragua Terminating the Bryan-Chamorro Treaty OF 1914 The Presiding Officer (Mr. Weicker). The hour of 3 o'clock having arrived, the Senate will now proceed to vote on the resolution of ratification of the Con- vention with Nicaragua terminating the Bryan-Chamorro Treaty of 1974, Execu- tive L — 91st Congress, second session, to be immediately followed by a vote on the Extradition Treaty with Spain, Executive N — 91st Congress, second session. The yeas and nays having been ordered the clerk will call the roll on the first treaty. The assistant legislative clerk called the roll. Mr. Bykd of West Virginia. I announce that the Senator from Indiana (Mr. Bayh), the Senator from California (Mr. Cranston), the Senator from Mis- sissippi (Mr. Eastland) the Senator from South Carolina (Mr. Rollings), the Senator from Iowa (Mr. Hughes), the Senator from Minnesota (Mr. Humphrey), the Senator from Hawaii (Mr. Inouye), the Senator from Louisiana (Mr. Long), the Senator from Washington (Mr. Magnuson), the Senator from Montana (Mr. Metcalf), the Senator from New Mexico (Mr. Montoya), the Senator from Maine (Mr. Muskie), the Senator from Rhode Island (Mr. Pell), and the Senator from California (Mr. Tunney) are necessarily absent. I further announce that the Senator from Wyoming (Mr. McGee), the Sena- tor from Utah (Mr. Moss) and the Senator from New Hampshire (Mr. Mcln- tyre) are absent on official business. I also announce that the Senator from North Carolina (Mr. Jordan), is absent because of illness. I further announce that, if present and voting, the Senator from Iowa (Mr. Hughes), the Senator from Minnesota (Mr. Humphrey), the Senator from Wash- ington (Mr. Magnuson), the Senator from Wyoming (Mr. McGee), the Senator from Maine (Mr. Muskie), and the Senator from California (Mr. Tunney), would each vote "yea." 159 Mr. Scott. I announce that the Senator from Colorado (Mr. AUott), the Sen- ators from Arizona (Mr. Fannin and Mr. Goldwater), the Senator from Wyo- ming (Mr. Hansen), the Senator from Michigan (Mr. GrifBn), the Senators from Oregon (Mr. Hatfield and Mr. Pacl^wood), the Senator from Illinois (Mr. Percy), and the Senator from North Dakota (Mr. Young), are necessarily absent. The Senator from Hawaii (Mr. Fong) is absent on official business. The Senator from South Dakota (Mr. Mundt) is absent because of illness. If present and voting, the Senator from Colorado (Mr. Allott), the Senator from Oregon (Mr. Hatfield), the Senator from Wyoming (Mr. Hansen), and the Senator from South Dakota (Mr. Mundt) would each vote "yea." The yeas and nays resulted — yeas 66, nays 5, as follows : [No. 3 ex.] Aiken Allen Anderson Baker Beall Bellmon Bennett Bentsen Bible Boggs Brock Brooke Buckley Burdick Byrd. W. Va. Cannon Case Chiles Church Cook Cooper Curtis YEAS- Dole Dominick Eagleton Ellender Ervin Fulb right Gambrell Gravel Harris Hart Hartke Hruska Jackson Javits Jordan, Idaho Kennedy Mansfield Mathias McClellan McGovern Miller Mondale Nelson Pastore Pearson Prouty Proxmire Randolph RibicofC Roth Saxbe Schweiker Scott Smith Sparkman Spong Stennis Stevens Stevenson Symington Taft Talmadge Weicker Williams NAYS— 5 Byrd. Va. Gurney Tower Cotton Thurmond NOT VOTING— 29 Allott Bayh Cranston Eastland Fannin Fong Goldwater Griffin Hansen Hatfield Hollings Hughes Humphrey Inouye Jordan, N.C. Long Magnuson McGee Mclntyre Metcalf Montoya Moss Mundt Muskie Packwood Pell Percy Tunney Young The Presiding Officeb. On this vote, there are 66 yeas and 5 nays. Two-thirds of the Senators present and voting having voted in the affirmative, the resolution of ratification is agreed to. TWENTY-FOUR SPEECHES BY SENATOR JAMES B. ALLEN (ALABAMA) XO RIGHT TO INTERVENE TO DEFEND CANAL [From the Congressional Record, Sept. 12, 1977 — S14653] The Panama Canal Treaties — No. 1 Mr. Allen. Mr. President, in the September 11 issue of the New York Times appeared a most interesting and informative article by Capt. Paul B. Ryan, USN retired, a research associate at the Hoover Institute, Stanford University. From this article it can be seen that there are two areas, at least, in the Panama Canal Treaty on which the American negotiators placed one construction and the Panamanians placed another construction. Both of these provisions or the construction of both of these provisions is most important to the rights the United States would have in the event this treaty is approved by the Senate. The first has to do with the right of the United States to defend the canal. The article points out : "But does this ostensibly forthright interpretation of treaty terms — " That is, the United States would have the right to defend the canal — "which presumably protect vital United States strategic interests, coincide with that held by Panama? The answer is no, if you listen to its chief treaty negotiator, Dr. Romulo Escobar Bethancourt, who analyzed the treaty's provisions at a news conference in Panama City on Aug. 24. "Dr. Escobar's comments were broadcast by radio and subsequently published in the Daily Report of our Government's Foreign Broadcast Information Service. Surprisingly, Dr. Escobar's astonishing views, which directly contradict the White House's, appear to have been given very little publicity or entirely over- looked by the United States news media. "Dr. Escobar roundly rejects the Carter Administration's claim that the United States may send in troops." Mind you, this was the chief negotiator on the part of the Panamanians. Quoting from his interview : "The treaty does not establish that the United States has the right to intervene [that is, send in troops] in Panama," he said. He denied that the treaty gives the United States the right to decide when neutrality is violated or not. Neither, in his view, do United States warships have the right to expeditious transit without conditions. "As Dr. Escobar inelegantly put it : 'If the gringos — " Referring to the people of the United States — "with their warships say, *I want to go through first,' then that is their problem with the other ships there. Presumably, Panamanian officials would look idly on while United States Navy captains, during an international crisis — " And that is a word for war or close proximity — "haggled with merchant skippers for a place at the head of the waiting line of ships. So much for the United States right to unimpeded transit and the defense of the waterway !" "Faced with Panama's refusal to allow 'privileged passage.' the Americans finally accepted the term 'expeditious transit.' in order, said Dr. Escobar, to 'sell' the treaty to the Pentagon. 'Now they [the United States diplomats] could explain that this means privileged passage. * * * Do not believe that we mean that," he emphasized. So you have two different constructions placed on two different sections of the treaty : one, the right of the United States to defend the canal, and Dr. Escobar says the United States will not have the right to say when the neutrality is being violated nor. he says, does she have the right to send in troops. How are we going to defend the canal if we do not have the right to say when neutrality is in danger or if we do not have the right to send in troops? So if they do not have a meeting of the minds, Mr. President, if the Panamanians and (160)' 161 the United States negotiators differ on these two most important points, how is it we can say this treaty is in the best interests of the people of the United States? So I am hopeful, of course, w^hen this matter does come up — and I see the dis- tinguished majority leader here on the floor — I am hopeful, even though the distinguished majority leader says he wants to carry this matter over until next year, it will be brought up this year, and that the Senate will I)e allowed to express its will, that is, decide to give or not to give its advice and consent to the treaty. So I am hopeful we can have action on this treaty this year. But if we do not have a meeting of the minds between Panama and the United States as to what these important provisions mean-^these are just two of them, T do not know how many other instances there are— but this is Dr. Escobar himself saying he has a difference of opinion with the U.S. negotiators, so if we do not know what the treaty means, if tliere is a sharp difference of opinion about what it means, how can the Senate be called upon to give its advice and consent to the approval of this treaty? Mr. President, I ask unanimous consent that this article be placed in the Record, and also an article this morning in the Washington Post by Congressman Philip Crane : "Our Standing in the World Would Diminish" ; and an article by our distinguished colleague, Mr. Helms, in the Washington Post of this morning, "1'his Alternative to the Carter Proposals." There being no objection, the articles were ordered to be printed in the Record, as follows : [From the New York Times, Sept. 11, 1977] The Canal Terms, Argued From Different Premises (By Paul B. Ryan) Stanford, Calif. — In his frenetic blitz to gain public approval of the tw^o Pana- ma Canal treaties, President Carter has stressed that he wishes to dispel misinfor- mation by laying out the facts. Thus, he and his chief negotiators, Ellsworth Bunker and Sol M. Linowitz, repeatedly have assured the public that the United States would have the permanent right to defend the canal by sending troops into Panama in time of crisis. Additionally, the White House says that United States warships would have "the permanent right to transit the canal expediti- ously and without conditions, for an indefinite period." But does this ostensibly forthright interpretation of treaty terms, which pre- sumably protect vital United States strategic interests, coincide with that held by Panama? The answer is no, if you listen to its chief treaty negotiator. Dr. Romulo Escobar Bethancourt, who analyzed the treaty's provisions at a news conference in Panama City on Aug. 24. Dr. Escobar's comments were broadcast by radio and subsequently published in the Daily Report of our Government's Foreign Broadcast Information Service. Surprisingly, Dr. Escobar's astonishing views, which directly contradict the White House, appear to have been given very little publicity or entirely overlooked by the United States news media. Dr. Escobar roundly rejects the Carter Administration's claim that the United States may send in troops. "The treaty does not establish that the United States has the right to intervene [that is, send in troops] in Panama," he said. He denied that the treaty gives the United States the right to decide when neutrality is violated or not. Neither, in his view, do United States warships have the right to expeditious transit without conditions. As Dr. Escobar inelegantly put it : "If * * * the gringos with their w^arships say, 'I want to go through first,' then that is their problem with the other ships there." Presumably, Panamanian officials would look idly on while United States Navy captains, during an international crisis, haggled with merchant shippers for a place at the head of the waiting line of ships. So much for the United States right to unimpeded transit and the defense of the waterway ! Were these wildly different interpretations known to the United States nego- tiators during the talks? As Dr. Escobar told the newsmen, these points had been thrashed out wath the Americans but Panama had stood firm against their demands. 162 Faced with Panama's refusal to allow "privileged passage," the Americans finally accepted the term "expeditious transit," in order, said Dr. Escobar, to "sell" the treaty to the Pentagon. "Now they [the United States diplomats] could explain that this means privileged passage. * * * Do not believe that we mean that," he emphasized. Placed side-by-side Mr. Carter's reassuring assessment and Dr. Escobar's belligerent and cynical evaluation present the apparent paradox of two Govern- ments outwardly reaching an agreement but secretly retaining entirely different perceptions of its provisions. Or is it a case where both negotiating teams assumed that the "real" meaning of the terms could be safely debated after both nations had won ratification from their respective Governments? Plainly, such a treaty is fraught with peril for future United States operations involving canal transits. The danger of jeopardizing the Navy's use of the water- way was apparent to Presidential candidate Carter and he implied as much during his televised debate on Oct. 6, 1976, with Gerald R. Ford. Mr. Carter said, "'I would not relinquish practical control of the Panama Canal Zone at any time in the foreseeable future." As a former naval oflBcer, Mr. Carter understands, probably better than most people, the need for the United States to retain such "practical control" to permit its Navy to carry out missions worldwide in support of United States diplomatic policies and strategic objectives. This is particularly true in an era when international tension, as well as mini- wars of the Angola type, are much more likely to occur than an allout war. In the light of Dr. Escobar's dismissal of United States treaty rights, can President Carter really mean what he says ? A poor treaty is worse than no treaty at all. United States diplomacy must serve the national interest, as we have recently been reminded. The Carter Administration should clear up these glaring ambiguities at once. As matters now stand, the American people have no guarantee from Panama for the pro- tection of United States defense and security interests in the Canal Zone. [From the Washington Post, Sept. 12, 1977] The Case Against the Canal Treaties our standing in the world would diminish (By Philip Crane) I do agree with my colleague Paul Simon [op-ed, Aug. 30] on one point : The American people would be violently opposed to "giving away" the Panama Canal. But their opposition to what the treaties actually propose will be even greater. We are, in fact, paying the Panamanian government to take away our multi- billion-dollar interest in Panama — to the tune of about $50 million per year plus approximately $350 million in economic and military aid ! One supporter of the treaties not mentioned by Simon is the U.S. banking community. Since they have huge sums of money in loans obligated to Panama, they cannot afford to oppose the treaties. Under Gen. Omar Torrijos, Panama's national debt has grown from $167 million to $1.5 billion. The debt service alone will consume 39 per cent of that country's budget this year. Panama's Depart- ment of Planning indicates that to refinance loans coming due, together with the $139 million deficit, a total of $323.6 million will be required. Obviously, Panama cannot afford to have the treaties rejected either. In fact, Torrijos' initial request was for a payment of $5 billion plus a $300-million annuity — but he will have to settle for the smaller package now under discussion. If, as Simon states, our primary interest is keeping the canal open, then he had better study the definition of "open" as understood by Panama. According to Dr. Romulo Bethancourt, head of the Panamanian negotiating team, in a report to the Panamanian National Assembly on Aug. 19, when the U.S. proposed that Panama be obliged to keep the canal permanently open and neutral, Panama cited these grounds for not keeping it open : because of an earthquake, because of a landslide or because the canal was not making money. I question why we shouldn't be proud of the current treaty, approved by the U.S. Senate in 1904. It granted the U.S. "all rights, power, authority in the Zone . . . which the U.S. would possess and exercise if it were the sovereign" for an initial payment of $10 jnillion plus an annuity of $250,000 — an annuity 163 that has now been increased to $2.3 million. The Provisional Government of Panama ratified the treaty, as did the Constitutional Government of Panama when it took oflice in 1904 and reaffirmed all acts of the previous regime. The Supreme Court decision in 1907 on Wilson v. Shaiv held that the United States does maintain legal sovereignty and ownership under the 1903 treaty, a ruling upheld in 1972. Obviously, national pride — for both Panamanians and Americans — is still an issue. But if we base our return of the canal on the fact that the Panamanians "don't like" our having acquired the property, then we had better consider giving Louisiana back to France and Alaska back to the U.S.S.R. I would like to try to believe that we know the position of the U.S. military brass on the treaty question. But the Singlaub affair has convinced military per- sonnel that they jeopardize their military standing and job security by ijublicly opposing any administration policies. If military officials in a spot to accurately analyze the risk involved in ratifying a treaty with Panama were free to speak their minds, we could fully assess the validity of apparent U.S. military support for the treaties. Torrijos' regime — created by a coup in 1968 — is known for its friendliness with Castro and pro-Communist tendencies. In fact, the Soviets, who do not even have diplomatic relations with Panama, have recently concluded tentative eco- nomic and commercial agreements with the country — a foot in the door, as it were. Of course. Panamanian Communists oppose the treaties : They want con- trol of the canal right now. Moreover, Torrijos as director has been a consistent violator of human rights in Panama. In light of President Carter's strident — and laudable — campaign for human rights, isn't signing the treaties a blatant act of hypocrisy ? The canal will be in much graver danger if a treaty is agreed to. First, sabotage is a remote possibility because of the economic importance of the canal to Pan- ama. If we surrender the Zone, the entire Isthmus becomes the focus of inter- national envy and, possibly, combat. Betancourt stated outright in his assembly address that "we are not giving the U.S. the right of intervention." Moreover, the neutrality agreed to is not one "so only the U.S. ships travel through peace- fully" but it is one "so that all ships of all flags in the world travel through peacefully * * * communist * * * fascist * * * monarchy." Under these terms, Panama is simply inviting the wolf to dine at his own table. Simon is absolutely correct : The United States is a leader in the Free World. But, if we relinquish the canal our power and standing in Latin America and throughout the world would diminish. This is particularly true in light of recent retreats from other spots on the globe. How can it be termed "moral" to pull the rug out from under the Panamanian economy at a particularly feeble moment in its history? During 1976 the United States infused over $29 million into Panama by direct purchases from U.S. government agencies ; over $108 million in wages to non-U.S. citizens employed in the Zone ; over $39 million in personal expendi- tures by U.S. employees — not to mention major construction, obliteration of yellow fever, and countless apprentice and job-training programs. In fact, per capita income in Panama is currently the highest in Central America — thanks to you-know-who. Actually, I do share Simon's sincere hope that the "sensible" answer to this crucial question holds forth. That sensible answer, in my opin- ion, is sound rejection of the proposed treaties. [From the Washington Post, Sept. 12, 1977] The Alternative to the Carter Proposals (By Jesse Helms) Let someone say it: What happens if the Panama Canal treaties fail? Does it mean the collapse of relations between the United States and our Latin American friends — or a new beginning? I believe in the new beginning, one that can mean an end to the tortured dis- trust and falsity so characteristic of our relations with Latin America in the past 30 years. Not only have we failed to make good the promised unity of the Rio Treaty of 1947, but we also have ignored profound changes that have taken place in the past 10 years. 164 We have ignored, for example, the painful effort of most of the southern con- tinent to exorcise the double menace of terrorism and Marxism. We have treated as pariahs those proud countries that have been engaged in the diflScult task of restoring social justice to shattered civil societies and of recreating their authen- tic cultural traditions and religious values. And now, at the moment when Presi- dent Carter's advisers suddenly feel the need to create a showplace tapestry of unity against which to display the dubious transaction with Panama, these same nations are suddenly recognized and brought forward, much as doty old rela- tives might be brought down from the attic for dinner on Christmas Day. This is the same kind of exploitation of which our Latin friends have complained In the past. The very premises of the Panama treaties are based on the shaky foundations of outmoded ideologies. No one really believes that the United States can be con- victed of that rhetorical offense of the 1950s, colonialism. Panama and the Pan- ama Canal were born together as if Siamese twins, under separate sovereignties, but yoked together for life. Those who question the legitimacy of that joint birth must question the legitimacy of both. The treaty proponents speak of "the year 2000," as though any transfer of power will take place in another era, or perhaps in another galaxy. The fact is, *'the year 2000" is only 23 years off. To imagine the dramatic shift in the world balance of power that can take place in the next 23 years, one need only reflect on the massive shifts of power in the past 23. One notes, for example, the dra- matic rise in Soviet offensive strategic missiles and the Soviets' parallel effort to build a naval force capable of dominating the seas — not to speak of the stra- tegic waterways that connect the seas. Despite assurances to the contrary, the texts of the proposed treaties show that practical control passes to the Republic of Panama as soon as the United States gives up its sovereign rights. We would be, in effect, strangers in a strange land. Whoever controlled Panama would control our right to defend the canal. The power relationships in the treaty would be inverted. We would become a pyramid standing on its point. Would the treaties be worth more than the paper they are written on? As the British found out. an agreement in principle to get out on a fixed date usually means that the date gets moved up in practice. Moreover, the task of supporting an inverted pyramid will crush any free Panamanian government. Terrorism and civic unrest are tools in the worldwide phenomena of subversion and do not depend upon reasonable pretexts. We must not imagine that Panama will be ex- empted from bloodshed and violence if we ratify these treaties, rather, we must expect intensified efforts to bring the pyramid down. The United States would then be faced with a dilemma; whether to violate Panama's independence with another Dominican Republic-style incursion or whether to cut and run away from a handful of expiring treaty rights no longer workable in a revolutionary environment. Either way, Panama would lose, and so would we. That is why there is no overwhelming sentiment in the Senate to approve these treaties. What is the alternative? On June 30, I spent 40 minutes alone with President Carter discussing what miglit happen should the treaties he has proposed not be approved by the Senate. On Aug. 19, Sen. Strom Thurmond, Sen. Orrin Hatch and I had a similar dis- cussion with President Lakes of Panama. I assured both Presidents that it would be a mistake to interpret a vote against the treaties as a vote against the people of Panama. On the contrary, those who oppose the treaties want to work with the Panamanian people in an even closer relationship, but there is no practical way to do this unless we retain our sovereign rights in the Canal Zone. I proposed to both Presidents that a work such as the major modernization of the Panama Canal would provide an investment of substantial sums in our future relationship with Panama. It would be more than just an investment in our own sovereign territory ; the terms of the program would be mandated to ensure broad Panamanian participation across the social spectrum, to upgrade education and skills-training for the people, to provide detailed managerial experi- ence and to set up ventures with Panamanian firms. KEMAEKS TO THE LEADERSHIP AXD OPENIXG STATE- MENT BEFORE THE SUBCOMMITTEE ON SEPARATION OF POWERS REGARDING CONSTITUTIONAL ISSUES [From the Congressional Record, Sept. 13, 1977 — S14729. S14810] A Matter Calling for a Measxjred and Hurried Decision Mr. Allen. Mr. President, will the Senator yield ? Mr. Robert C. Byrd. Yes. Mr. Allen. Mr. President, I thank the distinguished Senator for yielding. I feel that the issue of the Panama Canal treaties is the most important issue that has come before the Senate during the some 9 years that I have been in the Senate. Based on my reading of the treaties and my recognition of the importance of the Panama Canal to our economic security and our national security, I plan to vote against the treaties. I do not believe it is in the best interest of our Nation or our people that the treaties be entered into. Personally, I had hoped that the matter could be disposed of this year and that the Senate and Congress would stay in session this year until the matter could be disposed of. I might state that I feel that full and complete debate of these issues could be held in the Senate and I feel that under article IV, section 3, paragraph 2 of the Constitution it is requisite that the issue be determined by both Houses of Congress because it is necessary that there be congressional action to dispose of property of the United States. Of course, I readily acceded to the wishes of the distinguished majority leader, but I would like to comment that I do not believe there is going to be any attempt to filibuster this issue. I think that it should come to a vote, and I feel that the arithmetic involved would indicate that there be no filibuster because it takes only 60 votes to invoke cloture and 67 votes to give advice and consent as to the treaty. Furthermore, a filibuster if successful would merely leave the treaty in a state of limbo and it could be brought up at any time. But I do feel that full, complete, and lengthy debate should take place on this issue. I had hoped that time would be found this year to dispose of the matter. The distin- guished majority leader having stated that the matter will not be brought up until next year, naturally, I would abide by his judgment and certainly make no effort to see that the treaties are brought before the Senate, Mr. Robert C. Byrd. Mr. President, I thank the distinguished Senator from Alabama for his comments. The Panama Canal Treaties — Xo. 2 Mr. Allen. Mr. President, on September 8, 1977, the Senate Committee on the Judiciary's Subcommittee on Separation of Powers conducted the third in a series of hearings it has scheduled to investigate constitutional and other issues related to the proposed Panama Canal treaties. As chairman, I opened the hearing with a statement which addressed my concern, and the concern of the overwhelming majority of Alabamians, over provisions of the treaties and over the ultimate effect they would have on the security of our country. Mr. President. I believe these treaties are among the most important issues ever to come before the U.S. Senate. Certainly it is the most important single issue that the Senate has faced since I have been a Member. It is an issue that must be, and will be, debated at length, and all of the arguments must be clearly made and understood, not only by Senators but by all Americans. So that Sen- ators may know of my position, I ask unanimous consent that my opening state- ment at the September 8 hearing be printed in the Record. There being no objection, the statement was ordered to be printed in the Record, as follows : (165) 166 Statement of Senator James B. Allen The Subcommittee on Separation of Powers is convened this morning to con- tinue the Subcommittee's investigation of Constitutional issues arising out of the new proposed Panama Canal Treaty. I am certain that most of those present this morning are aware of the central Constitutional issue under investigation ; how^ever, perhaps I should again reiterate the proposition which is the focal point of this inquiry. Article IV. Section 3, of the Constitution of the United States provides that Congress "shall have power to dispose of and make all needful rules and regula- tions respecting the territory or other property belonging to the United States.'' The power given to Congress in that clause appears to be exclusive and, if it is an exclusive power, then the Executive is prohibited from entering into a treaty disposing of U.S. territory except with express Congressional authorization, that is, authorization by both Houses of Congress in addition to Senate approval through the treaty ratification process. Additionally, members of the Subcommittee are also deeply concerned that the Executive Department has reached certain financial agreements with the Pan- amanians for substantial financial assistance outside of the context of the pro- visions of the treaty itself. These financial agreements, if not embodied in the treaty, will not be subjected to the normal treaty ratification process which would otherwise be the case. The Subcommittee has further learned that the Congressional appropriations process itself may in large measure be circumvented in the implementation of proposed financial arrangements with Panama but that nevertheless substantial sums of money are proposed to be made available to Panama by unilateral Executive Branch action. The Subcommittee will therefore diligently continue to seek testimony on the full intentions of the Executive Department with respect to separately negotiated financial and banking arrangements with the Republic of Panama. Finally, in continuing its work the Subcommittee will seek to determine the extent to which the operative provisions of the Executive Department proposal are embodied in the executive agreements rather than in actual treaty language. There are, of course, in fact two treaties — the proposed Panama Canal Treaty itself and an additional treaty which purports to provide for the neutrality of the Panama Canal. Unfortunately, these treaties are in no way to be construed as the whole agreement. Both treaties are accompanied by very lengthy executive agreements which actually contain the substance of the deal struck with Panama. These executive agreements, once implemented, would be subject to renegotia- tion — and we find this astonishing — every two years. This Subcommittee, I am sure, shares a concern of many that Congress will relinquish forever any control over this country's relation with the Republic of Panama if the Executive Department is authorized to enter into a plenary rela- tion with Panama based not, in reality, on treaty law but rather based on execu- tive agreements authorized by treaty law but subject to change at the whim of tlie Executive. In short, the Subcommittee wishes to establish by its inquiry the extent to which the Executive would be given a blank check by the new proposed treaties to amend, interrupt, abrogate, or replace entirely the lengthy accom- panying substantive executive agreements. I have just returned from Alabama where in the course of the August re<'ess I met with citizens in 37 counties. These meetings were held in most instances at the County Court House; they were widely announced and well attended. One topic was invariably raised. Notwithstanding drought, unemployment, in- flation, high energy prices, low farm prices, and a host of other subjects which could easily have been foremost in mind, virtually every group I encountered wished to know the answer to one question — w^ould the United States, in fact^ give away the Panama Canal Zone? Of the thousands I spoke with almost no one favored a policy of surrender in Panama. Many are saying that the people need education and that with education they will come to support the giveaway of the American Canal in Panama. In my judgment, the true state of affairs is the exact opposite. Further knowledge will only strengthen the resolve of the people, and in my judgment, our all-wise federal establishment could itself well stand some education from the American citizen wbo has the wisdom to see the obvious fact that the Panama Canal is vital to the economic stability and military security of the United States . . . from the American citizen who has the common sense to recognize the lunacy of paying billions to an unstable pro-Marxist dictatorship for taking over billions in prop- 167 erty belonging to the United States . . . from the American citizen who has the clarity of thought to see the reality behind the sliam, the shell game, and the traveling medicine show that has passed for an open discussion of the actual provisions of tliis proposed new arrangement with Panama. Perhaps, however, Americans do need education in the fine points of th& Panama Canal Treaty. That education has been hard to come by of late because- throughout the treaty negotiations a veil of secrecy prevented any useful infor- mation being made available either to the public or, in large measure, to the Congress. Perfunctory briefings containing no real substance and seeking no, advice, to be sure, were conducted. However, until yesterday most of the infor- mation this Subcommittee has been able to obtain on the new Treaty has come from translations of speeches made by the Panamanian negotiators in Panama. By that method we have learned tliat the Panamanians expect to receive during the next 23 years at least $2,262 billion in cash payments from the United States. The Department of the Treasury, when its representative testi- fied, was apparently unable to advise the Committee of the substance of any negotiations whatsoever with Panama, yet we could read from translated. Panamanian documents that the Export-Import Bank plans to lend Panama $200 million, that the the Agency for International Development is to guaran- tee — and no doubt pay off — housing loans in the amount of $75 million, and that the U.S. Overseas Private Investment Corporation is to guarantee $20 mil- lion in loans for a new Panamanian develoi)ment bank — everyone else has a bank in Panama, why shouldn't the Panamanians? Finally, the Committee has learned no from the Department of Defense but from the Panamanians that $50 million in military aid would be provided to prop up and guarantee the continuance of the military dictatorship now oppressing the people of the Republic of Panama. But now that the proposed Panama Canal Treaty and neutrality treaty have finally been made public, there are disclosed even more items about which the American citizen should be educated. The American citizen should learn that in addition to all the other massive payments to be made to the Republic of Panama, as the ultimate insult, it is proposed that we pay to the Republic of Panama $10 million a year for providing police services within the territory which would be ceded to Panama. We hope that during his education the American citizen will share our own disbelief and outrage that our gi-eat country proposes to cede United States territory to Panama and then to pay Panama for performing the normal functions of government within that same land. We hope, too, that the American citizen will soon learn that out of 14 military bases now in the Canal Zone, only 4 would remain after implementation of this Treaty and that the 4 retained bases would be under direct Panamanian civil and political jurisdiction, subjecting thereby our Armed Forces to the dictatorial rule of the present Panamanian government. And although it is true that a status of forces agreement will provide some marginal protection to U.S. soldiers in the Canal Zone, the American citizen should learn that in essence our forces will be made subject to a code of laws based on the autocratic rule of one man and devoid of any Constitutional safeguards even remotely resembling those precious American rights now enjoyed within the Canal Zone. Yes, there is much to learn about this proposal. Does the average citizen now know that the American flag will not be permitted to be flown in a place of honor, even at our military installations, and, according to the speeches of the Panamanian negotiators, will be permitted at our own bases only when inside and when displayed jointly with a Panamanian flag in the position of honor. Perhaps this latter point is trivial, but it typifies this entire proposed agree- ment . . . our flag in a broom closet and our vital Canal at the mercy of a banana republic. So, the Subcommittee on Separation of Powers does intend to continue its investigation of these issues to insure that all the facts are made available both to the Congress and to the people. We will be, I am sure, greatly aided in our efforts by the witnesses scheduled to appear at today's hearings. COXSTRUCTIOX OF XEW CAXAL IX AXOTHER COUX- TEY FORBIDDEX UXLESS PERMITTED BY PAXAMA [From the Congressional Record, Sept. 15, 1977 — S14953] The Panama Caxal Treaties — No. 3 Mr. Allex. Mr. President, Senators, I am sure, over the past few days have been studying carefully the details of the Panama Canal Treaty and its asso- ciated executive agreements. In my own review of the proposed treaty, one aspect is particularly disturbing to me because it is so obviously unnecessary to the basic provisions of the treaty and because it so totally favors the Panamanian position to the great detriment of our own country. I refer. Mr. President, to the treaty provision forbidding the United States to agree with any other country except Panama for the construction of a new Western Hemispheric Inter- oceanic Canal, unless expressly permitted by Panama in some further future agreement. The treaty reads in relevant part as follows : "During the duration of this Treaty—" And that would be the year 2000 — "the United States of America shall not negotiate with third States for the right to construct an interoceanic canal on any other route in the Western Hemisphere, except as the two Parties may otherwise agree — " I find it astonishing that the negotiators for the United States saw fit to pre- clude any possibility of construction of a new interoceanic canal, perhaps at sea level, without our first obtaining the express consent of a pro-Marxist and highly unstable military dictatorship. Why was this concession necessary? What did we gain from this concession? I notice with some amusement, Mr. President, that the Republic of Panama purports to grant to the United States of America the right to add a third lane of locks to the existing canal. Inasmuch as the United States already has the right to add a third lane of locks to the existing canal, surely our negotiators did not think that a meaningless concession of that variety was sufficient consid- eration for giving the Panamanians a veto over any other project we may wish to undertake to connect the two oceans. Certainly, the negotiators for the United States could not have felt that the Panamanian agreement to commit Panama "to study jointly the feasibility of a sea level canal" warranted a countervailing commitment from the United States not to do anything whatsoever without Panamanian permission — but perhaps so. The bizarre behavior of our nego- tiators has produced other results equally as startling. In any event, Mr. President, one thing is sure and that is that the Panama- nians know they got the best of this bargain. Discussing the sea level canal issue, chief Panamanian negotiator. Romulo Escobar Eethancourt, on August 19, 1977, explained to the Panamanian National Assembly the unilateral bemfits of the so called sea-level canal options. Dr. Bethancourt's remarks on the subject are illuminating and are worth studying in full. Instead of obtaining an option to build a sea level canal, our negotiators gave to the Panamanians the option to veto construction of a se-a level canal by the United States anywhere in the West- ern Hemisphere. But here are Dr. Bethancourt's own remarks. I am quoting them at some lengtli for the benefit of the Senate and the public. I believe we can find out more from the Panamanian negotiators as to what this treaty really means than we find out from listening to our owti negotia- tors. Here is what Dr. Bethancourt, the Panamanian negotiator had to say : "Tbe other problen"*' we — " Speaking of the negotiators on both sides — "The other problem we discussed was that of the option for the construction of a sea-level oanal. In all these years the problem of a sea-level canal was hardly discussed at all at the negotiating table. There were about two talks on this. We discussed this, nothing came out of these discussions and then came the Bogota conference with the presidents." That is, the Presidents of the various countries. "That is where the option (168) 169 problem really reached a crisis. It reached a crisis because a very direct and con- tiiinoiis commiiiiicatioii was established among all the presidents meeting there and President Carter through negotiators Bunker and Liuowitz as well as with us through Dr. Giogeues de la Rosa, who was there at the time, and our Ambassa(hir Gabriel Galindo." This is Dr. Bethaneourt. the Panamanian negotiator, talking. Continuing with his remarks ; "But they made a proposal to us — " That is, our negotiators made the proposal to Panama — "But they made a pro- posal to us on that option and that is why the issue reached a crisis. They pro- posed that Panama grant them an option to build a sea-level canal without set- ting any date. Second, they wanted Panama to promise that no other country would construct a sea-level canal." These are very fine proposals that our people made. Let us see if they won out. "We rejected that proposal in Bogota. We read it to the presidents. That was the proposal brought the previous evening by several of our negotiators and we read it to them. The negotiations between the two countries was practically broken in Bogota. So much so that I remember that at one point General Torrijos told the presidents : **Well, we called this conference several days ago for a celebration of a new treaty and it turns out that we have come for the wake." The struggle between the two countries ])egan in Bogota. And I say the two •countries because the rest of the presidents got as involved as if they had been Panamanians. We must really be very grateful to the presidents that met with the general in Bogota. Regarding this problem they acted just like any of us ; they even wanted to walk out mad. The ^lexiean president wanted to get on his plane and leave ; he was very furious. They all became Panamanians regarding the option problem. •'When the I'nited States finally realized that there was no way in which an agreement would be reached regarding tliis option in the terms they were pro- posing and that the issue had reached an impasse, they asked for a recess. During that recess, we continued our discussions with the presidents meering in Bogota. "The Panamanian delegation then prepared a draft which all presidents liked. They said it was correct and fair. We then called the United States, they exam- ined it for a while and finally accepted it. I think that it would b-e a good idea to read the text of this draft to you so that you will see how the option problem came out. I read : "Article 3. Possibility of building a third set of locks or a sea-level caual. •First, the Republic of Panama and the United States of America acknowledge that a sea-level canal can be important for future international navigation. As a result of this, after supporting the treaty of the existing canal and for the duration of this treaty, both countries promise to study jointly the viability of such a canal. In the event that the need for such a canal is viewed favorably, they will negotiate its construction in the terms agreed on by both the countries. This is how the option issue came out. (Applause. ) " This is Dictator Bethaneourt, still quoting him. "As you can see, it is not even an option to build a sea-level canal. It is an option to promise to study the viability of it." He is letting the cat out of the bag. Mr. President, in his comments there to his i)eople. "That is the true option. The true commitment is to sit down with the United States to study whether or not it is viable to build a sea-level canal. If the two countries feel it is viable, they will sit down to negotiate the terms agreed on by rhe two countries. * * You know, Mr. President, this fellow Bethaneourt has been very helpful to me in understanding the true implications of the Panama Canal Treaty. From him, I learned the true meaning of the so-called neutrality pact. From him, I learned that the neutrality pact was a sham and of no true benefit whatsoever to the security of the United States. I cannot help but note, Mr. President, in reviewing Dr. Bethancourt's August 19 speech that he explains that the real purpose of the neutrality pact is to propagandize the U.S. Congress and the people of the United Stares with the myth that the neutrality of the canal will be insured after Decem- ber 31. 1909. But I would prefer that Dr. Bethaneourt answer in his own words the question. "Why this neutrality pact?" He states this: "* * * Because they think—' That is. the United States — "* * * Because they think that maybe in the year 2000 this country will become socialist and will turn into their enemy and they 170 feel it is better to make sure right now that even if our country becomes socialist — " Panama, that is — "it cannot prevent them from using the canal. To be even more frank, they do not need that neutrality pact to tell them whether or not they may intervene. They need it to show to their Congress in order to be able to tell their Congress : "Look, we are turning the canal over to the Panamanians, but we still have the right to watch over them so they behave." That is the truth. It is a ques- tion of their internal policy. They are solving an internal problem regarding a Congress that is largely opposed to these negotiations and which even has mem- bers who have not been elected of their own free will, turned into members of the U.S. Congress. They are Panamanians who lived here and in Miami. I do not know whether that is a substantive loss in translation or not, because I do not know of any Members of the House of Representatives who were not elected of their own free will. I know of no Senator or House Member who was forced to run for the position he holds. There is a parenthetical statement that that was "as heard," and there was great applause, as shown by the transcript of his remarks. Mr. President, it strikes me that there is an awful lot of eyewash in these trea- ties for the benefit of Congress and mighty little in them for the benefit of the United States. We have obtained a neutrality pact which is meaningless, and we have foregone the right to construct a new canal without the express consent of a gangster dictator. What a spectacle this situation must present to the world — the United States required to seek the consent of a reprehensible and repressive minor autocrat before even undertaking canal discussions with another sovereign na- tion. How does that strike the average American? We cannot even negotiate with another country for 23 years about building another canal without the express permission of the Panamanians. It just humiliates the United States. Before even undertaking canal discussions with another sovereign nation, the United States is surrendering control of a vital international waterway to the Communist advisers of a bandit government. Mr. President, I have availed myself of this opportunity of discussing two features of the canal treaty. At other times I plan to discuss other sections of the treaty, in order that Members who care to read the Record will see the views that I have expressed, and will have a right to consider whether these provisions are in the interest of the United States. I do plan, as does the distinguished Senator from Virginia (Mr. Scott), to make other speeches here on the floor of the Sen- ate, in the hope that those who read the Record will be able to see just what is involved, and in hopes that others throughout the country may be advised. Mr. Scott. Mr. President, will the Senator yield to me? Mr. Allen. Yes, I am delighted to yield to the Senator from Virginia. Mr. Scott. Mr. President, I commend the distinguished Senator from Alabama for the statement that he has made, for his penetrating analysis of Article 12 with regard to the construction of an additional lane or an additional set of locks in the existing canal, and the prohibition against the United States constructing an additional canal at any other spot in the isthmus outside of Panama. I agree with the distinguished Senator ; there seems to be alisolutely no reason why our Government should agree with another nation not to construct some- thing outside of their territory. Frankly, Mr. President, if someone in the committee does not strike that pro- vision of the treaty under the amending process, I believe it should be done on the floor of the Senate and I will be prepared to do so unless another Senator does. I would like to go further than the remarks of the distinguished Senator has made on the floor today and commend him as chairman of the Subcommittee on Separation of Powers of the Senate Judiciary Committee for holding hearings, as he has done, in attempting to find out the legalities of this proposed treaty which has been signed by the President, which was obtained by the State Department. I believe we need reason and we need to determine just how we should proceed. Mr. President, it is basic in the laws of contracts that there be some quid pro quo, that there be some consideration flowing from one party to another. I do not see any quid pro quo in this treaty. The distinguished Senator from Alabama, and the subcommittee on which I am privileged to serve with him. is attempting to delve into this question. T would hope, Mr. President, that somehow we can eliminate the emotionalism and do some straight thinking as to what is best for our own Government in 171 determining whether the Senate should advise and consent to this treaty. I ap- preciate the Senator yielding. Mr. Allen. I thank the distinguished Senator for his comments. I commend him for his hard work on this issue and the leadership he has exerted in seeking to point out the dangerous provisions, the unfair provisions, in the treaty. I com- mend him for his work on the Separation of Powers Subcommittee of the Judi- ciary Committee. I also appreciate his enlightening the Senate and the country on these is.sues. The Senator mentioned that there needs to be a quid pro quo in a contract. There also needs to be a meeting of the minds between the contracting parties. Obviously, there is no meeting of the minds on many, but certainly two, very important issues. One is the priority of our ships in the canal. Apparently there is no priority as the Panamanians regard the construction of the treaty. Second is the misunderstanding about the neutrality of the canal ; whether we have a right to determine whether their neutrality is in danger ; whether we have a right to land troops there or not. The Panamanians say not. So there is no meeting of the minds here. The distinguished Senator from Virginia raises another most important point and it will be asked of the Chair at the proper time, though not now, when the treaty is before the Senate. lie feels in the committee, and I feel on the floor certain action should be taken ; the committee should strike this provision requiring the United States to get the permii>sion of Panama before even negotiating with another nation for another canal, a sea level canal. I feel reasonably sure that the committee will strike this very dangerous provision, and I feel the Senate will back up the committee. Having seen one of its provisions stricken, and the Senate if it should approve the treaty with major amendments made to the treaty, would that require the execution of another treaty? There are constitutional authorities to the effect that once a treaty is amended it cannot then be approved by the other party witliout entering into a new treaty. If that be the case, if major amendments are made to the treaty, it may well be that that, in itself, will defeat this treaty, be- cause it will require entering into a new treaty. It will be an interesting constitutional question about which the Chair will be asked. That question may have to be submitted to the Senate for the Senate's view. That would not necessarily be binding if. in fact, that would vitiate the treaty in the absence of another treaty submitted to both countries. Mr. Scott. Will the Senator yield on that point? Mr. Allen. I yield. Mr. Scott. It would appear to me that in the event the Senate does offer amend- ments and they are adopted by the Senate, and the treaty, as amended, would later be ratified by the Senate, this would influence the executive branch of Gov- ernment in its efforts to negotiate a new treaty. I feel, quite frankly, Mr. Presi- dent, that the Senate is somewhat closer to the people of the United States than the executive branch. Certainly, it is closer than the unelected negotiators of this treaty. In fact, no one within our State Department or within our diplomatic corps has had to face the electorate as has each Member of the Senate. I feel someone must speak for the people, and I hope it will be the Senate. Mr. Allen. I thank the distinguished Senator. There is one other point I would like to make as we suggest guidelines for the consideration of this treaty. I do not foresee here on the floor of the Senate a filibuster against this treaty. I believe there will be a long discussion, a legiti- mate debate. Though I have not discussed the matter with the leadership, I feel sure that the leadership would not file any cloture petition as long as the debate is legitimate debate. It may last for weeks without being a filibuster. I do not believe a filibuster will ensure, one reason being the difference in what it takes to cut off a filibuster, 60 votes, and 67 votes to approve the treaty assuming all Senators are present. Far more than that, the reason there will not be a filibuster is if the treaty is defeated by extended debate, the treaty would still remain on the Executive Calendar for the next session of this Congress and for succeeding Congresses, to be brought up by the leadership at any time. What I am going to be working toward is a vote up or down on the treaty. Once it is defeated by the Senate, it becomes a complete nullity. If other negotiations are held and other treaties are submitted to the Senate, we would have to con- sider them ab initio. But there will be no filibuster, as such, and no need to invoke -cloture. The Presiding Officer. The Senator's time has expired. PAXAMAXIAX MIXISTER BARLETTA ESTIMATES THE CASH ELOW FROM THE PROPOSED XEW TREATIES IX STARK COXTRAST WITH AXALYSIS BY THE TREAS- URY DEPARTMEXT [From the Congressional Record, Sept. 16, 1977 — SI 5033] The Panama Canal Treaties — No. 4 Mr. Allex. Mr. President, on Monday, September 12, 1977. I brought to the attention of the Senate remarks made by eliief Panamanian negotiator, Dr. Romnlo Escobar Bethancourt, who gave interpretations of the treaty at a news conference in Panama City on October 24. Dr. Betlianconrt's comments showed that, at least in the minds of the Panamanians, the United States would not have the right to intervene militarily to guarantee the neutrality of the canal nor would the United States have the right to priority of passage of its vessels of war. Today, Mr. President, I have received a translation of a speech given by the Panamanian Planning and Economic Policy Minister. Nicholas Ardito Barletta, given on August 19, 1977, before the National Assembly of Panama in Panama City. Minister Barletta's remarks should be of great value to the Senate in assess- ing the actual economic impact of the proposed canal treaty. Like Dr. Bethan- court, Minister Barletta interprets tlie treaty to his country in a manner which stands in stark contrast to the cost analysis presented by our own Goveniment. While the treaty provid(^s only for the payment of $20 million per year for poUce services and for fixed annuity. Minister Barletta states that the cash economic benefits actually amount to the astonishing sum of .$2,262 billion in 1977 dollars, for an annual average payment of approximately $100 million. That is for each of the 2:J years of the Hfe of the treaty. Mr. President, s(mie rather ingenious devices have been discovered by the executive department for providing this $2^4 billion to Panama without the necessity of seeking congressional approval through the appropriations process. But. Mr. President, unlike our own Department of the Treasury. Minister Barletta gives a very careful explanation of the devices used and, in my judgment. Senators should therefore find of great interest the entire substiince of his speech which I intend to enter into the Record if given unanimous consent to do so. For example. Minister Barletta reckons the average income to Panama from the proposed new Panama Canal Commission to be $80 million per year, not a maxi- mum of .$20 million as expressly stated in the proposed treatv. But his explana- tion IS better than any that I could give. Here is wliat Minister Barletta had to say : * * The agreements reached in this aspect are as follows: An average income of .$80 million per year, I repeat, average, for the next 23 veai-s: that IS, a total of $1.8 billion in the 23 ye^irs. The majority of this income is subject to a clause of inflationary correction so that the annuitv consistentlv maintains Its purchasing value, based on the year 1977." Jt is quit<' easy to see that tiiis amount would escalnte tremendouslv in 23 years, if we continue the Inflationary spiral of some 6 or 7 percent, 'on the average, per annum — "The income for the first year is estimated to be $65 million. Bv the end of the treaty, the amount will reach approximately S^lOO million in real values of 1977, that IS, corrected against any inflation that may occur during that period. The mean of this gradually increasing sum gives us the average amount of .<^80 million. This income is itemized as follows: $0.30 for each ton of cargo that tran.sits the canal. According to trafl5c projections through the canal, this means an '^verage income of .$.55 million per year which in the first year will amount to about $42 million, to reach $70 million by tlie end of tlie century." (172) 173 Of course, that would be added to the oil that we receive from Alaska, and: it is anticipated that there will be a tremendous volume of oil going through the Panama Canal in years to come — "The second item of this round sum is $20 million per year, of which $10 million is guaranteed each year, the rest depending upon the level of income of the Panama Canal Company in that year. If in one year the second half of the 320 million cannot be covered, tlie deficit caused would be covered in the subse- quent years to maintain the $20 million per year payment." This is in addition to the average of $80 million, which would make it up to $100 million in 1977 dollars — "And a third item of approximately $5 million per year of income will come from several businesses and operations being transferred to the national govern- ment, such as ports, railroads, sale of fuel, repair of ships, and so forth. There- fore, the total sum of $80 million is comiwsed of these three items that I just discussed * * *" But. Mr. President, in glowing terms and with obvious pride in accomplish- ment, Minister Barletta points out other plums he succeeded in shaking loose in the negotiations. And the Panamanian negotiators surely did skin our negotia- tors. They just outtrad(^ us. We are supposed to be the Yankee traders, but they surely outtraded our negotiators ; and every step of the way, of course, the negotiations were carried on in secrecy as far as the general public here in the United States is concerned ; and then we are confronted, here in the Senate, with a fait accompli, with tlie treaty already signed, with great fanfare, by the President. But here is what Minister Barletta says they shook from the plum tree of^ the American taxpayers : "Another aspect gleaned from the canal operation is the transference to Pan- ama — as Edwin Fabrega will explain shortly — of l>uildings and infrastructure for a current value of $82 million. Aside from this aspect, which is what Panama would derive from the operation of the canal and from the transfer of pliysical assets which currently exist in the Canal Zone, there is a parallel and corollary package of economic cooperation. This package reaches an amount of $3J.j million, above all, within the next 5 years, and is itemized as follows: loans from the Export-Import Bank up to the amount of $200 million in the next 5 years : loans for the construction of housing guaranteed by AID up to $75 million in the next 5 years: loans guaranteed by a U.S. agency called OPIT for .S20 million for Cofina, our development bank, and other loans and equipment, principallv mili- tary equipment, for the amount of $50 million in the next 10 years." Furthermore, Minister Barletta places a 1977 value on facilities which will be donated to Panama in 1999. His figure is $.3 billion, and I have little doubt that it is correct, as to the value of the facilities which will come to Panama in 1999.. Or, possibly, it will be a much higher figure. Minister Barletta continues: •'Aside from the foregoing, it must be emphasized that all the rest of the existing structures in the Canal Zone, that is. the canal itself and tlie rest of the civilian and mihtary installations, will be returned to Panama, free of charge on 31 December 1999." "Returned to Panama"; this is Barletta's language, it is not the language of the Senator from Alabama, because I do not feel it is a return to Panama. It is a gift to Panama, because obviously they had nothing to do with constructing these facilities, or with constructing the Panama Canal : ''And these structures have an approximate value of $3 billion curreiitlv Aside from that, we must also point out that Panama will receive from tlie company that operates the canal the amount of $10 million per vear, also with inflationary correction, to cover the costs of the public services which Panama win administer in the exercise of its jurisdiction in the zone area, for these- servic-es which are generated by reason of the existence and operation of the Pan- trTasurv"' ' lending these services will cost nothing to the national We are going to pay for the police operations there in the Canal Zone real JJrnnlf '^^^^^ does not place a dollar figure on the immensely valuable n?fifSf^ 1-'^.'^^"''^ "^^"^^ transferred to Panama immediatelv upon imple- Cdolrhn:"! "2'''^^ those real property values must be well into the billions. He does, however, discuss the significance of the cash contributions in terms of III ^^^f of the Government of Panama. His remarks in that respect ?erre'^^rto';hf/L'n^ ^''^ tremendous benefits being tr ns- ferred to this small country of only 1.7 million citizens. Perhaps the Governors 174 of some of our smaller States would particularly appreciate Minister Barletta's thoughts on this subject : ''In brief, what is the significance of these figures? We can say that in the next few years, the next 3 or 4 years, the amount of the annuity alone, without taking into consideration the economic cooperation, is 19 percent of the national government's budget; that is, it is a considerable increase, one-fifth." That is just the amount of the annuity alone. "It is 25 percent of the operational expenses of the current budget and is 15 percent of the program of investments of the public sector. As the national govern- ment's intention for the time being is to devote the majority of these resources to solving the problems of our nation, the problems of our people through its investment program, we have to take into consideration that this amount — the annuity only, which in the first few years will be approximately $65 million per year — means at least 15 percent more for the program of investments being carried out by the country. This amount can become a figure of more impact through financing which can be negotiated on the basis of this income." They are going to use this income as a vehicle to get still more money by putting this in as equity. '*We can also say — as another manner of illustrating what these figures mean, because they are so large that one often does not see them in real terms — that this means considerably speeding up the program of investments which we are developing." There he refers to public works and investments in Panama. "All of us here are aware that during the past year we have had to reduce investment in order to face the serious economic crisis which the country and the world have been experiencing. * * *" So, Mr. President, the Panamanians plan not only to take the loans and cash we are offering; they also apparently intend to use our money as leverage for additional loans. Panama is already bankrupt, but the spendthrift Panamanian Government no doubt has already pledged our country's largesse as collateral in a mad search for even more borrowed funds. Later on, Mr. President, I am going to talk about the loans by the big banks in this country to Panama and the fact that this treaty income that Panama will receive from the U.S. taxpayers and the users of the canal will be used to pay on these existing debts. Mr. President, sooner or later the Congress must draw the line and stop rob- bing American taxpayers to extend funds to bankrupt. Third World countries so that international banks can collect principal and interest on shaky loans. In my judgment, the international banks should be required to write off their bad debts, at least some portion of the loans they made in error, and the interna- tional banks should be put on notice that the American taxpayer will not always guarantee a profit in any loan transaction with unstable governments. Perhaps, tlie Panama Canal treaty will be a good starting place. Mr. President, I ask unanimous consent that Minister Barletta's speech be printed in the Record. There being no objection, the speech was ordered to be printed in the Record, as follows : Excerpt From Speech by Minister Nicolas Ardito Barletta Gentlemen representatives, colleagues, ladies and gentlemen : It is my duty to inform you about the economic aspects of these negotiations, aspects which are fully as important as the others because at this stage we are all convinced of the necessity that a strong national economy must be the basis for obtaining and fully implementing our freedom of action. They are important also because the real valorization of our geographical position as a natural resource was at stake as well as Panama's obtaining of revenue equal to the value of that geo- graphical position. This means, as a result, the real possibility of accelerating Panama's general development and providing an answer to the important needs of our people in this process. In other words, it would be one thing to have dignity and sovereignty with hunger and quite another to have and to consoli- date the dignity and the sovereignty with the integral development of our people. And this has been our aim through the economic asi^ect of these negotiations in attempting to consolidate the value of our geographical position and the re- sources and revenue which respect to it so as to use it in our development. The agreements reached in this aspect are as follows : An average income of $80 million per year, I repeat, average, for the next 23 years ; that is, a total of $1.8 billion in the 23 years. The majority of this income is subject to a clause 175 of inflationary correction so that the annuity consistently maintains its pur- chasing value, based on the year 1977. The income for the first year is estimated to be $65 million. By the end of the treaty, the amount will reach approxi- mately $100 million in real values of 1977, that is, corrected against any in- flation that may occur during that period. The mean of this gradually increas- ing sum gives us the average amount of $80 million. This income is itemized as follows: $0.30 for each ton of cargo that transits the canal. According to traffic projections through the canal, this means an average income of $55 million per year which in the first year will amount to about $42 million, to reach $70 million by the end of the century. The second item of this round sum is $20 million per year, of which $10 million is guaranteed each year, the rest depending upon the level of income of the Panama Canal Company in that year. If in one year the second half of the $20 million cannot be covered, the deficit caused would be covered in the subsequent years to maintain the $20 million per year payment. And a third item of approximately $5 million per year of income will come from several businesses and operations being transferred to the national government, such as ports, railroads, sale of fuel, repair of ships, and so forth. Therefore, the total sum of $80 million is composed of these three items that I just discussed. Another aspect gleaned from the canal operation is the transference to Panama — as Edwin Fabrega will explain shortly — of buildings and infrastruc- ture for a current value of $82 million. Aside from this aspect, which is wiiat Panama would derive from the oi>eration of the canal and from the transfer of physical assets which currently exist in the Canal Zone, there is a parallel and corollary package of economic cooperation. This package reaches an amount of $345 million, above all, within the next 5 years, and is itemized as follows : loans from the Export-Import Bank up to the amount of $200 million in the next 5 years ; loans for the construction of housing guaranteed by AID up to $75 million in the next 5 years ; loans guaranteed by a U.S. agency called OPIT for $20 million for Cofina, our development bank, and other loans and equip- ment, principally military equipment, for the amount of $50 million in the next 10 years. In short, all these elements of economic benefits which I have mentioned in structures, payments and loans for development will in 23 years amount to the sum of $2,262 billion. Tliis is compared to what Panama would receive under the current treaty during that same period, which would be the ridiculous amount of $52 million. This, then, is the difference between whut this treaty means as far as economic benefits and w^hat Panama would receive under the current treaty. Aside from the foregoing, it must be emphasized that all the rest of the existing structures in the Canal Zone, that is. the canal itself and the rest of the civilian and military installations, will be returned to Panama, free of charge, on 31 December 1999. And these structures have an approximate value of $3 billion currently. Aside from that, we must also point out that Panama will receive from the company that operates the canal the amount of $10 million per year, also with inflationary correction, to cover the costs of the public services which Panama will administer in the exercise of its jurisdiction in the zone area, for these services which are generated by reason of the existence and operation of the Panama Canal. Therefore, lending these services will cost nothing to the national treasury. In brief, what is the significance of thes'e figures? We can say that in the next few years, the next 3 or 4 years, the amount of the annuity alone, without taking into consideration the economic cooperation, is 19 percent of the na- tional government's budget; that is, it is a considerable increase, one-fifth. It is 25 percent of the operational expenses of the current budget and is 15 per- cent of the program of investments of the public sector. As the national gov- ernment's intention for the time being is to devote the majority of these resources to solving the problems of our nation, the problems of our people through its investment program, we hav'e to take into consideration that this amount — the annuity only, which in the first few years will be approximately $65 million per year — means at least 15 percent more for the program of investments being carried out by the country. This amount can become a figure of more impact through financing which can be negotiated on the basis of this income. We can also say as another manner of illustrating what these figures mean, be- cause they are so large that one often does not see them in real terms — that this means considerably speeding up the program of investments which we are developing. All of us here are aware that during the past year we have had to reduce investment in order to face the serious economic crisis which the country and the world have been experiencing. ABILITY TO OPERATE AND DEFEND THE CANAL QUESTIONABLE [From the Congressional Record, Sept. 20, 1977 — S15192] The Panama Canal Treaties — No. 5 Mr. Allen. Mr. President, last Friday there was an interesting editorial in the Wall Street Journal by George F. Kennan, who is. I am sure, well known to Senators. Mr. Kennan is currently professor emeritus at the Institute for Advanced Studies in Princeton, N. J., and throughout his very distinguished diplo- matic and academic career he has been a leading and very able apologist for Third World dictators and Soviet imperialism. Mr. Kennan's editorial was no doubt seen by many, but I feel its significance should be emphasized to all. His subject was the proposed Panama Canal Treaty, and surprisingly he appar- ently shares my own opinion that the plan for joint United States/Panama opera- tion of the canal — as set forth in the treaty — is totally unworkable. However, Mr. President, rather than concluding that the treaty should be rejected, Mr. Kennan recommends an immediate, total withdrawal from the Isthmus of Panama. Prof. George Kennan has always stood, so to speak, at the head of the class, and I wonder if he is not setting the stage for the next act in the Panamanian road show. Would we ratify this proposed treaty only to face renewed demands l)y dictator Torrijos that the area be abandoned entirely and immediately? In my judgment, following ratification, such a result would be inevitable. But. Mr. President, as I said. George Kennan does agree with the view held by many of us here in the Senate that the proposals for joint operation of the Panama Canal Company are going to cause more problems in our relations with Panama and Latin America than they would solve. As Mr. Kennan put it : " * * * One can only quail at the prospect of attempting to operate and protect the canal in some sort of "partnership" with the Panamanians. An arrangement of this nature would weaken the American position without giving permanent and complete satisfaction to the Panamanians. It would be replete with possibilities for disagreement and minor conflict. * * * " Yes. Mr. President, this proposed solution would indeed be "replete with possi- bilities for disagreement" and with the possibility or probability of minor, even major, military conflict. Surely, the Department of State must recognize the futility of undertaking to operate the Panama Canal on a joint basis with participation by two nations hav- ing wholly divergent political systems, national goals, technological ability, and national temperament. Rather than the "possibility of disagreement" suggested by Mr. Kennan, the United States and Panama would face the certainty of dis- agreement — virtually on a day-to-day basis — throughout any joint operation of the Panama Canal. These disagreements would range from what is a "reason- able" rent to be charged to occupants of housing which now belongs to the United States and is occupied by U.S. citizens to the proper level of transit shipping tolls to be charged in order to guarantee a profit to the new joint company so that Panama could be paid its $10 million kicker for a profitable year. We have not seen a spirit of conciliation or give-and-take from the Panamanians in the nego- tiations for this one-sided canal treaty, we have already seen that they disagree with our interpretation of it, and we ought not to be so naive as to expect a con- cilintory attitude from the I'anamanians in the joint operation of the canal. Musing over these same problems, Mr. Kennan speculates as follows: " * * * Could not the dilemma be better resolved, one wonders, by turning the Canal over entirely to the Panamanians * * * " He continues with this statement in a burst of candor : "The proposal may sound extreme." Yes. Mr. President, George Kennan's proposal does sound extreme because it is extreme. Would not a better option be exercised in a simple rejection by the (176) 177 :Senate of this Inaicrously inept document, the Panama Canal Treaty, which unfortunately the executive department is seeking to foist on the citizens of the United States and on the Congress? But, Mr. President, George Kennan must be given due credit for recognizing •what has seemingly eluded the leading active-duty military thinkers in our Defense Establishment. George Kennan accurately points out that the Panama Canal Treaty will not be a panacea guaranteeing our freedom from insurgent attack on Panama Canal installations or on U.S. Forces in the Isthmus of Pan- ama. If the Canal Z(me is already indefensible as many would have us believe, how much more indefensible will it be when the U.S. military presence is reduced to 4 bases, as against some 14 now and limited, more or less regardless of the cir- cumstances, to present strength. With deference to Mr. Kennan's peculiar perception of this fact, it does not take a visionary or a great military planner to be able to see that U.S. Forces — when confined to four small bases and associated military areas — are going to be par- ticularly vulnerable to harassing attacks designed to hasten our withdrawal from Panama. Mr. Kennan seems to acknowledge that such attacks would be likely should the proposed treaty be ratified and should the United States thereby signal its complete lack of resolve to defend and protect the Canal. In his testimony before the Subcommittee on Separation of Powers of the Com- mittee on the Judiciary, Lt. Gen. Dennis McAulifte, Commander in Chief of the Southern Command, including Panama, stated the mission of his troops as follows : "The principal mission, sir, is that of defending the Panama Canal and the Canal Zone * * * " Thereafter, I pursued a line of questions which I am satisfied got answers demonstrating the present defensibility, not indefensibility, of the canal and lay- ing to rest the myth that the canal cannot be defended by our forces in their present posture. Mr. President, .Senators should find General McAuliffe's testi- mony decisive on this subject and, therefore, I quote from the pertinent record from the hearing : Senator Allen. I assume, then, that if you concluded that you were unable to l)erform the mission of defending the Panama Canal you would so report to the Pentagon, would you not? General McAi liffe. Absolutely. To the Joint Chiefs of Staff. Senator Allen. Have you made any such report since you have been as- signed there? General McAuliffe. No, sir. Senator Allen. I would assume, then, that you feel that you are adequately equipped and manned to perform that mission. GeneriU McAuliffe. Again, if 1 may, Mr. Chairman, my answer is dependent upon the threat scenario. However, under the kind of threat scenarios that I see today or in the innnediate future I can tell you that I have an adequate force to carry out this defense mission. Senator Allen. Should you not be prepared for just routine defense, but for any emergency? We have seen our various bases attacked in the past by enemy nations. Should we not be able to react successfully to any conditions? General McAuliffe. I can assure you, Mr. Chairman, that we are well trained and prepared to react to any contingency. This is the general in charge of the defense of the Panama Canal in answer to the question of whether or not the canal is defensible. Just to clarify my statement about needing reinforcements, let me say that my forces are able to react and I think, do an adequate job of defending. "However, sooner or later in an emergency period, that relatively small force may be over-committed. Hopefully, within those couple of days or whatever pe- riod of time we may be talking about we might be able to bring in additional forces to help meet the requii-ement. ,So ends the portion of the testimony to which I have alluded. So, Mr. President, the canal is now defensible, but, as George Kennan points out, should this treaty be ratified, U.S. forces will more or less find themselves boxed up in small enclaves subject to terrorist attack by dissident elements in Panama and subject to the inflammatory polemic which has characterized pronouncements of the Panamanian Government and government-controlled press ever since the seizure of power by dictator Torrijos. Would such conditions present an emergency situation for which military reinforcements would l)e 178 required? Would the United States be permitted to reinforce under the provi- sions of paragraph 5, article IV of the proposed treaty ? Or would we prefer sim- ply, as suggested by Mr. Kennan, to bug out? Let us not kid ourselves, Mr. President. We do not solve a defense problem with this proposed treaty ; we create instead a nightmare with a predictable result. Mr. President, I suggest the absence of a quorum. Mr. Robert C. Byrd. Mr. President, would the distinguished Senator not suggest the absence of a quorum at this time ? Mr. Allen. Yes, I withhold my suggestion. I yield the floor. OLD SOLDIERS NEVER DIE— THEY JUST OBEY [From the Congressional Record, Sept. 21, 1977 — S15231] The Panama Canal Treaties — No. 6 Mr. Allen. Mr. President, last week I had occasion to speak from time to time on matters involving the proposed Panama Canal treaty and the proposed neu- trality treaty for the Canal Zone. In my study of the terms of both treaties, I have relied heavily on Panamanian interpretations of the various documents involved inasmuch as the Panamanian negotiators have been somewhat more candid with the Panamanian National Assembly than our own negotiators have been with the U.S. Congress. Too, Mr. President, the information we gathered as to the interpretation that the Panamanians put on these treaties is of vital concern to the Senate in reaching a determination as to whether it shall advise and give its consent to the ratifica- tion of these treaties. Because of the fact that there has been no meeting of the jniuds between the two countries, the treaties would, in effect, be completely worth- less if we had one interpretation and the Panamanians had another. I might add also, Mr. President, that the dictator-controlled Panamanian Press, in many respects, has set forth more real information on this subject than has our own press. Over the weekend, I ran across an informative editorial in a U.S. news- paper, this week's Army Times, and this editorial does deserve high commendation for its very accurate assessment of one facet of the executive department's propa- ganda offensive for ratification of these treaties. The Army Times editorial is entitled "Using the Chiefs" — having reference to the Joint Chiefs of Staff — and it points out the double standard, the inconsistency, and the impropriety of chastising military personnel on the one hand for speaking out against the policies of the executive branch yet coercing them on the other hand to speak out in favor of such policies. The editors of Army Times apparently share my own deep conviction that the professional military cannot be permitted to intervene publicly in politics and that grave danger is posed by deliberate mis- use of the military for political advantage. Army Times states its disapproval in this manner : ''One of the reservations we have about the administration merchandising of the treaty is the early use of the Joint Chiefs of Staff to promote ratification. "In addition, JCS chairman Gen. George S. Brown, supposedly on his own accord, met with ranking military retirees in the Washington area in an attempt to win their support for the treaty. "We accept the contention that the chiefs acted out of honest conviction in their protreaty effort. But their presence among political figures who are endorsing the treaty is cause for concern. Critics of the pact already are charging that the mili- tary leaders acted out of loyalty to the Commander in Chief. Brown has denied the charge but probably has not laid it to rest. "We would rather have seen the military views given in that forum instead of the White House extravaganza preceding it." I might state that while the Joint Chiefs have endorsed the treaty, four former Chiefs of Naval Operations have come out in strong opposition to the treaty, show- ing the direct contrast between those who are still on the payroll and in active military service who may have one view, but their equally distinguished col- leagues, many of them, and certainly four former Chiefs of Naval Operations, have come out against the treaty. You know, Mr. President, we have just recently been treated to the public spec- tacle of a senior military commander in Korea being summarily relieved of com- mand for remarks thought inconsistent with the executive department's apparent determination to abandon South Korea, yet almost in the same breath we have had paraded before us assorted active-duty generals and admirals, all chorusing in unison the praise of the President and endorsing to a man this strategically dis- astrous treaty proposal. The irony, at least, has not been lost on the editors of (179) 180 Army Times who see danger in this obvious politicizing of the role of the military- decisionmakers. I again quote the Army Times : "It is fair, in our view, to criticize the President for the service leader's partici- pation in the pre-debate 'education' effort." I welcome an education effort, educating the American people about these trea- ties, because the more they find out about the treaties, in my opinion, the harder and the more determined will the opposition of the American people be to the treaties. "When general officers have spoken out on other national policy matters, he and his representatives have been quick to remind them of the bounds of their military responsibilities." '"He." in this case, is the President. "In this case, however, the military leaders are showing approval of administra- tion policy, not opposition. The difference may be difficult to explain and may result in some erosion in the military's traditional political neutrality." Mr. President, I do believe that the fair and disi^assionate views of our lead- ing military officers should he considered by the Congress, but I trust the Members, will recognize the unseemliness of ballyhooing active-duty military support for the new treaties, when such support is so obviously generated by a desire for job security and personal advancement rather than out of loyalty to the national interest of the United States, at least as I perceived it. ^Ir. President, from time to time I have spoken out against these treaties, and' I have pointed out reasons for my opposition. I am going to continue, week in and week out. until this matter comes before the Senate, with the approval of the distinguished majority leader and his graciousness in getting me this time, to speak out against these treaties and to give a backlog of information showings that approval by the Senate of these treaties will be contrary to our national interest. I believe that the education process which the executive department is going to carry on in connection with trying to sell this treaty to the Senate and to the- American people will be counterproductive insofar as getting approval of the treaties is concerned; and that public opinion will be stronger and stronger, as time goes on. against the treaties. INIr. President. I ask unanimous consent that the editorial to which I referred' l)e printed in the Record. There being no objection, the editorial was ordered to be printed in the- Record, as follows : Using the Chiefs The administration's selling job on the new Panama Canal treaty has to be one* of the major political spectaculars of recent memory. While Congress was on vacation in xVugust, the President worked to rally support for the pact among legislators, key people in the former administra- tion, union leaders, governors, business peojjle and others. The signing brought more heads of foreign governments to Washington than have been here since- the last state funeral. The political activity gives the impression that the treaty is about to take- effect. In fact, it still faces Senate ratification and what amounts to House endorsement through approval of related money bills. Heated debate on the- issue is predicted. The administration's effort may be good political strategy, but it tends tO' raise questions. If the treaty — actually two treaties are involved" — is good, it may be asked, why the hard sell and why, until now. the lack of specifics? We don't pretend at this point to know whether the treaty is the best arrange- ment the U.S. can make with Panama. Senate hearings and debate should provide light as well as heat on the issues involved. But it should be evident that overwhelming pro-treaty arguments are going to have to be madr^ to per.suade lawmakers and perhaps a majority of the American public that the U.S. should relinquish its Canal rights. For many Americans the treaty surfaces at the wrong time. The IT S. has "lost" a war in Asia, and is preparing to withdraw ground combat forces from- South Korea. Negotiating away American rights on the canal comes as the final straw. One of the reservations we have about the administration merchandlsihg of the treaty is the early use of the Joint Chiefs of Staff to promote ratification.. 181 In addition, JCS chairman Gen. George S. Brown, supposedly on his own accord^ met with ranlcing military retirees in the Washington area in an attempt to win their support for the treaty. We accept the contention that the chiefs acted out of honest conviction in their protreaty effort. But their presence among political figures who are endorsing the treaty is cause for concern. Critics of the pact already are charging that the military leaders acted out of loyalty to the Commander in Chief. Brown has- denied the charge but probably has not laid it to rest. We would rather have seen the military views given in that forum instead of the White House extravaganza preceding it. It is fair, in our view, to criticize the President for the service leaders' par- ticipation in the pre-debate "education" effort. When general officers have spoken out on other national policy matters, he and his representatives have been quick to remind them of the bounds of their military responsibilities. In this case, however, the military leaders are showing approval of administra- tion policy, not opposition. The difference may be difficult to explain and may result in some erosion in the military's traditional political neutrality. TREATIES HELP PERPETUATE PRESENT DICTATORIAL REGIME [From the Congressional Record, Sept. 22, 1977 — S15319] The Panama Canal Treaties — No. 7 Mr. Allen. Mr. President, no doubt the Senate is aware by now of my very deep conviction that the proposed Panama Canal treaties are directly contrary to the national interest of the United States and the free world. This is the seventh speech I have given in the Senate since the Panama Canal Treaties were signed by the President and the Panamanian dictator. I intend to make other speeches from time to time while this matter is before the Senate and before the country, I might say, Mr. President. But, Mr. President, the more I study this matter, the more I am convinced that these proposed treaties are not even in the interest of the people of Panama. Stat- ing the matter bluntly, these treaties seem chiefly to benefit the large multina- tional banks and the elitist dictatorial regime now in power in Panama, a regime which has repressed and subjugated the people of Panama since its inception in 196S. Let us face it — dictator Torrijos and the clique surrounding him see these treaties not as a program for uplifting and improving the lot of the i)eople of Panama, but rather as a means for perpetuating their own privileged position as a ruling class. Dictator Torrijos in 1968 was an undistinguished left-leaning major in the Panamanian National Guard. Now, after a career based more on gangsterism than on military ability, he professes to hold the rank of brigadier general and is without argument titular head of one of the world's worst dictatorships. Mr. President, Freedom House, which is recognized internationally as an impar- tial monitor of the status of human freedom — and, I might add, counts Dr. Heiiry Kissinger as a member of its advisory council — rates Panama as one of the ever- growing number of nations in the world whose people are counted among the "not free." As a matter of interest, according to Freedom House, 67 nations are '"not free," 48 are '"partly free," and 42 are "free." So, Panama is in bad company, but certainly not alone. But, Mr. President, in addition to these three major categories, Freedom House further breaks down and characterizes the governments of the world by rating political rights under those governments on a scale of 1 to 7, with 7 being least free. Panama is rated 7. That is right at the bottom in the degree of freedom which the citizens of Panama enjoy or fail to enjoy under the dictator regime in Panama. Civil rights — or, if you prefer, human rights — are rated on a similar scale, and Panama receives a 6. A 7 is the worst they can possibly receive under this rating system. The sad case of the late Leopoldo Aragon is typical of the consistent pattern of gross violation of human rights by the military dictatorship in Panama. Aragon was a working journalist, an idealist, and politically a Social Democrat. Strongly anti-Communist, he had been forced to leave Czechoslovakia because of his opin- ions and was barred from virtually all socialist-Communist dominated countries. In Panama, rather than being expelled for his political activities, he was jailed summarily without trial for 15 months in Panama's infamous penal colony, Coiba — pronounced CO-E-BA. Amnesty International, the International Com- mission of Jurists, and the Human Rights Commission of the United Nations finally prevailed on Dictator Torrijos to release this journalist-idealist, who had had the audacity to suggest that Panamanians should be permitted to enjoy basic human rights on the same footing as i>eople of this country or of other free nations. Of course, Mr. President, Senators know the sad end to correspondent Aragon's life, but I question whether many Members of the Senate are aware that our own (182) 183 Department of State refused Aragon's application for a visa to enter the United States, presumably because the Department of State like dictator Torrijos, did not wish any dissent or opinion conflicting with its own view of what is best for Latin America and the Republic of Panama. I sometimes wonder where our own country would rate on the scales at Freedom House if the Department of State could impose its programs here as they are imposed abroad. To be sure, Mr. President, the Panamanian dictatorship, in the present glare of international publicity, will pay lip-service to the forms of democracy. We will be treated to the spectacle of a plebiscite by the Panamanian people allegedly in ratification of these proposed treaties, we will see demonstrations of support and even expressions of patriotic affection for this guileful gangster dictator, and some of us will be reminded of similar plebiscites and expressions of support from an- other era and on another continent. Yes, we will see the forms of democracy observed, but I trust that our own media, our own free press, will report substance and not sham. I trust, Mr. Presi- dent, that our press, being free, will recognize the hoUowness, indeed the per- versity, of a plebiscite conducted in a country with a censored and controlled news media and with a legislature hand-picked and installed by a military dictator. Perhaps Senators w^onder why the Panamanian dictator is even bothering to go through the motions of conducting a plebiscite. Some hint can be found in remarks made on August 19 in the dictator-controlled Panamanian National Assembly. So-called Representative Luis Castillo posed the following revealing question : "Mr. President, distinguished negotiators, dear comrade: I would like to ask the negotiators about the plebiscite. Since this is the means by which the Pana- manian people will ratify the treaty and is related to the ratification by the U.S. Congress, I would like to ask whether a date has been set for the plebiscite and whether it has considered that it is important for the plebiscite to be held before the U.S. Congress ratifies the treaty. The idea is that once the results of the pleb- iscite are known — and we feel sure the Panamanian people will approve the treaty by a majority — this would have an impact on the U.S. Congress." So, Mr. President, the real purpose of this plebiscite is going to be to add fuel to the propaganda fires here in the United States. The Panamanian plebiscite will have nothing whatsoever to do with the desires or interests of the Panamanian people. It will be conducted only for its impact on the U.S. Congress. Panama is a small country but the dictator and his henchmen understand our politics much better, apparently, than we understand the facts of political life in Panama. As chief negotiator, Romulo Escobar Bethancourt put the matter : "As for the U.S. Congress, there is a big problem, to be frank with you. They (the U.S. negotiators) have a big problem, worse than you can imagine . . . Why? Because the U.S. Congressman, as a good politician, acts as an instrument of those electing him. He is always aware of how the voter of the district or state that elects him feels." I might say parenthetically, Mr. President, if the Members of the Senate act according to the wishes of their constituents, in my judgment, there is no doubt whatsoever that the two treaties will be rejected by the U.S. Senate. Of course, I think that would be a most fortunate result of the treaty vote in the U.S. Senate. You see, Mr, President, this matter of elections is something of a novelty down there in Panama. Of course, Torrijos did not get there by an election. He took over in a coup. Negotiator Bethancourt had to go to some trouble to explain the whole process to the "representatives" in the National Assembly. I can almost imagine their amusement at the thought of having to take account of the views of the people. But they do have to ratify it, and that is the form that they are going through. It is absolutely meaningless. It will be 999 to 1, I dare say, in favor of the ratifi- cation of the treaty unless it would serve their best interests to show a closer vote, indicating that the treaties are not stacked in favor of Panama, which, of course, they are. But, Mr. President, one representative in this appointed National Assembly of over 400 members did voice a little opposition to the dictator's treaties. Let us see what happened to him. This is Representative Luis Emilio Veces : "I wish to clear up a point of order. * * *" This fellow seems to have the same problems with the Chair that a number of us have experienced from time to time — not the present occupant of the Chair, I hasten to add. This RepresentatlTe continues : 99-592—78 13 184 "I wisli to clear up a point of order, because the Secretary has declared that the vote was unanimous for the resolution approving the accomplishments of the Panamanian negotiators regarding the treaty." One can almost imagine the situation. Over 400 dictator-appointed assembly members shouting approval of the actions of the dictator's negotiators, yet one brave voice insisting to be recorded as an abstention. Apparently, a direct vote agamst might have been viewed as treason. Representative Veces bravely con- tinues : "I wish to explain my abstention from voting. With the indulgence of those at the presidential table, the vice president, the cabinet ministers and fellow repre- sentatives, I wish to explain that I am incapable of bregrudging the merits with which the resolution credits those abroad who have expressed their solidarity with our country. However, there is a basic issue which has caused me to abstain from voting for that resolution. It is the fact that I cannot share the pleasure of those at this meeting or the pleasure expressed by the government team today for a treaty which I have not yet seen." Apparently, they had the same problems in Panama, in this dictator-run na- tional assembly, that we had here in the U.S. Congress — the same problems in dis- covering actually what had been negotiated on behalf of our respective Govern- ments. But Representative Veces had an additional concern which caused him to abstain : "According to the national press and the government team, we have ample guarantees permitting a debate on the new treaty draft. Nevertheless, the same government team has made a series of threats of a political nature against persons who oppose the treaty." We have not had any such situation as that in this country, and I do not antici- pate that we will have any, although, of course, the President and the Depart- ment of State are conducting what they call an educational campaign. I believe the more people are educated, though, on this question, the more against the treaty they are going to be. If there is any retaliation, it will not be on the part of the executive department, I am sure. If there is any at all against those who vote for the treaty, it will be by the voters back home, in my judgment. Says Repre- sentative Veces : "I wish to state clearly that in such a situation it would appear that we are left only to take it or leave it." We shall not have that situation here. We shall have an opportunity to amend the treaty. If we amend it successfully in a basic and fundamental way. that will have the effect of killing the treaty, because it would then have to be renego- tiated. I am hopeful that we will be able to amend it. For instance, one section, aside from the major question of whether we ought to give the canal away, one article says that, during the 23-year period of the treaty, the United States will not negotiate with any other nation regarding another Isthmian Canal. There has been suggested a route through Nicaragua. The House, at one time, back around 1903, favored and passed a resolution to that effect, for the Nicaraguan route. But under the treaty, we will not be able even to negotiate with another nation for another sea-level canal without the per- mission of Panama. Of course, they are not going to give their permission, because the Panama Canal would he a great asset. Certainly, that ought to be knocked out of the treaty, and many other pro- visions, as well, should be knocked out, assuming that the treaty is going to be ratified in some form, which I oppose. The similarities between the Panamanian Assembly and our own Congress are sometimes startling. Veces continues : "I am also worried about a number of ideas being expressed, such as that those who oppose the government or the treaty are traitors to the fatherland." That was stated down in Panama, not here, because no one goes that far. "There are ideas which given the pretense that there is a democratic atmos- phere, constitute a threat for anyone in this country who has the power to reason." Certainly, that same situation would apply here. Those of us who have the power to reason and who can point out the defects in this treaty and the in- advisability of going ahead with it certainly are held up to some degree of — vilification possibly is too strong a word, but some degree of ridicule in the media. Representative Veces seems to be seeking to discover the limits of permissible dissent, and negotiator Bethancourt advises him in this fashion. Here is the propaganda line they are handing out in Panama — 185 "Any person who during the debate objects to the approval of the treaties because Torrijos is a dictator will receive our reply explaining why we do not consider Torrijos a dictator, and in addition we will reprimand that person." So they do not have much freedom of speech down there in Panama. "That will be the debate, at whatever level people choose to engage in it. but whoever decides to enter the debate should know that he will get a reply." The reply that they are suggesting is not too favorable to any dissenters' life and health. Veces got his answer, and I am sure he got with it the clear message it carried'. The following facts certainly portend great danger to our use of the Panama Canal. Mr. President, on July 19, a Soviet delegation in Panama negotiated an agreement with Panama which included the following points — construction of a major heavy equipment repair facility in Panama for use by the Soviet Union ; permission for the Soviet Union to take advantage of the tariff "free zone" at Colon for Soviet merchandise ; establishment of Soviet installations at France Field, formerly a U.S. Air Force base; and informally, a commitment to allow construction of a Soviet hydroelectric plant and oil storage facilities. Moving in very rapidly, Mr. President. Against that background, I question seriously the judgment of those who would urge the Congress to support treaties which will prop up and perpetuate a military regime whose leader oppresses his own countrymen and seems bent on forging an alliance with the world's bloodiest and most tyrannical imperial power. These treaties are clearly not in the best interest of tlie United States or the free world. Since they will tend to darken and prolong the night of tyranny and oppression in Panama, neither are they in the best interest of the Panamanian people. Mr. Sparkmax. Will the Senator yield? Mr. Allen. I am delighted to yield to my colleague. Mr. Sparkmax. Speaking of those early discussions and particularly the proposal for a sea-level route through Nicaragua, I want to call to the Senator's attention that his predecessor and mine many years ago. Senator John T. Morgan, was one of the great advocates of the sea-level route through Nicaragua. I have often thought it would have been a great blessing had that gone through. Mr. Allen. Yes. The Acting President pro tempore. The time of the Senator from Alabama has expired. Mr. Allen. Mr. President, I ask unanimous consent for 2 additional minutes. The Acting President pro tempore. Is there objection? Without objection, it is so ordered. Mr. Allen. The Senator already has been called, as the distinguished Senator knows, the father of the Panama Canal. Mr. Sparkman. Correct. Mr. Allen. He had advocated the Nicaragua route. The House of Representatives passed the resolution calling for the Nicaraguan route in working out a treaty with them and in the Senate. Tliey only changed in the resolution substituting Panama for Nicaragua. Senator Morgan, though he for decades advocated the Nicaraguan route, was so interested in the Isthmian Canal, he urged his friends in the House not to make any effort to go back to Nicaragua, not to have a conference, and they accepted the Senate amendment. Certainly, it is a great tribute to Senator John T. Morgan that he was willing to sacrifice his own notions of where it ought to go in order to achieve the objective of getting the Isthmian Canal. Mr. Sparkman. While we are reminiscing, I would like to recall that one of the great men in Panama during those days was an Alabaman. Gen. Killiam C. Gorgas, who cleared it of yellow fever. Mr. Allen. That is correct. Also, Gen. William L. Sibert of Alabama. Mr. Sparkman. A corps engineer. Mr. Allen. He did not get the credit, but he was actually the engineer in charge of the construction. Mr. Sparkman, The Senator is correct. Mr. President, may I be recognized in my own right since the time is up? The Acting President pro tempore. Does the Senator make a unanimous- consent request to be recognized? Mr. Sparkman. I ask unanimous consent that my colleague's time be extended- Mr. Allen. Three minutes. 186 Mr. Spakkman. For 3 minutes. The Acting President pro tempore. Without objection, it is so ordered. The time of the Senator is extended for 3 minutes. Mr. Allen. I yield to the Senator. Mr. Sparkman. Mr. President, of course, my colleague realizes that these treaties are coming before us. Mr. Allen. Yes. Mr. Sparkman. I had printed in the Record sometime back a rather detailed annoimcement on the hearings. The Senator recognizes that I am chairman of that committee. Mr. Allen. The very distinguished chairman, I might say. Mr. Sparkman. I shall do my best to preside, shall I say on a nonpartisan basis. Mr. Allen. I know that the Senator will. Mr. Sparkman. I believe we do have a wonderful parade of witnesses that are coming before us. Mr, Allen. I might say while the Senator is looking for his paper that I have requested time before the committee and the distinguished Senator has cer- tainly graciously stated I would have that time to speak or testify in opposition to the treaties. Mr. Sparkman. Mr. President, I would like to refer to the notice that I put in the Record. First, we are going to open these hearings on the 26th. I will be presiding and not supporting either side. Mr. Allen. I understand. Mr. Sparkman. I am going to be presiding officer. We do have a very fine schedule of witnesses. It will probably run about 2 weeks, I should think, and maybe longer than that. We do not look forward to presenting the treaties — there are two treaties — to the Senate until we are back here the first of the year. I believe that is what Senator Robert O. Byrd has scheduled. Mr. Allen. That is correct. Mr. Sparkman. But we are going to start off with our negotiators. Ambassa- • dor Bunker and Ambassador Linowitz. ' I have tremendous respect for both of them. I believe they did yeoman work down there. We expect to hear from them first. Then we are going to hear from the Defense people because they are vitally concerned in this matter. Then we will hear from some of our former Secretaries of State, Secretary Kissinger and Secretary Rusk are particularly mentioned. I think we have a very fine selection. Furthermore, we are not going to try to rush these hearings. We are going to give an opportunity to as many as we possibly can — that will include Mem- bers of both Houses of Congress, it will include the military, it will include interested citizens and others. We plan to give as broad a hearing as we possibly can. Mr. Allen. I know that. Mr. Sparkman. I want to assure the Senator of that. Mr. Allen. I know he will be eminently fair and give all sides an opportunity to be heard. I do not know any Member that I would rather see chair these hearings than my distinguished senior colleague from Alabama (Mr. Spark- man). I know it will be a fair hearing. He has outlined those who will testify on behalf of the treaty. I am sure he will be just as fair in giving an opportunity to those of us who oppose the treaty to be heard. I have full confidence in the Senator's handling of the hearing. TREATIES DESIGNED TO PREVENT PANAMA FROM DE- FAULTING ON TREMENDOUS LOANS OWED MULTINA- TIONAL BANKS [From the Congressional Record, Sept. 27, 1977 — S15€79] The Panama Canal Treaties — No. 8 Mr. Allen. Mr. President, on Friday, September 16, 1977, I discussed in some detail the major cash benefits which would flow to the Government of Panama should the Senate ratify the proposed Panama Canal Treaty. I relied heavily on an analysis of treaty benefits by the Panamanian Planning and Economic Policy Minister, Nicolas Ardito Barletta, given on August 19, 1977, to the National Assembly of Panama in Panama City. Minister Barletta stated to the National Assembly that cash benefits accruing to Panama under the treaty would total some $2,262 billion in 1977 dollars, for an average annual payment of approxi- mately $100 million, during the term of the proposed treaties. The major treaty I have reference to would turn full control of the canal over to Panama in the year 2000. At tlie time I made my remarks on Minister Barletta's analysis of the expected cash flow from the proposed treaty, I advised the Senate that I would subse- quently discuss the relationship of this projected cash flow to the enormous loans which have been made by the large multinational banks to Panama and which are in danger of default. The fact is, Mr. President, that the treaty income that the military dictatorship in Panama hopes to extract from U.S. taxpayers and from the users of the canal would be spent not to upgrade the position of the Panamanian worker, but rather to refinance or pay off these existing tre- mendous debts owed to the big international banks. Some time ago, at my request, the Economics Division at the Library of Con- gress researched the claims of the foreign and domestic branches of U.S. banks against Panamanian borrowers. The Library of Congress reported an astonishing total of $2.77 billion in claims on Panama by U.S. banks and their foreign branches alone, and I should point out, Mr. President, that this $2.77 billion in claims does not — does not — take into account similar claims by major European and Japanese multinational lenders. To be sure, much Panamanian borrowing is in the private sector — no doubt also substantial personal loans have been extended to members of the elitist Panamanian regime — but of U.S. total claims of $2.77 billion, a minimum of $1.4085 billion is public sector borrowing, and I am reliably advised that this figure has grown over recent months to a conservatively estimated $1.7 billion in public sector borrowing. How did Panama raise this kind of cash? What collateral was pledged for this enormous debt? A clue is found in a particularly perceptive passage from the recent staff report of the Committee on Foreign Relations entitled "International Debt, the Banks, and U.S. Foreign Policy." I quote : "The question arises of how prudent the banks have been in their lending, how thorough their assessment of the credit worthiness of individual borrowers. In light of the general lack of accurate data on the external debt situation of many countries, it is hard to see how their evaluations of sovereign risk can be very precise. Has the profitability of this activity blinded them to the underlying risks? Or has the banks' willingness to lend to foreign countries for balance of payments purposes been premised on the unstated assumption that in the event of a real debt repayment crisis, the governments of the wealthy industrial coun- tries will have to come to the rescue because they cannot afford to see either the debtor countries or their own large banking institutions go under?" In my judgment, the answers to the questions posed should be obvious to us all. So, Mr. President, although it is virtually impossible to obtain completely accurate data on the debt position of the Government of Panama, a fact recog- (187) 188 nized by the Foreign Relations staff report, my own study of this matter con- vinces me that Panama is in tlie midst of a serious financial crisis, if not on the brink of bankruptcy. This pending insolvency of Panama should be especially obvious to the big U.S. banks which are clearly overlent to Panama, and indeed the multinational banks must all see the clear danger that the Government of Panama could soon default on very substantial loans now coming due — unless, of course, the U.S. taxpayer puts up the cash or unless the Panama Canal, with its substantial revenues, is handed over. We are, in this case, being asked to do both. As I said, Mr. President, the multinational bankers like to shroud their affairs in a cloud of mystery, making it accordingly quite difficult to keep tabs on inter- national banking transactions, but again, the Panamanians have helpfully sup- plied us with a memorandum from Minister Barletta to the President of Panama, Demetrio B. Lakas — Mr. Torrijos is the dictator, but they do have a nominal President, Mr. Lakas — in which financial perspectives for Panama for li)77 are outlined in grim, but presumably accurate, detail. Minister Barletta advises Presi- dent Lakas that commitments of an obligatory nature in the Panamanian luulget include : ' Between B/42.3 million — " A Balboa is the equivalent of the dollar in Panama. It has the same value as the American dollar. It is tied to the American dollar. '"Between B/42.3 million to B/42.7 million for servicing the foreign debt which will increase from between B/87.5 million to B/129.S million or B/130.2 million in 1977. depending on whether or not the economy recuperates during the last semester. Interest will increase from between B/24.8 million or B/25.2 million, depending on the above observation, while the amortizations will be increased by B/17.5 million. Due to the tendency required to service the foreign debt, its ratio in respect to current revenue increases from 29.6 percent to between 8S.2 percent and 39 percent which significantly deteriorates our capacity for further indebtedness." That is Minister Barletta advising President Lakas of Panama. If we in this country pay some $42 billion in interest on our national debt, it is only approximately 10 i^ercent of our current Federal income. The interest on the Panamanian debt is going to jump up to about 38 or 39 percent of their total revenue. So we see the horrible financial straits they are in. The only thing that can save them and, secondarily, the big international banks is to have this Pan- ama Canal Treaty approved. I do not believe it is in the interest of the American taxpayer to hand over the canal to Panama in order that they can pay back the international banks. Mr. President, these figures are truly incredible. This small country of 1.7 million people is already obligating up to 39 percent of its current revenues to foreign debt service. These multinational banks have got their hooks into Panama pretty solidly, and one can well imagine the dilemma facing the Government of Panama and can certainly understand the Panamanian dictator's frantic desire to shake down the Panama Canal Company for quiet money to satisfy these international bankers. But, Mr. President, Minister Barletta's memorandum to President Lakas con- tains other information which ought to be carefully considered by the Senate. Minister Barletta states : ''The global (annual) deficit (of Panama) will be between B/131.9 million and B/138.7 million, depending on how well the economy recuperates during the sec- ond semester of 1977. To finance this deficit we will require B/l.'.G million from the Venezuelan Investment Fund, B/5 million in Internal Bonds, and from B/111.3 million to B/118.7 million from the private banks." So we can .see the desperate straits that Panama is in. Mr. President, I do not know whether this latest B/118.7 million from the pri- vate banks has yet been obtained, but I understand that a consortium of banks did extend an additional $150 million in loans to Panama about the time it be- came obvious that the executive department of the United States was serious about pres.slng for the conclusion of a proposed treaty and a cash bailout of the Government of Panama. So one of the chief parties in interest in this whole proceeding is the group of international banks. They stand to gain by this more than anybody else, possibly. Minister Barletta continues in this fashion : "We feel it will be extremely difficult to syndicate loans with the commercial banks in the amounts previously mentioned, taking into account that during the present fiscal period we must contract for a total of B/323.6 million with those 189 source.^, who in turn have become more demanding each time that an accord has to be linalized. Besides, tlie relation between servicing the debt and current rev- enues of between 3S.1) percent and 39 percent suggest a deteriorated capacity to service tliis debt and thus will increase the risk as realized by the lending institutions." We should remember, Mr. President, that these remarks are in a memorandum which predates by some months the conclusion of the proposed treaty, and I note particularly that Minister Barletta refers to commercial banks becoming '"more demanding each time that an accord has to be finalized." I do not think there should be any doubt in anyone's mind what accord Barletta has in mind. He is talking about this treaty, Mr. President. He is talking about this document signed a few weeks ago amid such fanfare down there at the OAS and at the White House. So, Mr. President, wh.at we have is a relatively small country down there of some 1.7 million inhabitants — about half the size of my native State of Alabama — a spendthrift dictatorial government, and multinational banks demanding pay- ment. Wliat we have gotten proposed to us as a solution to their problems is apparently the Panama Canal Treaty. The banks get their money, the Pana- manians get the canal, the Canal Zone, and the American people get to hold the bag. That is what the whole situation boils down to. Again, ^Ir. President, Minister Barletta expresses the problem quite succinctly : * * In short, 1977 lines up as extremely delicate due as much to current expenses increasing more than current revenues, as well as to the amount and structure of the new financing that must be contracted which reaches the limits available to the Nation as such.' Yes, 1977 does line up as an extremely delicate year for Panama and for the United States and for the big banks. But, Mr. President, the U.S. Senate cannot permit the interests of these multinational banks to outweigh the critical and special national interest of our own people. I'erhaps methods of assisting this destitute Panamanian Government should be explored, notwithstanding the repressive and repugnant character of the present dictator, but in no event should the United States give economic aid to Panama in a form which damages the security of our country and, indeed, the entire free world. If we must bail out these banks, can we not find some other method of rendering assistance? The stability of these banks, to be sure, is impor- tant to us all, but surely we ought not permit the dismantling of our own country in order to satisfy their insatiable appetite for profit. Mr. President, I ask unanimous consent that the memorandum of Minister Barlett^i, together with a related memorandum of the U.S. Embassy in Panama and two reports from the Congressional Research Service of the Library of Con- gress dated July 21. 1977. and July 28, 1977, be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows : The Library of Congress, Congressional Research Service, Washington, D.C., July 21, 1917. To : Subcommittee on Separation of Powers, Attention : Quentin Crommelin. From : Economics Division. Subject: U.S. Commercial Bank Loans to the Government of Panama. As we have discussed on the telephone, we are enclosing photocopies of different materials pertinent to the above-mentional subject. There is a statement by Henry C. AVallich, Member, Board of Governors of the Federal Reserve System, dated March 23, 1977. to the House Subcommittee on Financial Institutions of the Committee on Banking, Finance and Urban Affairs, which includes a table on claims of U.S. banks on various foreign countries, including Panama. AVe have also included a June 3, 1977 Federal Reserve press release which has tables on U.S. bank claims on selected foreign countries in 1976. Panama is in- cluded in the section on offshore banking centers on page 5 of the tables. Another source in the Federal Reserve indicated that foreign branches of U.S. banks had claims of $1,886 billion on Panama at the end of 1976, while the March 1977 Treasury Bulletin indicated that domestic oflEices of U.S. banks had $886 million in short and long-term claims against Panama as of that date. Of this amount, only 13% were long-term claims. xA.dding the two figures results in $2,772 billion in claims on Panama by U.S. banks and their foreign branches. This appears to be the number used by Governor Wallich in the attachment to his statement. 190 We are also including a photocopy of the World Debt Tables, Volume II, p. 117, which shows the external public debt position of Panama. Unfortunately, the table includes data only up through 1974. Conversation with a World Bank official revealed that 1975 and 1976 figures are in the process of compilation and some results are exi)ected by the end of next week. If you would like further assistance on this matter, please do not hesitate to contact us on 426-5750. David Hoyt, Analyst in Banking and Capital Markets. The Libeary of Congress, Congressional Research Service, Washington, D.C., July 28, 1977. To : Senate Judiciary Committee, Subcommittee on Separation of Powers. From : Economic Division. Subject : Further information on loans to Panama. As we have discussed on the telephone, we have been able to gain some further information on the availability of data on U.S. bank loans to the Government of Panama. In conversation with a Federal Reserve official, it was learned that they do not have information available which gives a distinction by type of borrower for foreign loans from U.S. banks. They do have a figure for borrowing by banks and official institutions in Panama from the head office of a U.S. bank. This figure, however, is not available over the telephone and is obtainable only ''through normal channels". Information on loans made from individual U.S. banks is, in some instances, known by the Federal Reserve, but is regarded as confidential in- formation and was not released to us. The World Bank provided us with some preliminary data on the external debt of the entire Panamanian public sector. At the end of 1975, loans outstanding and actually disbursed by foreigners to Panama totaled $767.9 million with $58.7 million accounted for by Panamanian branches or offices of private, foreign- owned banks. The corresponding figures for 1976 were $1.0909 billion and $129.4 million. The 1976 figure for Panamanian public sector borrowing, disbursed or undispersed was $1.4085 billion. David Hoyt, Analyst in Banking and Capital Markets. Memorantjm To: Eng. Demetrio B. Lakas, President of the Republic, Presidency of the Republic. From : Nicolas Ardito Barletta, Planification Minister. Matter : Financial perspectives for 1977. The purpose of this Memorandum is to call attention to the financial basis upon which will be defined the budget of 1977 thus permitting to show the pertinent limitations that are being detected in this year's budget. (a) The current revenues should increase between B/ 43.6 million and B/ 44.2 million with respect to this year's revised income figures thus reaching totals of B/ 339.7 million or B/ 333.3 billion: dependent on whether or not there is a recuperation in the economic activity during the last six months of this year. (b) The increase in current revenues assumes an economic upturn of 3 percent and an inflation rate of 5 percent throughout 1976. (c) It also assumes a B/ 21.0 million package increase of taxes which should not interfere significantly in the desired economic recuperation process. (d) The technical group involved in this evaluation has concluded that the following are the tributary measures that would fill the above requirements: A consumer tax designed in such a manner as to minimize its effect on prices and on lower income groups. This type of taxation tends to divert private expen- diture towards investments, thus stimulating economic development. Reform import duties in order to replace specific value taxes by value added duties. This measure will adjust the increase of tax income to the increased cost of imported goods, and will thus heflp to stimulate internal production. 191 Limit the tax deduction permitted on interest paid for mortgage loans used to buy homes for one's personal use. Consolidate the progressive tax structure for corporations into one tax rate in order to avoid the use of numerous companies to lower the effective tax rate. (e) At the same time, operational expenses are estimated to increase from between B/ 50.3 million and B/ 50.7 million and will reach total of B/ 340.6 million or B/ 341.0 million, depending on how the economy is reactivated during the second semester of this year. (f ) The fact that the increase in revenues will be inferior to the increase in exiDenses suggest that there will virtually be no new recourses to augment the coverage of public services. (g) The significance of the rigidity to which the new budget elaboration will be subjected will be understood when one observes that only B/ 3.1 million will cor- respond to net reincorporations of previously frozen expenditures, while the re- maining B/ 47.2 million correspond to commitments of an obligatory nature. (h) These commitments of an obligatory nature can be broken down in the following manner : (1) From between B/ 42.3 million to B/ 42.7 million for servicing the foreign debt which [servicing] will increase from between B/ 87.5 million to B/ 129.8 million or B/ 130.2 million in 1977, depending on whether or not the economy re- cuperates during the last semester. Interest will increase from between B/ 24.8 million or B/ 25.2 million, depending on the above observation, while the amor- tizations will be increased by B/ 17.5 million. Due to the tendency required to service the foreign debt, its ratio in respect to current revenue increases from 29.6 percent to between 38.2 percent and 39.0 percent which significantly deterio- rates our capacity for further indebtedness. (2) B/ 2.3 million of the amortization of salaries are for: Education — B/ 1.4 million. Health — 0.4 million. Housing — 0.1 million. Other institutions — 0.4 million. (3) B/ 1.3 million of current transferences which reflex the increase in subsidy to the National University, the payment of Balboa notes subscribed to BID and the increased consumption of water. (4) E/ 0.4 million in salary increases to : Health— 0.3 million. Government and Justice, Labor — . Presidency — 0.1 million. (5) B/ 0.3 million for the XIII the month of public functionaries. (6) B/ 0.2 million for inclusion in the MIDA budget for personnel frozen in its investment portion of said budget and for the hiring of new auditors for the Finance Ministry. (7) B/ 0.4 million in order to bolster the supply budget of the Health Ministry and other compulsory expenditures. (i) Since, for the above reasons, all other expenses must be maintained at the budgeted fiscal 1976 level, it is convenient to eliminate from the budgeting process all programmed budgeting meetings in order that the respective institutions and our analyst can dedicate the most amount of their time possible to formulate, evaluate and turn in punctually their budget by program. (j) As to the Central Government contribution towards the puMic investment program, we calculate that it will be B/ 78.0 million which represents an increase of B/ 18.0 million over B/ 60.0 million that is estimated will have been contrib- uted this year. (k) As a result, the global deficit will be between B/ 131.9 million and B/ 138.7 million, depending on how well the economy recuperates during the second semester. (1) To finance this deficit we will require B/ 15.6 million from the Venezuelan Investment Fund B/ 5.0 million in Internal Bonds, and from B/ 111.3 million to B/ 118.7 million from the private banks. (m) Thus, the amounts that must be financed as well as the amounts that must be obtained, create very concrete problems which in turn reiterate the need to increase expenses and investments only in those areas of an obligatory nature and to dedicate the most of time possible to the conscientious elaboration of a budget by programs in order to execute the largest possible amount of services Inquired by our society with the scarce resources that are available. 192 (n) On the one side, the required new financing of between B/ 131.9 million and B/ 138.7 million implies that there will be pressure on the liquidity and solvency of the National Bank which must provide the Central Government the monetary resources while the 3 previously mentioned financial operations can be formal- ized, all of which should take at least four months. During this period, the National Bank will have to recur to its lines of credit as well as to its internal reserves which have been practically saturated during the present year by having to finance the global deficit of B/ 99.3 million which in turn is between B/ 32.6 million and B/ 39.4 million less than what has been estimated for 1977. (n) On the other hand, we feel it will be extremely difiicult to syndicate loans with the commercial banks in the amounts previously mentioned, taking into account that during the present fiscal period we must contract for a total of B/ 323.6 million with those sources, who in turn have become more demanding each time than an accord has to be finalized. Besides, the relation between serv- icing the debt and current revenues of between 38.9% and 39% suggest a deteri- orated capacity to service this debt and thus will increase the risk as realized by the leading institutions. (o) In short, 1977 lines up as extremely delicate due as much to current ex- penses increasing more than current revenues, as well as to the amount and structure of the new financing that must be contracted which reaches the limits available to the Nation as such. (p) As a result of the above, I respectfully request your backing in eliminating the budgeting meetings and in demanding from the institutions that they pay the most attention to formulating and elaborating a budget by program. Also, I ratify the need for you to back the approval and execution of the taxing measures that we have presented for your consideration, once that we have finalized the perti- nent studies. With my highest consideration and appreciation. Exhibit 4 (Sent by United States Embassy in Panama to the State Department on Oct. 26, 1970) Tags : ECON, EFIN. Subject : Panama's recession is structural — a result of low productivity. 1. This message is part of a continuing series of mission economic studies of the State of the Panamanian economy and projections for its future. 2. Summary : Panama's recession, which deepened during the first half of 1976, is neither cyclical nor primarily a product of economic conditions outside Pan- ama. In our view the economy is floundering mainly because its high cost output is not competitive in the world market and few opportunities exist for availaltle private investment. To establish a basis for renewed sustainable growth will require actions that lead to lower costs and improved productivity. These could include easing the labor code, reducing subsidies, boosting domestic savings, and directing resource flows more toward the international service sector where Panama has natural advantages, however, most such actions would cut back social benefits granted to the working classes under the "revolution", and might not be politically acceptable under the present government, inflows of foreign capital have not been getting at the core problem of high costs (low productivity) . Lack of access to relevant Canal Zone sites is delaying GOP development of infra- structure which is prerequisite to the growth of various commercial services industries by the Panamanian private sector. End summary. 3. Economic conditions in I'anama worsened steadily during the 1976 first half. There were decreases from a year ago in key indicators — manufacturing, con- struction, external trade, unemployment, (increase), and sales to the Canal Zone (see reftel), overall growth is likely to be near zero for 1976. 4. Failure of the economy to respond to a variety of stimulants indicates that the recession is more than a cyclical maladjustment. Credit has remained rela- tively plentiful, with preferential rates available from the government for both agricultural and industrial projects. There are tax subsidies for new ex-ports, and tax benefits for reinvested profits. No basic changes have been made in the "rules of the game" under which business operates, such as the labor code or tax laws, since before the onset of recession, in fact, the GOP in recent months has actively sought by various direct means to impi'ove the business climate. A large 193 boost in 1975 public sector spending had little effect on either private investment or aggregate demand. 5. Also, Panamanian economic problems do not seem to be caused primarily by worldwide economic trends or world trade. In contrast to Panama's continuing decline, other developing countries (LDC's) have been experiencing a quickening economic tempo so far this year in response to rapid recovery by the industrial- ized countries, plus some correction of structural maladjustments, LDC exports have been generally increasing as a part of the market improvement in 1976 first half world trade (plus 10 percent) while the value of Panamanian exports remained at its 1975 level (excluding an abnormal decline in petroleum products exports), changes in Panama's economy also differed from the worldwide pat- tern both during the 1974-75 world recession and the years immediately preced- ing it. Despite sharp 1974-75 recession among the industrialized countries (zero growth), LDC's gross domestic product (GDP) increased 5.5 percent in 1974 and 1.7 percent in 1975. Growth had begun tapering off in 1971 whereas during 1971-73 the rest of tlie world including Latin America experienced unprecedented boom. 6. Private investment in Panama reached a peak in 1971. Growth in manufac- turing began to fall off in 1971 with a decline in the number of attractive import substitution possibilities, little increase has subsequently taken place in the vol- ume of manufactured exports, output of both construction materials and inter- mediate goods stopped expending in 1973. Expansion of construction activity began slowing in 1972 and has actually been declining since 1974. Imposition of rent controls in 1973 brought private investment in low cost housing to a stand- still. On the other hand, growth of the important services sector remained near 8 percent annually through 1974 (plus 3 percent in 1975) due in part to the major expansion of the foreign banking sector since 1971, growth in agricultural out- put has remained sluggish since 1970, at about 3 percent annually, much slower than during the 19()0*s. 7. Panama's basic economic weakness in our view and the reason behind current stagnation is its non-competitiveness in the world market — a structural problem involving primarily high cost production (coupled with a lack of re- sources) in both agriculture and industry. The export potential for Panamanian agriculture is extremely limited at present, the main export, bananas, is in the hands of foreign plantation operators, and has probably reached its peak in an increasingly competitive world market. In general land is of poor quality and farm labor costs are high — the $3 per day minimum wage is estimated to be at least double the rate anywhere else in Central America. The government encour- ages high cost production, including rice, the principal crop, by subsidizing producers through support prices typically set above the world market. Thus, Panama cannot profitably export major crops such as rice and corn and is further precluded from developing any profitable export potential for various lesser crops by the small domestic market base in Panama. Accessible forests have been cut over and there is little potential for meat exports while access to the U.S. market is restricted. Panama's sugar industry is likewise non-competitive due to high costs of both cane production and refining operations. 8. As with agriculture, Panama's manufacturing industry currently has little export or overall growth potential because of high production costs coupled with a dearth of natural resources (copper deposits have not yet been determined to be economically exploitable). Minimum wages and the general wage and bene- fit structure in Panama are estimated to be the highest in Central America and among the highest in all Latin America. Higher wages and benefits in the Canal Zone exert upward pressure on wages in the republic as employers compete for the generally better qualified workers attracted by Zone wages. The dominance of the service sector in Panama's central urban areas with its higher skill levels also creates upward pressure on the entire wage and benefit structure. Employee benefits under Panama's labor code add to direct employment costs. The code exerts indirect pressures on costs through subsidies such as firing restructions imposed on employers and, by strengthening the trade union movement, bolsters the trend toward costlier contract settlements. High labor costs encourage the substitution of capital for labor, thus boosting structural unemployment through- out the economy. Also, relative capital costs — mostly foreign sourced — are likely to rise as Panama's already high debt service burden worsens and the economic outlook for other LDC's improves relative to Panama. 9. Establishing the basis for renewed growth and improved economic well being that can be sustained will require actions that lead to a lower cost struc- ture. One widely discussed possibility is an easing of the labor code, all hough 194 its real impact on costs remains uncertain (it did not bring on recession although it may have stood in the way of needed private sector adjustments). Changes probably would not induce an immediate surge of private investment, however, the business community has made clear its conviction that changes are essential, giving them an additional psychological importance that bears importantly on the general investment climate. Changes might be a convincing sign of GOP concern over the private sector's economic plight. 10. Appropriate belt tightening also could include lowering subsidies as well as the wage/benefit structure to reduce relative production costs, and increasing personal taxes to curb consumption (particularly imports) and expand domestic savings. These effects are usually achieved indirectly by currency devaluation. Since Panama's currency is the U.S. dollar, such actions must be taken directly ; in addition, resources may need to be more heavily concentrated in the interna- tionally-based services sector where Panama has more natural advantiiges, with proportionately less in agriculture and the nonproductive social sectors. 11. Comments : (A) Panama's high wages, subsidies, and consumer imports — together with a moderate tax burden and little public saving — permit a standard of living which no longer appears to be supportable by Panama's inefficient domestic production. (B) Increased external financial flows per se, regardless of concessionality, permit Panama to defer grappling with the core problem of low productivity until a later date when the problem will probably have worsened, unless such financing bears specifically on some aspect of costs. Indeed, much of the capital inflow of the past three years has aggravated Panama's economic malaise by exacerbating its debt service burden without enhancing overall productivity. Moreover, total inflows greatly exceeded the current account deficit of Panama's balance of payments, resulting in large negative "errors and omissions" (around $100 million annually) most of which probably represented outflows of domes- tically-owned capital. (C) The types of actions mentioned above for addressing Panama's high cost structure run headlong into the "revolution" — the social and economic benefits granted to the urban and rural working classes over the past eight years which would need to be reversed in part — in short, the "revolution" has collided with growth and one or the other must yield ; whether or not actions of sufficient scope to be economically meaningful along the above lines are politically possible for the present government is questionable. (D) Panama's best economic prospects lie in the development of its potential as a sub for servicing international commerce, various aspects of cargo handling are an essential part of the picture. Thus, the GOP has a valid case in urging early access to relevant canal zone sites needed to develop the infrastructure on which growth of various transport, storage and other commercial services depend. UNAVOIDABLE ADVERSE ENVIRONMENTAL IMPACT OF PROPOSED TREATIES [From the Congressional Record, Sept. 28, 1977— S15797] The Panama Canal Treaties — Xo. 9 Mr. Allen. Mr. President, when I first initiated this series of speeches on the proposed Panama Canal Treaty and on the proposed so-called neutrality treaty — and this is the ninth speech in the series — I had some concern that my speeches might tend to become redundant, inasmuch as apparently these proposed treaties will not be presented to the Senate for some months; but, Mr. President, the more I study these proposed treaties, the more defects I discover and the more I realize that I \sdll be at no loss for topics to discuss over the coming weeks and months. I have no desire to bore the Members of the Senate with redundancy, so I will on each occasion discuss a separate aspect of the proposed treaties in a manner which I sincerely desire to be illuminating and informative rather than repetitive. Today, Mr. President, I intend to discuss the environmental impact of the new treaty. We hear a lot in Congress about the environmental impact, and we have en- vironmental impact statements for almost everything. This new treaty has an environmental impact. Let us study it a little bit. I will use as the basis for my remarks the draft environmental impact state- ment for the new Panama Canal Treaty prepared by the Department of State and published on August 30, 1977. That is a new publication. This proixxsed environmental impact statement is now open for comment, and I would encourage anyone wishing to comment thereon to correspond with the Office of Environ- mental Affairs in room 7820 at the oflaces of the Department of State here in Washington. There is much to be learned from this draft environmental impact statement which cannot be learned from a cursory reading of the proposed treaty itself. And incidentally, Mr. President, this draft statement applies only to the pro- posed Panama Canal Treaty and does not apply to the proposed neutrality treaty. Presumably a draft statement on the proposed neutrality treaty will also soon be forthcoming. As I said, Mr. President, much can be learned about the proposed canal treaty from this draft environment statement, and although obviously the Department of State is lobbying heavily and heartily for ratification of this treaty, neverthe- less, the author of this draft statement should be commended for his candor in stating at least some of the more obvious environmental problems which are likely to ensue if the proposed canal treaty is ratified. Under the heading "Unavoidable Adverse Impacts," the statement reads as follows : "The principal unavoidable adverse impact resulting from actions under the proposed Treaty will be the loss of jobs of certain American and non-American employees of the Canal Company and the Canal Zone Government. There are also two other possible adverse impacts : increase in Canal tolls with a consequent increase in transcontinental rail traffic in the U.S. (section III B. 7.) ; and exten- sive deforestation in the Canal Zone, if protective measures are inadequate." The environmental statement then proceeds to discuss in some 100 pages or more the details of this sobering conclusion. The statement further considers major alternatives to the proposed treaty including, "taking no action on the proposed treaty." I do not favor that. I want to take action, up and down action, against giving advice and consent to the ratification of the treaty. Then, it states, "postponing further action on the treaty, implementing the treaty's provisions (including those on environmental protection), and the pos- sibility of a new treaty with stronger environmental safeguards." (195 > 196 Mr. President, I doubt if there is ever going to be another treaty. I believe this one will be defeated so badly that they are not going to come back with another treaty. I believe, too, that substantial amendments must be made to this treaty. Some definitely must be made in the area which forbids us to even negotiate with another nation for a sea level canal for this 23-year period without the consent of Panama. That must be changed. Then there has to be an amendment giving us the right to determine whether the neutrality of the canal is in danger and giving us the right to send in troops. The failure to give us priority on our warships going through the canal is amended. Once these amendments are made, Mr. President, it is treaty law that the treaty would become a nullity and would have to be renegotiated and submitted again as a treaty ab initio. I want to see an up and down vote defeating this treaty. Before we have that up and down vote, I want to see substantial amendments offered. One amendment I am going to offer, Mr. President, and I would be willing to vote for the treaty if this amendment is made, would be to raise the annuity that Panama receives from the Panama Canal Company out of the tolls, to raise it substantially — and it is around $2.3 million now — and leave all other provisions of the present treaty in full force and effect. That is, that we would continue to have sovereignty over the Canal Zone ; that we would continue to have the power to operate and maintain the canal, and that we would continue to have the right to defend the canal. Another thing we are certainly going to have to amend is the American pres- ence we have there. I believe under the treaty and executive agreements, we are supposed to cut down our bases there from 14 to 4. That wdll have to be changed. The whole treaty will have to be redrafted by the Senate, in my judgment, which would be another way of saying it is dead because it would then have to be renegotiated. The reservations are not going to do any good, mere reservations. That is merely a unilateral statement of how we interpret the treaty. It would not be binding on Panama, as I see it. It is not suflScient to say, "We make the reserva- tion, that we feel the treaty means" this. That is not worth anything. We have to amend the treaty in the particulars I am talking about. Then to be absolutely safe, not only amend it but then defeat it after it has been amended as best we can. As I say, I would be willing to substantially raise the amount of the tolls which Panama receives, the amount of annuity payments Panama receives, be- cause I know they need the money, possibly raising the figure tenfold. That would not shock me. We could raise it up to $25 million annually, provided all of the provisions of the present treaty remain in full force and effect. Mr. President, how much time have I remaining? The Acting President pro tempore. The Senator from Alabama has 5 minutes remaining. Mr. Allen. I thank the Chair. So, Mr. President, as far as the OflSce of Environmental Affairs at the Depart- ment of State is concerned this matter is still open to discussion — but, I might add, a limited amount of discussion inasmuch as the 30 days for comment will expire on September 30. In other words — the day after tomorrow, I would like to make my comments on the environmental impact of this treaty now, and I do feel after reviewing the draft environmental statement that the proposed new treaty will have adverse environmental impact suflScient to warrant rejection of the treaty in its present form unless substantially amended to include stronger environmental safeguards. Let me get back to the subject from which I digressed a moment ago. As I stated, if this is a substantial amendment to the treaty that would vitiate and nullify the treaty because it would not be sufl5cient then for Panama to accept the treaty in its amended form we would have to renegotiate and submit a new treaty to the Senate. We would have to go through the same process that this present treaty has gone through or is going through. But the value of the amendments would be that it would be a guideline, Mr. President, to what the Senate w^ould probably accept in the subsequent negotia- tions between the two countries having to do with a Panama Canal Treaty. So if we amend this treaty in these substantial forms that I have suggested, even though that would nullify and hold for naught the entire treaty, it would serve 197 as a guideline for the negotiators to have a treaty that would be acceptable to the Senate. In my judgment, Senators should listen carefully to the recommendations of environmental groups and consumer groups and business groups in assessing the unavoidable adverse impacts of the proposed treaty in its present form on the environment, the rate of inflation, unemployment, and commerce generally. Chief among the immediate adverse environmental impacts of the proposed canal treaty will be the short-term use and deforestation of the land in the Canal Zone turned over to the Panamanians. In considering this problem, the environmental impact statement reads as follows : "Short-term use of the forest resources in Panama involves slash and burn practices by squatters to clear fields for corn and other crops. Given population pressures and rural poverty, these subsistence crops are very important to the nutrition and welfare of the numerous squatters engaged in these practices. This is the reason for the widespread deforestation around the Canal Zone and the threat to the Zone's forests. However, within a year or two the soil is exhausted, the squatters move on to new forest areas, and erosion sets in with resultant damage to the entire ecosystem of the Canal watershed. Wildlife dis- appears, reforestation is diflEicult or impossible, and silting of the Canal may increase. Over the the longer term and in combination with droughts, the level of the lakes may even diminish to the point of limiting the operation of the Canal and the Panama City water supply. Archeological sites and artifacts exposed during cultivation may also be lost." There is, therefore, Mr. President, apparently some considerable concern that once the zone is thrown open to the Panamanians, Panamanian farmers will rapidly deplete the natural forest resources of the zone. This concern is ex- pressed under the heading "Irreversible and Irretrievable Commitments of Re- sources" in the following fashion : "If the environmental protection measures in the draft treaty and the supple- mentary watershed management project should prove ineffective, the forests and associated ecosystem in the Canal Zone could disappear." We are trusting an awful lot to chance, Mr. President, if even the Department of State recognizes the danger that the forests and associated ecosystem in the Canal Zone could disappear and presumably be ruined for the foreseeable fu- ture — that is if, of course, this proposed treaty is in fact ratified. Other considerations which come to light are the various laws, regulations, and policies now in force in the Canal Zone which would be supplanted by Pan- amanian law, regulations, and policies affecting environmental matters, if any. Among the U.S. laws which would apparently cease to operate after implementa- tion of the treaty are the following : 1. National Environmental Policy Act of 1969 (NEPA). 2. Section 311, Federal Water Pollution Control Act of 1972 (FWPCA) regulat- ing the discharge of oil and other hazardous substances into the navigable waters of the U.S. 3. Section 312, FWPCA regulating marine sanitation devices. 4. Marine Protection, Research and Sanctuaries Act (Ocean Dumping Act). 5. Section 4, Noise Control Act. 6. Executive Order 11514. 7. Occupational Safety and Health Act (OSHA) where it regulates the en- vironment. 8. Environmental Control Policy for Canal Agencies (published in Federal Register Vol. 37, No. 204, October 20, 1972). 9. Guidelines for the Preparation and Coordination of Environmental Impact Statements for Canal Agencies, dated December 15, 1972. 10. Title 35, Code of Federal Regulations (CFR) : a. Chapter 1, Part 61 Health Sanitation and Quarantine (includes controls on use of pesticides, herbicides, and rodenticides) . b. Chapter 1, Part 103.21 Precautions against sparks, smoke, etc. from vessels. c. Chapter 1, Part 103.22 Vessels at Fuel Berths. d. Chapter 1, Part 113, Subparts B, C and D : Handling Explosives, Hazardous Liquid Cargos and other Hazardous Materials (noxious chemicals, radioactive materials ) . e. Chapter 1, Part 125, Sanitary Requirements : Vessel Wastes, Garbage, Bal- last. 11. Canal Zone Administration and Regulations (CZAR) : 198 a. Chapter 5, Part 167.111 : Transporting Explosives, Flammable Liquid and Liquefied Petroleum Gases. b. Chapter 5, Part 167.85 : Mufflers ; prevention of noise. 12. Regulations Governing the Storage and Handling of Petroleum Products in Bulk at Canal Zone Terminals. (This document has a different primary purpose but a major environmental secondary effect. ) The above list is not exhaustive and regardless of efforts to guarantee ade- quate environmental safeguards under the proposed treaty, I doubt that the measure of protection now afforded by U.S. law could ever be achieved in any arrangement with the Panamanians which included supplanting U.S. legal juris- diction with Panamanian jurisdiction. Tab F. of the draft environmental impact statement is a study entitled, "En- vironmental Assessment of Proposals to Increase Tolls." You know, Mr. Presi- dent, a major consideration in the proposed treaty is the increase in tolls pro- posed in order to cover promised payments to the near-bankrupt Government of Panama. But what effect will this increase in tolls have on commerce with the United States and on prices charged to consumers in the United States? Well, Mr. President, the effect is not going to be salutory. The author of this study on the proposal to increase tolls, William Whitman of Kensington, Md. — and, I might add parenthetically that his study has been approved by the Canal Zone Environmental Quality Committee — Mr. Whitman's study is based on projected traffic through the Panama Canal in 1985 and as- sumes no increase above the rates in effect prior to July 8, 1974 except a 50 percent across-the-board increase in those rates. In fact, Mr. President, two in- creases have occurred since that time and a major jump in toll rates is still en- visioned by the proposed treaty. Yet even discounting the two toll increases which we have already seen, Mr. Whitman finds the following unavoidable environmental effects : "A minimal increase in air pollutants over the United States; and an unquantifiable loss of employment and employment benefits in U.S. Atlantic ix)rts." These environmental impacts are unavoidable effects of the toll increases which have already occurred and do not even take into ac- count to any significant degree the major new increases which we are being asked to ratify in this proposed treaty. You see, Mr. President, when these tolls go up, the inevitable effect is going to be to burden ocean-borne commerce and, as a result, to inflate the costs of basic raw materials shipped through the canal. Those materials will either be shipped at a higher cost through the Isthmus of Panama or will be transported by other means, chiefly rail, with the result both of higher prices and increased atmospheric pollution. Lest there be any doubt that a toll increase could have a very serious adverse effect on U.S. commerce, I ask unanimous consent to include in the Record a table of major trade routes and tonnage carried on those routes through the Panama Canal in 1975. Mr. President, I ask unanimous consent that a table entitled "Major Trade Routes in Panama Canal Traffic" be printed in the Record. There being no objection, the table was ordered to be printed in the Record, as follows : MAJOR TRADE ROUTES IN PANAMA CANAL TRAFFIC : 1975 PC Long tons Trade route net tons cargo East Coast United States-Asia 41, 970 55, 402 Europe-Asia l.S. 77f> 10.028 Europe-West Coast United States/Canada 10. 188 10. 561 East Coast United States-West Coast South America 9.792 8,417 Europe-West Coast South America 7. 642 5. 481 United States Intercoast (including Alaska and Hawaii) 4.627 4, .386 Europe-Oceania 4. 4r?4 3. 590 East Coast United States/Canada-Oceania 4.112 4.130 East Coast Canada-Asia 3. 891 3. 461 South American Intercoastal 3. 532 4, 675 West Coast South America-West Indies 2. 474 1. 985 West Coast United States-East Coast South America 2. 277 2. 934 Subtotal 108.766 115.050 All other routes 26, 288 25, 051 Total 135. 0.-4 140, 101 199 Mr. Allen. Mr. President, this table shows pretty conclusively that the United States is quite dependent on ocean-borne commerce through the Canal Zone and that the principal beneficiary of traffic tlirough the zone is, contrary to some reports, the United iStates. But let us look at the type of commerce moving through the canal. I ask unani- mous consent that a table entitled "Panama Canal Traffic by Commodities" be printed in the Record. There being no objection, the table was ordered to be printed in the Reoord, as follows : Panama Canal traffic hy commodities^ 1975 Percent of Commodity : corj^o Coal and coke 18.8 Petroleum and products 17. 1 Orains 12. 7 Ores and metals 9. 5 Manufacturers of iron and steel 8. Nitrates, phosphates, and potash 6. 7 Miscellaneous agricultural products 5. 1 Lumber and lumber products 4. 1 Canned and refrigerated foods 3. Chemicals and petrochemicals 1. 9 Machinery and equipment 1. 8 Miscellaneous minerals 1. 7 All other 9.6 Source : Annual Report. Panama Canal Company, fiscal year 1975. Mr. Allen. Mr. President, this table shows that a substantial amount of cargo moving through the canal is energy-related or bulk shipment of raw materials re- quired in the manufacture of consumer goods here in this country. The major increases in Panama Canal tolls are bound to have a multiplier effect in raising the cost of raw materials and thereafter raising the cost of consumer goods. Mr. President, I ask unanimous consent that a third table entitled "Effect of 50 Percent Tolls Increase on Commodity Manufacturers'' be printed in the Record. There being no objection, the table was ordered to be printed in the Record, as follows : EFFECT OF 50-PERCENT TOLLS INCREASE ON COMMODITY MOVEMENTS THROUGH PANAMA CANAL IN 1985 50-percent Percent Commodity No increase increase Difference change Bananas 2,342 1,710 632 27 Iron Ore 3,300 2,508 792 24 Crude petroleum... 19,900 17,512 2,388 12 Petroleum products 13,600 11,968 1,632 12 Coal 14,000 12,450 1,540 11 Phosphates 4,700 4,277 423 9 Coarse grain and wheat 26, 237 24, 343 1, 894 7 Soybeans 12,345 11,604 741 6 Iron and steel manufactures 11,543 10,956 577 5 Sugar 6,127 5,943 184 3 Miscellaneous ores 4,655 4,562 93 2 General cargo 30,659 30,046 613 2 Cargo not affected 35, 534 35, 534 Total .„ 184,942 173,433 11,509 Mr. Allen. Mr. President, this table shows significant percentage reductions in the transportation of iron ore, crude petroleum, petroleum products, and coal through the Canal Zone if a 50-percent increase over pre-June 1974 tolls would be permitted. I want to emphasize, Mr. President, that a 50-percent increase over pre-June 1974 tolls has just about already occurred with the two increases put into effect to date. We can expect, therefore, reductions in energy products transiting the Isthmus of Panama if the further increases contemplated by the new Canal Zone Treaty are permitted. This at the very time when we are spending days here in the Senate working on legislation designed to solve energy problems. Let us not put any more burdens on the energy industry. Mr. President. Let us 99-592 — 78 14 200 not drive up the cost of coal and petroleum products by a wholly unjustified increase in Panama Canal tolls. ^ ^ . . t,. , -r There is another aspect of this environmental impact statement which I would call to the attention of the Senate and in particular to the members of the Com- mittee on Agriculture, Nutrition, and Forestry. This one item appears under the heading "United States-Japan Via Cape of Good Hope." It discusses the bulk movement of coarse grains and wheat and soybeans between New Orleans and Japan. The report reads. ^.^^ . ^-u "The distance between New Orleans and Yokohama is 9,126 miles via the Panama Canal and 15,762 miles via the Cape of Good Hope, a difference of 6,636 miles The movement of 2,635,000 tons of soybeans and coarse grains and wheat via tiie Cape of Good Hope would entail about 16 voyages by a bulk carrier of 1S3 570 deadweight tons lifting approximately 170.000 tons of cargo. Each voy- age' would require about 42.4 days and fuel consumption at 15 knots would be 101.5 tons a day." , ^ ^ ^ Senators ought to consider the possible impact on our farm exports if com- mercial shipping is diverted from the Panama Canal either because of the eco- nomics of increased tolls or because of other reasons beyond our control. Will farm exports be decreased because of a decrease in our ability to compete in world markets? Yes, in my judgment, much study should be given to the real world consequences of these proposed toll increases which have been given to us as part and parcel of this disastrous treaty, Mr. President, I ask unanimous consent that five additional tables from Mr. Whitman's study dealing with di- version of commodities from the canal route be printed at this point in the Record for easy reference by Senators and staff members. There being no objection, the tables were ordered to be printed in the Record, as follows : Rearrangement of sources and markets resulting from 50 percent tolls increase [By commodities] Long tons Commodity : ithousands) 1. Bananas 632 2. Iron ore 627 3. Petroleum 2,388 4. Petroleum products 1, 632 5. Iron and steel manufactures 195 Total 5, 474 The reaction to a tolls increase by rearranging sources and markets in effect eliminates the necessity for moving the cargo involved from one ocean to the other thereby reducing energy consumption that otherwise would be used for that purpose. Obviously, in this aspect, the effect of the proposed increase in tolls is beneficial to the environment. DIVISION OF COMMODITIES FROM PANAMA CANAL TO SUEZ OR CAPE OF GOOD HOPE RESULTING FROM 50- PERCENT INCREASE IN PANAMA CANAL TOLLS (1985) Commodity Tonnage Trade route Via General cargo 1 1,201 Europe-Japan-Australia Suez. Miscellaneous ores 93 Europe-Australia _ _ Cape of Good Hope. Iron and steel manufactures 186 Europe-Japan Suez. Phosphates 423 Africa-Japan Suez. Coal 1,540 United States-Japan Cape of Good Hope. Coarse grains and wheat 1,894 United States-Japan Cape of Good Hope. Soybeans 741 United States-Japan Cape of Good Hope. Sugar 116 Philippines-New York Cape of Good Hope. Total 6,194 » Europe-Far East and Oceania. Because of the shorter distances involved, the movements of general cargo, miscel- laneous ores, iron and steel manufactures, and phosphates, aggregating 1,315 tons, between Europe and Japan, Africa and Japan, and Europe and Australia, via Suez or the Cape of Good Hope, will result in less fuel consumption than would movement of the cargo through the Panama Canal. 201 CARGO DIVERSIONS INVOLVING VOYAGES OF DECREASED LENGTH VIA SUEZ CANAL OR CAPE OF GOOD HOPE Decreased distance on diversion Commodity Tonnage Trade route route General cargo 1 1, 201 Europe-Japan (Suez) 1, 251 Miscellaneous ores 93 Europe-Australia (Cape) 1,558 Iron and steel manufactures 186 Europe-Japan (Suez) 1,251 Phosphates 423 Africa-Japan _ 4,126 Total... 1,903 1 I ncludes 588 tons assuming full impact of cumulative increase on reefers and general cargo ships without consideration of shift of cargo to container ships and bulk carriers. DIVERSION OF CARGO TO FAR EAST MINIBRIDGE BY 50-PERCENT INCREASE IN PANAMA CANAL TOLLS (19S5) [Thousands of tons] Total Tons through Commodity : Route diverted PC Sugar : Hawaii — United States 68 5, 943 Iron and steel manufactures : Japan — United States 196 10, 966 Total 264 16, 909 Ships carrying cargo between Japan and East Coast United States ports may proceed directly from Japan to East Coast U.S. via the canal, or move from Japan to the West Coast U.S. and thence to East Coast U.S. via the canal. Cargo moving by the minibridge route moves from Japan to the West Coast U.S. by water and from there to the East Coast by rail. Movements from the East Coast U.S. to Japan follow the reverse pattern. Whether the all-water move- ment is direct between the East Coast and Japan or via intermediate West Coast ports, the shorter distance involved in the intermodal movement using rail transportation across the United States, results in a substantial saving in energy consumption in the use of that route in comparison to the all-water routes. The distance between Yokohama and New York on the all-water routes indicated is shown in the following table : Distances Yokohama to 2i'ew York on all-iuater routes 'via Panama Canal Statute Route : »i^?es Direct Yokohama-New York 11, 115 I'okohama-San Francisco 5, 267 Yokohama-Los Angeles 5, 565 San Francisco-New York 6, 058 Los Angeles-New York 5, 671 Total Yokohama-New York (via SF) 11,269 Total Yokohama-New York (\^a LA) 11,230 Source : H. O. Doc. 151, with nautical miles converted to statute miles at ratio of 1 :1.15. I yield the floor. TREATIES IF RATIFIED, COULD BE GREATLY ALTERED BY EXECUTIVE AGREEMENT WITHOUT APPROVAL OF THE SENATE [From the Congressional Record, Sept. 29, 1977 — S15889] The Panama Canal Tbeaties — No. 10 Mr. Allen. Mr. President, I appreciate the distinguished majority leader and the distinguished minority leader arranging for me to speak from time to time, at the start of the Senate hearings, on the subject of the Panama Canal treaties. This is the 10th speech I have given in the Senate on the Panama Canal treaties since the announcement was made that an agreement had been reached between our negotiators and the Panamanian negotiators, and from time to time in the future while this issue remains before the Senate I do plan, with the acquiescence and assistance of the distinguished leaders, to make speeches here in the Senate pointing out the defects, as I see them, in the Panama Canal treaties. Mr. President, I am obviously greatly troubled with the substantive provisions of the proposed Panama Canal Treaty and the proposed so-called Neutrality Treaty — ^since there are two treaties — but beyond my strong objection to the sub- stance of both treaties, I am also greatly concerned that the treaty drafters saw fit to include so much of the meat of these proposed arrangements not in the body of the treaties themselves — by the way, which is not a very voluminous docu- ment — but rather in the associated executive agreements, protocols, and minutes. We have agreements and annexes to agreements and annexes to annexes ; we have minutes ; we have exchanges of notes between the negotiators ; we have protocols, and all of these form a part of the treaties. But the catch is, Mr. President, that these executive agreements can be modified from time to time by executive agree- ment requiring no assent by the Senate. So once the treaties are approved, the provisions of the treaties can be greatly altered by executive agreement over which the Senate has no control whatsoever. I am particularly concerned, Mr. President, that the major substantive defense provisions are not actually set forth in the canal treaty in its article IV, which is entitled "Protection and Defense," but appear instead in the proposed executive agreement in implementation of article IV — which is several times as large as the entire treaties themselves. I have that in my hand. Article IV itself does not cover a complete printed page, yet the agreement in implementation of article IV is some 53 pages long excluding annexes and an additional 22 pages of agreed minutes, the minutes themselves having their own annexes. So if we are going to find out what the Panama Canal treaties really provide, we are going to have to do a whole lot of research, because it is not contained just in the body of the treaties themselves. Admittedly, some of the provisions contained in these very lengthy documents implementing this very short article IV are provisions which ought not to burden the treaty itself. But, Mr. President, much is in these additional pages which in my judgment should have been set forth in the treaty text rather than in these executive agreements. The Canal Treaty reads : "The rights of the United States of America to station, train, and move military forces within the Republic of Panama are described in the Agreement in Imple- mentation of this Article, signed this date." Mr. President, recognize that the rights that are being talked about here are rights to move, station, and train military forces within what is now the Canal Zone. By this one sentence, if ratified, the Senate would turn over entirely to the executive department all future arrangements regarding our defense rights in the Canal Zone, even during the duration of the treaty. So, Mr. President, in its present form, what does this agreement in implementa- tion of article IV now provide? Already, the executive department proposes in this executive agreement to surrender 10 out of 14 bases — we have 14 bases down there (202; 203 and we are going to surrender 10 of them right at the outset and to have our forces hemmed in at four relatively small enclaves — and I would encourage Senators, if they have not done so already, to have a look at some of these maps that are con- tained in the annexes to these executive agreements to get some idea of just how hemmed in our forces are going to be if this treaty is agreed to and implemented. But, Mr. President, beyond this immediate surrender of 10 military bases, what lies down the road? If we turn to article I of the executive agreement in imple- mentation of article IV of the canal treaty, under the heading "Definitions" is the following explanation : "Defense Sites : Those areas, and the installations within them, which the Republic of Panama by this Agreement permits the United States Forces to use for the specific purposes of the Panama Canal Treaty, and as the two Governments may otherwise agree, a list of which is set forth in paragraph (1) of Annex A of this Agreement." In other words, they can wipe it all out by subsequent agreement. So these de- fense sites are already on pretty tenuous ground. If this thing is ratified, a couple of years from now or sooner, the Department of State could agree — and they seem to be pretty agreeable with this dictator down there in Panama — the Department of State could agree that it was time to shut down another base. Would they have to come to the Senate for ratification of that decision? No. Would they go to Con- gress for permission to turn over some more U.S. property to a foreign govern- ment? Well, Mr. President, they have shown no inclination to do that with this proposal to give away virtually the entire Canal Zone, notwithstanding the Con- stitution, so I doubt congressional authorization would be sought for simply shut- ting down one more base. After all, we would have already closed down 10. I cannot understand, Mr. President, why it is thought if we have 14 bases now |-o defend the canal and Canal Zone, why 4 would be sufiicient. Is the thought that we no longer have to defend it from the Panamanians and, therefore, we can cut down from 14 to 4 bases ? Why is it thait the defense of the canal will be so easy after the treaty is implemented? Why does it become so easy unless the bases are there for the defense of the canal against the Panamanians? I would assume they are not the ones we are defending the canal against, that is, the Panamanians. But under the agreement, the bases would be cut from 14 down to 4. Now, Senators may not think that this process is contemplated, but I would call attention to executive agreement article IV, entitled "Use of Defense Sites," which is not a part of the treaty but is a part of this proposed executive agree- ment in implementation of article IV of the canal treaty. Paragraph (1) of this executive agreement article IV reads this way : "The United States Forces may use the defense sites listed in paragraph (2) of Annex A of this Agreement. * * *" So we have permissive use of these four defense sites, but let us not be fooled into thiinking that that use is contemplated throughout the term of this pro- I)08ed treaty. Paragraph (2) of this article IV of this executive agreement con- tains the following language : "Annex A of this Agreement shall be examined every two years or upon the re- quest of either Government and shall be revised to reflect any agreed elimination or change in areas. The United States Forces may notify the Republic of Panama at any time that the use of a defense site or a military area of coordination or of a specified portion thereof, or other right granted by the Republic of Panama is no longer required. Under such circumstances, said use or right shall cease on the date determined by the two Governments." This is astonishing, Mr. President. We have already agreed in the body of the executive agreement tliat we are going to renegotiate it every 2 years or at the request of either government. Thig treaty is for a proposed term of 23 years. We are going to need negotiators to negotiate this deal if we want to hang onto these defense sites for a term of 23 years with our Government already proposing to negotiate the matter on a biannual basis or upon request. Would Congress have any say in this matter? No, Mr. President, we will have relinquished effectively any say whatsoever in our military operations in de- fense of the canal. The Department of State could simply witih the stroke of a pen more or less at will wipe out what little they propose to retain. You know, Mr. President, I am amused by this language in this paragraph (2) in which we are given permission to notify Panama at any time that the right they have granted us to use one of our defense sites is no longer needed. Ap- parently, someone down at the Department of State thought it was necessary 204 to give us the option to renounce this so-called right of use given to us by the Panamanians in the event pressure was on to move out before the anniversary date of a biannual renegotiation. Of course, on the other hand, it is conceiv- able with the political turbulence in the Republic of Panama that some new gov- ernment in Panama might at a future date wish the L'nited States to stay, but the Department of State has been careful to retain the unilaiteral right to leave anyway. The more I review this material that is in the treaty and a whole lot more that is not contained in the treaty, but would nevertheless bind our Government tlie more I am of the opinion that the Department of State is seeking both to ob- tain ratification of this proposed treaty and at the same time get absolute con- trol of all future dealings with the Republic of Panama inasmuch as the real substance of our relations with Panama can be modified simpy by amending these executive agreements with no need for consultation with Congress and no need for approval by the Senate. But Mr. President another motive of the Department of State may have been to bury in these executive agreements some of the more embarrassing terms of this proposed arrangement with Panama. I think that also could well be the case. For example, do the American people know that we would renounce for- ever the right to place any type of nuclear armament in what is now the Canal Zone? I doubt that they do know that, Mr. President, because that particular provision — this critical major provision — is buried away in paragraph (G) of article IV of the agreement in implementation of article IV of the Panama Canal Treaty. So it takes some pretty careful reading to find out just what is afoot. For- tunately, we do have time to give complete study to these proposed agreements, and I am confident that the Senate will discharge its responsibilities in ferreting out fully the substance of this proposed deal regardless of how fine the print. Mr. President, I yield the floor. STATEMEXT BEFORE THE COMMITTEE ON FOREIGI^ EELATIOXS— FIVE MAJOR FLAWS IX THE TREATIES [From the Congressional Record, Oct. 4, 1977 — S1G215] The Panama Canal Treaties — Xo. 11 Mr. Allen. Mr. President, the last 2 or 3 weeks the leadership has l)een gracious enough to me to allow me three times a week to have time reserved for the purpose of discussing the Panama Canal treaties. This morning I am to testify before the Committee on Foreign Relations in opposition to the treaties, and, for my remarks this morning, I ask unanimous consent that there may be printed in the Record a copy of the statement I will give in just a few moments before the Committee on Foreign Relations. The Acting President pro tempore. Without objection, it is so ordered. Statement by James B. Allen Mr. Chairman, thank you very much for affording to me an opportunity to state to you and to the distinguished members of the Committee on Foreign Relations my reasons for opposing ratification of the proposed Panama Canal Treaty and the proposed, so-called neutrality treaty. Although the defects in both docnmenrs are legion, in my judgment there are five major flaws, each of which on its own ground would warrant complete rejection of the arrangements negotiated, inas- much as each would independently damage the national interest of the United States to such extent as to render it improper for the Senate to give its assent. The five major defects, at least as I see it, are (1) the failure of the Canal Treaty to provide for an adequate defense of the Canal during the proposed 28-year term of the treaty, (2) the failure of the neutrality treaty to grant to the United States the unilateral right to intervene to assure the neutrality of tlie Canal Zone, (3) the astonishing provision of the Canal Treaty which forbids the United States even to negotiate with another nation for construction of a sea level canal without the express consent of Panama, (4) the decision embodied in the Canal Treaty and related loan agreements to pay to Panama some $2,262 billion, and (5) the failure of the Canal Treaty to require Congressional authorization for its proposed cession to Panama of United States territory and property. DEFENSE OF THE CANAL In order to understand the defense provisions of the proposed treaty, care must be taken to examine in detail the Executive Agreement in Implementation of Article IV of the Canal Treaty. Moreover, further study must be given to the annexes to the executive agreement, to the annexes to the annexes, and to the various notes, minutes, and protocols — all of which form the fabric of the joint military defense we would undertake with Panama. I am particularly concerned, Mr. Chairman, that the drafters of the Canal Treaty saw fit to set forth the major substantive defense provisions not in the Canal Treaty in its Article IV, which is entitled "Protection and Defense," but instead in the Executive Agreement in Implementation of Article IV — an agree- ment which is several times as large as the entire Canal Treaty itself. Article IV of the Canal Treaty does not cover a complete printed page, yet the Agreement in Implementation of Article IV is some 53 pages long, excluding annexes and excluding an additional 22 pages of agreed minutes, the minutes themselves hav- ing their own annexes. So, Mr. Chairman, we have critical defense provisions not in the text of the treaty but rather in this executive agreement and in other extrinsic documents which could be modified from time to time by the executive branch with no requirement whatever to obtain the assent of the Senate. Moreover, Mr. Chairman, the defense provisions set forth in the executive agreement are themselves unworkable and portend a complete withdrawal of the U.S. forces from the Canal Zone well in advance of the projected date of 2000 (205) 206 AD. The Administration proposes in this first executive agreement to surrender 10 out of 14 bases. Thus, we are asked at the outset to permit the surrender of 10 out of 14 military bases and to permit our forces defending the Canal to be hemmed in from day one in 4 relatively small enclaves. These bases would indeed be enclaves because our freedom of action outside of the 4 bases would be severely limited by the treaty requirement for approval of operations by a joint military board in which th United States and Panama will have equal authority. Apparently, the doctrine of unity of command is imperfectly under- stood at the Department of State, but the Panamanians no doubt recognize fully that this provision of the executive agreement would give a de facto veto of United States operations outside of the 4 retained bases. So our forces would be restricted to 4 relatively small enclaves, and only the naive would doubt that we would very soon see pressure on our forces to with- draw from the 4 sites retained. That process of withdrawal would be facilitated by the fact that the executive department could close down any one or all of the remaining bases by amendment of the executive agreement with the stroke of a pen without the consent of the Senate or the consent of the Congress. Now, Mr. Chairman, the members of the distinguished Committee may not think that this process of accelerated withdrawal is contemplated, but I would call attention to the provision of the executive agreement implementing Article IV which pro- vides explicity that the agreement will be renegotiated every two years or upon the request of either government and thus tactly acknowledges what is coming. This treaty is for a proposed term of 23 years. Yes, we are going to need tough- minded negotiators if we plan to hang on to these 4 defense sites for a term of 23 years with the Panamanians hounding us daily for complete withdrawal and with our own government already proposing to negotiate the matter on a biennial basis or upon request. Frankly, Mr. Chairman, these 4 defense sites would rest on a foundation of sand, if, by Senate ratification of the Canal Treaty, the Department of State were to be given the right to agree — and they seem pretty agreeable with this dictator down there in Panama — if the Department of State were to be given the right to agree with Panama more or less at any time that the time was pro- pitious to shut down another base. Finally, Mr. Chairman, I would ask the Committee to consider carefully the feasibility of successful joint military operations with Panamanian forct^s. Over the long term we can expect problems. How can we expect full cooperation from an Army whose recruits are taught to chant in unison at their recruit training base at Fort Cimmaron, "Down with the Yankees, death to the Yankees, to the wall with the Yankees." No, Mr. Chairman, over the long term we would be naive in the extreme to expect full cooperation from Panama in any joint defense of the Canal. CANAL NEUTRALITY Closely related to the issue of defense is the failure of the executive branch to negotiate for the United States a right to defend the neutrality of the Canal after 2000 AD. Much has been said in the media to the effect tliat the United States could unilaterally preserve Canal neutrality after a full withdrawal of U.S. forces from the Isthmus of Panama, but, Mr. Chairman, a careful reading of the neutrality treaty makes it evident that, in fact, the United States would have no such right whatsoever. The neutrality treaty simply declares that the Canal Zone is neutral and sets forth an agreement by the United States and Panama tliat both parties recognize the Canal's neutrality. Nowhere is the United States granted permis- sion to determine that the neutrality of the Canal is endangered or has been violated and nowhere is the United States granted the right to intervene to insure that the Canal is not made available to an enemy nation while being denied to our Navy and merchant ships. Additionally, Mr. Chairman, the so-called right of expeditious transit given to United States warships is totally meaningless. The failure of our negotiation to insist on privileged passage for United States war vessels could permit Pan- ama in an emergency to delay the movement of United States warships by simply requiring those vessels to transit the Isthmus on the same "expeditious" basis as merchant ships of all nations. As Dr. Romulo Escobar Bethancourt, chief negotiator for Panama, put the matter, "If the gringos with their warships say, *I want to go through first,' then that there is their problem with the other ships there." Regretably, Mr. Chairman, Dr. Escobar's analysis of the practical meaning of our right to ex- peditious transit, although stated undiplomatically, is nevertheless precisely 207 correct. His complete rejection of any claim that the United States is given the right to send troops to preserve Canal neutrality also accords accurately with the language in the text. In fact, the truth is, Mr. Chairman, that Dr. Escobar's construction of the neutrality treaty, unlike the construction placed on it by our ov^n executive department, is a construction based on the languaire of the treaty itself rather than on wishful thinking or on the assertions of the mass media. SEA LEVEL CANAL From the language in the Canal Treaty rather than from press reports, we also learn that the United States would agree not to negotiate without Pan- amanian consent with any country except Panama for the right to construct an interoceanic canal on any other route in the Western Hemisphere. Mr. Chair- man, knowing you as I do, I feel certain you share my astonishment that the negotiators for the United States saw fit to preclude any possibility of construc- tion of a new interoceanic canal, perhaps at sea level, without our country first obtaining the express consent of a pro-Marxist and highly unstable military dictatorship. Why was this concession necessary? What did the United States gain from the concession? I notice with some amusement, Mr. Chairman, that the Republic of Panama purports to grant to the United States of America the right to add a third lane of locks to the existing canal. Inasmuch as the United States already has the right to add a third lane of locks to the existing canal, surely our negotiators did not think that a meaningless concession of that variety was sufiicient con- sidertaion for giving the Panamanians a veto over any other project we may wish to undertake to connect the two oceans. Certainly, the negotiators for the United States could not have felt that the Panamanian agreement to commit Panama "to study jointly the feasibility of a sea level canal" warranted a counter- vailing commitment from the United States not to do anything whatsoever with- out Panamanian permission — but perhaps so. The bizarre behavior of our negotia- tors has produced other results equally as startling. In any event, Mr. Chairman, one thing is sure and that is that the Pana- manians know they got the best of this bargain. Discussing the sea level canal issue, chief Panamanian negotiator, Romulo Escobar Bethancourt, on August 19, 1977, with pride explained to the Panamanian National Assembly the unilateral benefits of the ^o-called sea level canal options. Dr. Escobar's remarks on the subject, like his remarks on neutrality, are illuminating and are worth studying in full. As Dr. Escobar explains, instead of the United States obtaining an option to build a sea level canal, the United States negotiators gave to the Panamanians the option to veto construction of a sea level canal by the United States anywhere in the Western Hemisphere. Now, Mr. Chairman, committing the United States to deal only with Panama about building another canal is a serious mistake. As the distinguished Chairman knows, the best route for a sea level canal is in Nicaragua, that being the route that Senator John Tyler Morgan favored during consideration of Isthmian routes in the early part of this century. Senator Morgan of Alabama, who was Chairman of the Senate Committee on Interoceanic Canals, felt strongly that Nicaragua provided a more favorable political and geographical solution to the immense problems involved in constructing a canal between the two oceans. Retrospectively, he may well have been correct, yet our present treaty negotiators propose to foreclose entirely the option Senator Morgan and many others favored, an option which should at least be kept open. Certainly, with the great volume of Alaskan oil which is only now beginning to come on stream and which must move to Gulf and East Coast refineries, any relinquishment of the right to negotiate for a sea level route in Nicaragua is a very grave mistake indeed. $2,262 BILLION TO PANAMA FOR THE RIGHT TO CEDE THE CANAL ZONE TO PANAMA So, Mr. Chairman, we are presented a treaty which does not provide for an adequate defense of the Canal, does not give the United States the right to inter- vene to guarantee neutrality, and does not allow the United States to initiate new canal projects except with Panama's consent. The Canal Treaty does, on the other hand, give the Canal Zone to Panama; it does eventually also give the Panama Canal Company to Panama: it does immediately give the most lucrative operations of the Panama Canal Company to Panama ; it does give 10 United 208 states military bases to Panama ; it does give Panama political jurisdiction over 37.000 United States citizens living in the Canal Zone ; and finally, Mr. Chairman, it gives to Panama over the life of the treaty $2,262 billion in 1977 dollars. You know, Mr. Chairman, ordinarily the grantee pays the grantor, but our clever negotiators have figured out a way for us to give away the Canal Zone and pay the recipient at the same time. I will not insist on going into great detail on how this $2,262 billion in 1977 dollars is to be paid to Panama because I know the Committee is fully familiar with the financial ramifications of this proposed arrangement. However, I would recommend to the Committee a careful reading of a speech given on August 19, 1977, before the Panamanian National Assembly by Panamanian Planning and Economic Policy Minister Nicolas Ardito Bar- letta. Minister Barletta's analysis of the cash flow of this arrangement is. in my judgment, valid, and it is from his work that I have drawn the figure $2,262 billion. Why are we proposing to pay these tremendous sums to Panama? Why would we permit these proposed toll increases which will surely burden commerce and inflate consumer prices in the United States? The only reason I can ascertain is a desire to provide Panama with funds to repay outstanding loans from the large international banks. The Library of Congress did a study at my request which indicates that the external public debt of Panama is some $1.7 billion. Interest on that sum is a tre- mendous burden in this small country of only 1.7 million inhabitants, and already 40% of current revenues in Panama go to carrying present indebtedness. Stating the matter bluntly, Panama is on the verge of bankruptcy and many of our large banks hold loans which may soon be bad debts, that is, of course, unless the United States taxpayer rescues the banks by providing the funds to Panama for repay- ment. Mr. Chairman, sooner or later the Congress must draw the line and stop robbing American taxpayers to extend funds to bankrupt Third World countries so that international banks can collect principal and interest on shaky loans. In my judgment, the international banks should be required to write off their bad debts, to write off at least some portion of the loans they made in error, and the inter- national banks should be put on notice that the American taxpayer will not always guarantee a proflt in any loan transaction with unstable governments. Perhai)s, rejection of the Panama Canal Treaty would be a good method to send that message. THE CONSTITUTION IGNORED The final major defect in the treaties is perhaps the most significant since it represents a direct assault by the executive branch on the prerogatives of Con- gress and since it would set a precedent extending the authority of the executive branch far beyond the bounds contemplated by the authors of the Constitution of the United States. Article IV, Section 3 of the Constitution provides that Congress "shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States." Mr. Chairman, I know that the Attorney General has advised the Committee that the proposed treaties do not in any respect violate this clause, but with all due deference to him as a very able lawyer, I cannot share his rationalization of the clear lan- guage of the Constitution or his characterization of consistent past practice in our dealings with Panama. In 1036 and again in 1955, cessions of United States territory to Panama were made continguent on Congressional authorization. Yet now that a truly major cession of virtually all United States territory in the Isthmus of Panama is contemplated, the executive branch has seen fit to assert a noval theory by which the Administration would circumvent the Congress. The reason for development of this novel theory of Constitutional law is, I believe, a matter of practical politics rather than legal scholarship since public opposition to giving up the Canal is so overwhelming that any Congressional authorization of a cession of territory would be diflicult, if not impossible to obtain. But beyond the immediate question, if we in the Senate permit this circum- vention of the role of the whole Congress in any cession of United States territory, we will be setting a very dangerous precedent which will surely be used again by this or future administrations to assert power in an area heretofore preserved to the Congi-ess. My own guess is that we would next see this precedent applied 209 to the Guantanamo Xaval Base in Cuba, but perhaps other cessions of territory or property are also in the works. So, Mr. Chairman, this Committee should not lightly endorse a departure from sound Constitutional principles simply for the political expediency of tlie mo- ment. This Committee, should, instead, amend the proposed treaty at all appro- priate points to make cessions of territory subject to the enactment of authoriz- ing legislation by the Congress. I would hope that such an amendment would be one of many adopted in Committee to correct these glaring defects I have dis- cussed. RESERVATIONS, AMENDMENTS, AND THE FILIBUSTER In summary, Mr. Chairman, I believe that the Senate should play a significant role in the formulation and revision of these proposed treaties so that the terms of any new arrangement with Panama can be made acceptable to the American public and so that the national security interests of the United States can be protected. Mr. Chairman, I am sure you know of the early practice of including Senators hi delegations sent to foreign countries for the purpose of negotiating treaties. That practice has unhappily in large measure ceased, and the Senate has been more and more asked for consent rather than advise. These treaties provide an excellent opportunity for the Senate to reaffirm its Constitutional prerogative and. indeed, duty to advise the Executive — to advise the President — in matters of foreign policy, particularly with respect to treaty negotiation. The Senate can give its advise through the amending process. These treaties should be amended to cure their obvious defects, and since any amendment will require a renegotiation of the amended treaty, the Administration will be advised by these Senate amend- ments of what is accpetable to the Senate and to the people and what might later receive Senate consent. Reservations to these treaties would be of little or no value. Reservations simply state the opinion of the Senate and do not have the full force and effect of law. No, Mr. Chairman, the defects in these treaties require outright amend- ments, and I strongly urge that the Committee take in hand the process of amend- ing the treaties before reporting the treaties to the Senate, at which time the Senate will first receive them as the Committee of the Whole. Although there will be ample opportunity, I am certain, for amendment in the Committee of the Whole and on the floor of the Senate, certainly the Committee on Foreign Rela- tions should play the leading role in molding and amending these documents and giving thereby to the Administration its advice on arrangements with Panama. Finally, Mr. Chairman, I would comment that I do not foresee a filibuster of these proposed treaties. I do foresee a full discussion, legitimate debate, and con- sideration of substantive and serious amendments. A filibuster would be point- less, both because a filibuster could be stopped by GO Senators whereas the treaties could be stopped by 34 Senators and because both treaties present ques- tions which should be disposed of without undue delay. Inasmuch as the concerns of the citizens of the United States are fairly evident, the Senate should with deliberation, but nevertheless promptly, discharge its duty in considering ratification. No good purpose would be served by having these proposed treaties more or less hanging around for years. They should be put to the test of ratification expeditiously, and it is my own sincere hope that the wis- dom and desires of the people of the United States will be respected and that accordingly the treaties will be defeated. Thank you for the opportunity to appear before this distinguished Committee and before its distinguished Chairman, who is my friend and senior colleague. mSINFORMATION IN THE HISTORICAL BACKGROUND [From the Congressional Record, Oct. 5, 1977 — S163&8] The Panama Canal Treaties — No. 12 Mr. Allen. Mr. President, this is the 12th speech in a series dealing with the proposed Panama Canal treaties. Yesterday I testified before the Senate Commit- tee on ForeiiCT Relations, and in lieu of full remarks in the Senate on the canal treaties, I obtained unanimous consent to have printed in the Record my testi- money at the Foreign Relations Committee hearing. Today, Mr. President, I will discuss the historical background against which the United States negotiated the Hay/Bunau-Varilla Treaty, the treaty of 1903, which made i>ossible the construc- tion of the Panama Canal, Frankly, there is so much misinformation on this subject that perhaps the Senate will find advantage in a review of the facts as they actually occurred. Although an isthmian canal had been contemplated from the time of Cortez, the first significant event leading to the construction of the canal was the treaty of 1846 with Colombia, then known as New Granada. Under the provisions of the treaty, New Granada guaranteed to the United States the exclusive right of tran- sit across tiie Isthmus of Panama — the State of Panama, which was then a province of New Granada — "upon any modes of communication that now exist or that may be hereafter constructed." So this language is really the forerunner of the rights and the property rights that the Unitetl States gained under the treaty of 1903 "upon any modes of com- munication that now exist or that may be hereafter constructed," In exchange, the United States guaranteed "positively and eflScaciously" the "perfect neutrality" of the isthmus — I repeat, this sort of language goes way back, more than 100 years ; the United States guaranteed "the perfect neutrality" of this area "posi- tively and eflScaciously," and further guaranteed new Granada's right of sov- ereignty in the isthmus. Pursant to this agreement, the United States constructed the Panama Railroad, which now crosses the isthmus in the vicinity of the Panama Canal. The discovery of gold in California in 1848 intensified the interest of the United States in a route across the isthmus. Ultimately, however, the single event which focused the full attention of U.S. citizens on the desirability of constructing a canal was the dramatic 1898 voyage of the battleship Orecjon at the beginning of the Spanish-American War from the west coast of the United States around the Horn and into the Caribbean. Our first true modern battleship, tlie Oregon was in San Francisco when the Maine blew up in Havana Harbor. Victory over Spain in the Caribbean w^as dependent on the Oregon's presence. The warship was a beautiful and well equipped vessel, and with determined sailing, she did arrive off Cuba in time to play a crucial part in the battle of Santiago Bay, However, the trip took almost 70 days, highlighting the great necessity for an Isthmian Canal for expedited American naval operations. The long voyage of the Oregon was the great catalyst in firming American resolve to sever the continents. Years prior, in 1850, as a first step, the construction of the Panama Railroad had begun. The railway was finished 5 years later at a cost of $8 million, six times the initial estimate. The world's first transcontinental railroad, its high construction cost which would just be a drop in the bucket compared to the costs today, of courfje, made it the most expensive rail line on Earth. Nevertheless, at a price of S^^o in gold for a one-way ticket, it earned massive profits for its stockholders. Twenty-five dollars in gold, Mr. President, a high price in that day, was neverthe- le<^s considered quite a bargain inasmuch as a passenger could thereby reduce greatly the length of time required to remain in Panama during a transit from one ocean to the other. Panama was considered the most unhealthy region in the civilized world, and the less time spent there by a traveler, the better. During the construction of the railroad, for example, more than 6,000 construction work- (210) 211 crs died of cholera, dysentery, yellow fever, malaria, and small i>ox — all diseases for which there v/as tlien no known cure. So, Mr. President, thanks to this treaty of 1S46 with New Granada and thanks to American initiative, the isthmus at Panama was spanned. So we have a long history of operations in Panama, in moving from one ocean to the other, then by railroad and now by canal. Under the terms of the treaty with New Granada, the United States was obliged to keep the railroad open and to protect it against any potential enemy, by force of arms if necessary. As a result, U.S. naval vessels were customarily stationed in the Caribbean off Colon and Panama City. Way back then, Mr. President, we were given the right to defend the railroad and keep the railroad open. So there is a parallel history between the situation regarding the canal today and the Panama Railroad of a century and a quarter ago. That is one of the big objections to this treaty today, that it does not properly provide for defense of the canal. The construction of the terms of the treaty are in doubt, with Panama saying one thing and our negotiators saying another. I would say, Mr. President, that the express terms of the treaty would indicate to my mind that the Panamanians have the proper construction of what the treaty means. Way back 125 years ago it was provided that we would have a right to defend this method of going from one ocean to anotlier, transiting the isthmus. Now the point of recalling these facts, Mr. President, is to refute some of the present-day mythology surrounding the history of the efforts of our country in the Isthmus of Panama. The true facts are that the United States was deeply involved in Panama from a very early stage and that the work of the United States has been the critical element in establishing and maintaining safe routes of travel between the two oceans. A reexamination of the history of U.S. efforts in Panama confirms the tremendous investment of life and materiel required of the United States in its great national adventure in the Isthmus at Darien. Most of us, for example, have forgotten the hard work of Admiral Ammen, who led seven expeditions to Central America between the years of 1870 and 1875 for the purpose of obtaining knowledge about where a canal should be built. Frankly, Mr. President, it was not at all obvious that the best route was the route ulti- mately taken, and much debate, as well as engineering surveys, ensued from the time of Admiral Ammen's initial expeditions until the time of decision to use the present route. The expeditions of Admiral Ammen were carefully done, and his results formed a basis for future efforts. Commenting on the Ammen expeditions, then President Grant commended the canal project to the American people with the statement, "An American canal, on American soil" — not a bad recommendation and certainly a sound concept. To be sure, Mr. President, other nations attempted to compete with the United States in efforts to connect the oceans. Most notable of these was the effort made by the French under the leadership of Ferdinand de Lesseps. De Lesseps' claim to fame was considerable since he supervised the construction of the sea level canal at Suez. However, Suez had no relationship to Panama and de Lesseps met with no success when he tried to transpose the methods used at Suez to the pestilent- ridden jungles of Central America. The French eft'ort collapsed in 1899 amid charges of embezzlement and corruption. Subsequent attempts to renew French construction succumbed rapidly to the returning jungle. In 1899, after the events of the Spanish-American War, the United States estab- lished the Isthmian Canal Commission and placed the agency under the leadership of Rear Adm. John G. Walker. The Commission was charged with selecting a route somewhere across the isthmus and was given the further objective of rec- ommending the type of canal to be built. Nicaragua, not Panama was recom- mended, and candidly, Mr, President, absent political considerations, the Nica- raguau route may well have been the proper choice and indeed may well be the proper choice now if the United States does choose to construct a sea level canal for the transit of major warships and supertankers. So, Mr. President, Nicaragua was the preferred route ; Nicaragua was \iewed as a country with a healthier climate and a more stable government than Pan- ama ; Nicaragua had very strong support in the Congress, particularly in the Sen- ate under the leadership of the great Senator from Alabama, John Tyler Morgan. Senator Morgan, of course, is known as the father of the Panama Canal, even though initially he supported th Nicaraguan route. Once the decision was made to construct a canal in Panama, Morgan, as chairman of the Senate Committee on Interoceanic Canals, threw his full energies into the Panamanian project. 212 But as I said, Mr. President, initially Nicaragua held the favored route; ulti- mately, however, at the culmination of was was then known as the Battle of the Routes, Congress on June 2S. 1902. passed the Spooner Act to authorize the con- struction of an interoceanic canal in Panama. This is in support of the discussion today, as to whether the entire Congress has to pass an act in addition to the Senate giving its advice and consent to the treaty. You know, Mr. President, back in those days it was thought that the Congress had to autiiorize the President to take a major step in foreign policy, such as the initiative required to obtain canal rights in Panama. So they did pass this act called the Spooner Act to give to the President the authority to proceed. The Spooner Act involved the acquisition of territory, and we have certainly come a long way since those days because now we have an administration asserting, not- withstanding the clear language of th Constitution, that there is not even a need to obtain congressional authorization to cede U.S. territory to another nation. Yes, Mr. President, we are light-years removed from the way Government was conducted in 1902, even though only 75 years have elapsed. The Congress gave the President authority in the Spooner Act to acquire from the Republic of Colombia "peri^etual control of a strip of land*' not less than 6 miles in width from the Caribbean Sea to the Pacific Ocean, and having obtained such property, thereafter to excavate, construct, and "perpetually maintain, operate, and protect thereupon a canal." So the Congress authorized the President to acquire this strip of land, and of course eventually President Theodore Roosevelt did acquire the strip of land. Yet the 95th Congress is being avoided entirely now that the administration wants to give this strip of land away. But look at this, Mr. President. The Spooner Act contained some further pro- visions which should be of interest to the Senate. The President under the Spooner Act was further directed to maintain U.S. "jurisdiction over said strip and the ports at the ends thereof to make such police and sanitary rules and regulations as may be necessary to preserve order and preserve the public health thereon and to establish judicial tribunals as may be agreed upon thereon as may be necessary to enforce such rules and regulations." The point I am making, Mr. President, is that this canal was no project lightly entered into by the United States. The Congress and people w^ere deeply involved every step of the way. Great forethought went into the negotiations with Co- lombia and later with Panama. Great forethought went into the conditions under which the United States felt it would be acceptable for the United States to undertake the tremendous financial and human sacrifice that would be required to build this manmade wonder of the world. The matter was debated, studied, fought over, covered extensively in all the periodicals of the time, and only when great national consensus emerged was the project finally initiated. How much different is the situation we face today. Our people are united in their resolve against these ill-advised, imperfectly drafted, and dangerous treaties, yet the administration and much of the national mass media have joined forces to attempt to ram these proposals down the throat of the Senate, to attempt to revise history, to attempt to reeducate our people — our people. Mr. President, understand already the history of the Panama Canal, because most of them grew up being told in their homes that its construction was perhaps our Nation's greatest peacetime accomplishment. So, Mr. President, our people are going to have to be reeducated quite a bit if their resolve in opposition to these treaties is to be seriously shaken. It is going to take around-the-clock work by revisionist historians to convince our people that the construction of the Panama Canal was not a glorious achievement rep- resenting the very best of what is good about our country, a great work for peace and for humanity, an effort which produced benefits in medical science we are still enjoying today, and an achievement which lifted the Province of Panama from abject poverty, ignorance, and misery to a position of wealth and respect among Central American nations. Efforts to revise history are well underway. For many months now and with greater and greater frequency, we hear accounts implying that the United States stole the Canal Zone from Panama and somehow, through intrigue, euchred the Panamanians out of their most valuable asset. These accounts conveniently over- look the simple fact that the only asset held by Colombia and later Panama was an accident of geography covereil by a jungle into which only the brave or fool- hardy dared to tread and from which few emerged. 213 Tomorrow, Mr. President. I plan to discuss tlie final events leading to the negotiation of the treaty of 1903, the Hay/Bunau- Vara 11a Treaty. My purpose ^yill be to explain the circumstances under which the treaty was agreed upon and hopefully to refute the allegations of misconduct on the part of tlie United States in obtaining our rights in Panama. In my judgment, study of the history of the treaty of 1903 is a worthy pursuit for all of us, because the American people are being told by many that we have something to be ashamed of in our acquisition of the Canal Zone. Mr. President, rather than shame, Americans should feel — and do feel — an immense sense of pride. A reexamination of the history of the period, rather than causing embarrassment, should reinforce our sense of appreciation for a great national achievement and should strengthen already strong resistance to any proposal which would tear down a work well done. EVENTS LEADING TO THE HAY/BUNAU-YARILLA TREATY OF 1903 [From the Congressional Record, Oct 6. 1977 — S16462] Mr. Allen. Mr. President, if there is no objection, this can come out of my allotted time. I commend the distinguished minority leader, the Senator from Tennessee, (Mr. Baker) and the distinguished Senator from Kansas (Mr. Dole) for the expres.sion of their views with respect to the differing interpretations placed upon the language of the treaty by the Panamanians and by our negotiators. I believe, however, I differ somewhat from what I perceive to be the position of the distinguished Senator from Tennessee with respect to the method of curing this grievous wound to the treaties. I do not believe it will be sufficient to exchange notes or exchange correspondence between the negotiators. What we have before the Senate is the wording of the treaties, and any extraneous matter, any interpretation that we gather by exchange of notes or exchange of corre- spondence is not going to remedy the defect in the conflicting interpretations that the negotiators place on it. This treaty has been faulted. It contains this serious fault, and the only way to cure the fault would be to amend the language of the treaty — not a reserva- tion, not an understanding, but an amendment of the treaty. We all know the instability of the Panamanian dictatorship ; and whereas we might have some sort of understanding in correspondence and exchange of notes between Panama and the United States as to the meaning of the treaty, suppose there is a change in the government down there. Suppose another dictator comes in. Suppose the force of public opinion down there requires them to repudiate any understanding that is reached as to the meaning of this treaty. Why must we have each nation interpret the meaning of a treaty? The meaning ought to be plain and explicit in the language of the treaty itself. So to suggest that possibly this needs to be straightened out by statements and correspondence is not going far enough. It cannot be straightened out through exchange of notes by the parties. This treaty must be amended. What happens after the amendment? It goes back for further negotiations. A new treaty has to be entered into. It has to go through the same process this treaty is going through. But in my judgment it would be folly indeed for us to give our advice and consent to the treaty relying upon an exchange of corre- spondence or notes between the parties. An out and out amendment, stating exactly what the understanding is, must be insisted upon. I believe that the treaties have been faulted beyond repair. I do not believe that the treaty can recover from the damage that has been done by the disclosure of this conflicting interpretation by the parties. Mr. Baker. Mr. President, if I have any time remaining under the standing order, I yield it back. The Acting President pro tempore. Under the previous order, the Senator from Alabama (Mr. Allen) is recognized for not to exceed 15 minutes. The Panama Canal Treaties — No. 13 Mr. Allen. I thank the Chair. I have already commented on my views as to the conflicting interpretations placed upon the language of the treaty. The disclosure of this cable is not the first time that it has been apparent that there is a difference of opinion between the interpretation that the Panamanians place on the treaty and the interpretation that the U.S. negotiators place on the treaty, because Dr. Escobar, their chief negotiator, reported to the Panamanian legislative body these very two points of difference of interpretation : That is, first, on the right of the United States to send in troops to defend the canal, the right of the United States to determine when the neutrality of the canal is in danger. Dr. Escobar says that right is not given under the treaty. Second, Dr. (214) 215 Escobar says that the interpretation we place on the expeditious passage of our warships is not tlie interpretation they place on that. Dr. Escobar says that our ships would just have to get in line with other ships that might be wanting to transit the canal. Minister Barletta of Panama also raises the same point, and gives a differing interpretation to the language of the treaty. So throughout their government, it is quite obvious that they place a different interpretation on the treaty from that which we place on it. Suppose they do say, "Well, we are wrong in our interpretation. The gringos," as Dr. Escobar calls us, "are right in their interpretation." Well, that is not going to ytand up. You cannot amend a treaty by exchange of notes. That is just not possible. Even though the negotiators, the separate teams of negotiators, worked for 13 years on this treaty, I will have to say they did not do a very good job of drafting the language, if it is susceptible of so many different constructions. I believe we can wait another 13 years, Mr. President, while they give attention to redrafting these treaties, and then submit them back to us here in the Senate. How could there not have been a meeting of the minds? We all know that in a contract — and a treaty is a contract ; it is a high level contract, but it is a con- tract, and as in all contracts, there has to be a meeting of the minds. There has to be an understanding, where both parties have the same understanding, for it to be valid. A treaty is the same way. If one party leaves the negotiating table and says that the treaty means this, and the other party to the negotiations leaves the negotiating table and says the treaty means something diametrically opposite, we have not had a meeting of the minds. It is elementary as to a contract — and as I say, a treaty is a contract — that you must have a meeting of the minds, and since there has been no meeting of the minds, the treaty has been faulted, as I see it. So it is going to be necessary to amend this treaty in many particulars. We have got to amend the provision that says that for 23 years we cannot even negotiate with another nation on the building of another canal. Well, we certainly do not want to build another canal in Panama, because we are having to give them this canal, and I assume they would want the other canal. If we cannot negotiate with Panama, whom are we going to negotiate with? Well, we cannot negotiate with anybody under this treaty for 23 years. I do not know whether the present canal will take care of the traffic for tlie next 23 years. As I say, we certainly do not want to build Panama another canal at the expense of the American taxpayers. So that has got to be changed. This treaty needs to l)e changed in at least seven or eight major particulars. What would be the effect then? Well, even if the treaty is approved with these major changes in it. it could not then be agreed to by Panama by accepting our amendments. It would require renegotiation of the treaty. The treaty, if amended in these particulars, would be a nullity insofar as being a treaty is concerned. This document so amended, while not valid as a treaty— and Panama could not breathe life into it — would serve as a guideline. We hear a lot about guidelines here in the Federal Government. This document would serve as a guideline to our negotiators. They could take this treaty draft as amended by the Senate and they would be armed with the view of the United States Senate in further negotiations. Well, the Senate ought to have been in on this anyhow. Mr. President. For 13 years, the negotiators negotiated without any consultation, so far as I know, with Members of the U.S. Senate. Nobody knew what was in the provisions. Nobody knew the progress that was being made in the negotiations. It was a carefully- kept secret. That is one of the failures in this nogotiating process, that the U.S. Senate, which is supposed not only to consent but to advise, was not given any opportunity to advise in the treaty negotiation process. President Wilson, at the end of World AVar I, fell into this very same trap. We have not learned any lessons from the history of the Versailles Treaty. I am a great admirer of President Wilson, but he took upon himself to negotiate the Ver- sailles Treaty. He did not have Senators involved in the negotiations, and when it came back to the Senate, the Senate felt that it was something that they had no part in, and they were just asked to consent to the treaty rather than to advise and consent. So, Mr. President, after this treaty is amended in these particulars that I speak of, then the Senate would have given some advice to the executive department as 99-592 — 78 15 216 to what the people of the United States, speaking through their U.S. Senators, speaking through the Senate of the United States, are willing to accept. So the amendment process is what we need to follow in the Senate with respect to this treaty and let that document, as so amended, serve as the guideline to our negotia- tors as they negotiate again. I would he perfectly \Ndlling, as a Member of the Senate, to see this annuity that we pay Panama — something like $2.3 million a year now — increased tenfold or even more out of the canal revenues. But I feel that we definitely must keep sovereignty over the Canal Zone. We must keep the operation and management of the canal. We must keep the rights to defend the canal. So I would not object to an overall amendment of this treaty, raising this annuity, but leaving all other provisions of the 1903 treaty in full force and effect. I could conscientiously vote for that. I do not think we need to pinch pennies. It is not a question of the money in- volved, though I do not look with favor on this multibillion dollar subsidy "that is being arranged in the manner of loans, plus the addition to the annuity. *But I do not think we should be too much concerned about the cost of raising the an- nuity. As I say, I would be willing to see it raised tenfold or more. Let us keep the sovereignty of the zone. Let us continue to operate and manage the canal. Let us continue to defend the canal. Mr. President, yesterday I reviewed in some detail the events leading up to the passage of the Spooner Act, which directed the President to acquire from the Republic of Colombia perpetual control of a strip of land not less than 6 miles in width from the Caribbean to the Pacific and instructed the President to excavate, construct, and perpetually maintain, operate, and protect an interoceanic canal. Today, I will trace the history of our negotiations with Colombia and with Pan- ama for the purpose of making plain the fact that the United States did not be- have improperly in acquiring the Panama Canal Zone and for the further purpose of demonstrating the folly of ratifying these dangerous treaties out of some mis- placed feeling of obligation to Panama or out of some vague desire to correct a past wrong which is more imagined than real. After adoption of the Spooner Act, several months of arduous negotiation en- sued between then Secretary of State Hays and Tomas Herran, charge d'affaires of Colombia. The result was a canal treaty very favorable to the United States. The treaty was concluded and signed by both parties on January 22, 1903. and consented to by the LT.S. Senate on March 17 of that same year. The Colombian Senate was called into session on June 20, 1903, to consider the treaty. However, the Colombian Senate declined to give its assent. Many have assumed that Colombia failed to ratify the Hay-Herran Treaty out of motives of patriotism and national pride. Although to be sure those elements may well have been factors in the debate at BogotA, careful students of the mat- ter recognize that foremost in the minds of a majority of Colombian senators must have been the fact that the rights of the French company, the so-called New Panama Canal Co., were due to expire in the course of several months and as a result the Colombians would be eligible to receive a $40 million payment sched- uled by the United States for payment to the French company for the purchase of its rights, all with the result of increasing Colombia's take from $10 million to ,$^50 million. So, Mr. President, Colombia, motivated at least in part by greed, decided to gamble by rejecting the Hay-Herran Treaty in the hope that in a few months a better deal, a more lucrative deal, would result. Of course, from Colombia's point of view, the unfortunate outcome was the secession of Colombia's province, Pan- ama, and the negotiation of the treaty of 1903. A web of outrageous misinformation has been spun by the Department of State and supporting propaganda has been shrilly proclaimed by Panama's dictator, all for the apparent purpose of creating the impression that the United States instigated the Panamanian secession in order to seize control of the Panamanian canal route. I would not be surprised, Mr. President, if even a majority of the Senate has adopted the false belief that the U.S. Navy landed troops and seized the Cannl Zone from the Panamanians under duress. The opposite is the truth. Panama seceded from Colombia under leaders who understooil exactly what they were doing. Panama seceded from Colombia en- tirely out of motives of self-interest, seeking enrichment and the vast benefits destined for the new nation if the Unitcnl States could be induced to undertake the canal project. Panama argued hard against tlie Nicaraguan route and ac- tively sought the support and protection of the United States for her secession 217 from Colombia. The United States, on the other hand, did not intervene, did not land troops, and did not prevent the landing of troops from Colombia sent to quash Panama's secession. Why was the Panamanian revolution entirely bloodless, and why did Colombian troops in Panama rapidly make terras with insurgent forces and in some in- stances even change sides? The principal reason was near unanimity among Pan- amanian leaders in their desire to conclude a treaty with the United States for the construction of a canal. These leaders, who effectively controlled Panamanian politics, were Jose Augustin Arango, Dr. Manuel Amador, Frederico Boyd, Ni- canor de Obarrio, Carlos C. Arosemena, Manuel S. Espinosa, Tomas Arias, and Ricardo Arias. They each understood that rejection of the Hay-Herran Treaty by the Colombia Senate meant the United States would switch to the favored Nicaraguan route. Panama, in sliort, would remain a jungle pesthole. The first meeting of the secession movement was held on July 25, 1903, soon after the rejection by Colombia of the Hay-Herran Treaty. Panamanians a i ways had held the government in Bogota in low regard, but its rejection of the Hay- Herran Treaty was the final straw and animated tlie secession conspiracy. The uprising occurred on the evening of November 3, 1903, and was conducted entirely by the Panamanian insurgents. The presence of U.S. Naval vessels off Panama City and Colon did, to be sure, inhibit Colombian actions in attempting to retake the province of Panama, but effectively the coup d'etat was accomplished within 24 hours, making Colombian efforts largely unavailing. Many Colombian troops joined the rebels, many others withdrew, and at no time were shots fired by either side. Thereafter, the successful conspirators formed a provisional government and designated Bunau-Varilla as the new country's negotiator for a canal treaty. Bunau-Varilla was named to this important post becaiuse the Panamanian leaders l>elieved correctly that Bunau-Varilla would be in a position to persuade the United States to stand by tlie Panamanian route, notwithstanding tlie continued efforts of Senator John Morgan and others in the American government to urge negotiation of a treaty with Nicaragua. The Treaty of 1903 was signed l)y Secretary of State Hay and Bunau-Varilla on November 18, 1903. Its provisions were quite similar to the provisions of the Hay-Herran Treaty, save that they contained many amendments offered by Sen- ator Morgan when the Herran Treaty was under consideration in the Senate. These amendments were included in the text of the Treaty of 1903 to preclude Morgan's objections. In any event, the text of the treaty was cabled immediately to the provisional government in Panama and was unanimously approved by the new Republic of Panama on December 2, 1903, before the U.S. Senate acted to give its own assent to the treaty's ratification. Mr. President, the Republic of Panama was born under the protection of the United States. The Panamanians received from the United States what they most desired : construction of an interoceanic canal by perhaps the only country in the world capable of undertaking that task successfully. The Panamanian econ- omy boomed ; the new nation received a tremendous good endowment and was assured of regular gold annuity payments and the benefits of massive U.S. investment. The lesson taught by this history is simple. Men tend to forget what is conven- ient to forget and to hold fast to that which is of present value. I trust that the people of the United States will hold fast instead to the facts, will recognize the great and good role our country played in constructing the Panama Canal, and will reject totally the concept that we should adopt these treaties, dangerous to our own national economy, out of motives of shame. I yield back the remainder of my time. PROPOSED TREATIES SHOULD BE WITHDRAWN, REDRAFTED, AXD RENEGOTIATED [From the Congressional Record, Oct. 10, 1977 — S16790] The Panama Canal Treaties — No. 14 Mr. Allen. Mr. President, over the past days and weeks, I have been discussing here on the floor of the Senate certain major defects in the proposed Panama Canal treaties which have been sent by the administration to the Senate for con- sent. I say "consent," because there are many treaties by the administration without our having had an opportunity to advise with tlie administration or with the -negotiators as to the content of tlie treaties. In the course of these discussions, in the course of the studies we have each ^indertal^en of these proposed new arrangements with Panama, and in tlie course of the various committee investigations, in my judgment the Senate has now reached a point at which the treaties are sufficiently well understood by us all to recommend to the President of the United States that the treaties be withdrawn. Certainly, my own conclusion after careful deliberation is emphatically that the Senate should not give its consent to these treaties in their present form and, furthermore, that these treaties are so defective as to render inappropriate any attempt to correct them by amendment, reservation, or understanding or through any extrinsic exchange of notes or similar device. Mr. President, it seems to me that if we do add many amendments to the trea- ties, if we add reservations to the treaties, if we add understandings to tbe trea- ties, we would end up with a patchwork document ; and I do not believe we should have to go to other documents to determine what the treaty means. I think we shf)uld have a treaty that, within the four corners of the document itself, will consist of wording that explains exactly what the agreement is. Law school freshmen learn in their early days, in their course on contracts, that a contract requires a meeting of the minds. There has been no meeting of the minds here, because the Panamanian negotiators say the treaties mean one thing and our negotiators say they mean something else. I must say that the drafting of these treaties was done in a slipshod fashion, if we are not able to draft a document by which both sides understand exactly what the provisions of the treaty mean. We should not have negotiators leaving the negotiating table and then, as soon as the treaties are signed by the heads of States of the two countries, have dis- agreements as to what the treaties mean. Of course, I contend — and I feel that it is a correct assessment — that if we amend the treaties, the treaties are dead. They have to go back to be renegotiated. So if we do amend the treaties, as distinguished from adding reservations and understandings, a treaty as amended, whether it is voted by the Senate or voted down l)y the Senate, could serve as a guide for our negotiators, indicating how the people of the T'nited States, acting through their duly elected Senators, feel about the treaty. They could use this treaty, as so amended, if it is allowed to stay before the Senate, as a guideline to redraft the treaty. I believe we need to have the treaties withdrawn and renegotiated, because the points have been made to the Senate and to the administration that the provisions of the treaties liave brought forth conflicting interpretations by the parties. I feel, therefore, that the best course would be to withdraw the treaties at this time, rather than to have the Senate working on trying to reshape the treaties, as it must do, as must be done. If these treaties stay before the U.S. Senate, the only question will be whether these revisions will l)e made in the form of amendments, which would kill the treaties — require them to go back to the negotiating table — or whether the amend- ments will be by res(>rvations, unilateral statements of our understanding, reser- vations which would be to the resolution of ratification. (218) 219 If agreed to by the Panamanians, it would become effective, and then nnder- standings, of course, do not have to be acquiesced in by the Panamanian Govern- ment. But the only safe way to do it is, if the treaties are to remain before the Senate, to amend the treaties at the basic points that need revision, and not handle it by reservation or understanding. So that if we seeli to correct these defects by amend- ment, reservation, or understanding or through any extrinsic exchange of notes or simihir device, I believe we will have a document that does not tell the con- tract and will have to refer to other documents to find out what was meant by the wording of the treaties. As I say, we ought to have a treaty that in and of itself explains the understanding. I Relieve my view of the matter is shared by a sufficient number of Senators to v.arrant an immediate and complete withdrawal of the treaties by the execu- tive department and a reinitiation of negotiations with Panama by the Depart- ment of State along lines not inconsistent with opinion in the Senate and in the couiilry. Accordingly I do strongly urge and advise the President of the United States forthwith to withdraw these unfortunate, ill-conceived, and poorly drafted doi^'uments. We have reached this state of affairs, Mr. President, because of what I con- ceive to be a fundamental error in the manner in which the treaties were nego- tiated from the outset. I refer to the impenetrable veil of secrecy which sur- roinided the treaty negotiations right up to the moment of their signing 1 month ago on September 7, 1977. This veil of secrecy prevented Senators— and, indeed, the Congress — from having any role whatsoever in advising the President as to the best course of action to follow in striking a bargain with Panama. Perfunc- tory briefings containing little information and seeking no advice, to be sure, were conducted. But, indeed, how could sound advice be given the President in any circumstance so long as the real sul)stance of the negotiations — the real sub- stance of the treaties under negotiations — was wholly unknown to Senators and top secret even at the highest levels of the administration? The authors of the Constitution wisely provided for a check on the unrestrained power of the executive department in foreign affairs by requiring the advice of the Senate and its con.sent by a two-thirds vote to any treaty arrangement with a foreign state. Certainly, at that early time in our history the authors of the Con- stitution sought and contemplated a system under which the Congress and the- Senate took the lead in directing the foreign policy of the country and a systerck under v. hich the Executive carried out the desires of the people in foreign policy as expressed by the people's representatives in Congress assembled. While I can acknowledge that in practice the executive department has more^ and more taken the lead in foreign policy matters, I cannot concede — and it would be improper for the Senate to concede — that we have reached a stage in our his- tory at vrhich the Senate is prepared simply to rubberstamp any foreign policy proposal put on the table by the President. Our country will suffer immeasurably and irreparably if the Senate ever acquiesces to the desires of the executive de- partment to the extent that treaties presented to the Senate are simply rubber- stamped— I am confident the Senate is not going to rubberstamp these"^ treaties. Appi-oval should come, Mr. President, only after probing investigation, full dis- cussion, and, above all. substantial prior advice. So. Mr. President, these proposed Panam.a Canal treaties were negotiated in secret without the involvement of the Congress and hence without the involve- ment of the American people. The price of that secrecy must now be paid. These treaties are not acceptable to the American people, not acceptable to the Con- gress, nor in my judgment are they acceptable to two-thirds of the Senate. Had the advice of the Senate been seriously sought, I am certain that these documents would not have been presented to us in their present form. Had the advice of the Senate been seriously sought. I am certain any proposed arrange- ment with Panama would have provided for an adequate defense of the canal to insure the national security interests of the United States. Had the advice of the Senate been seriously sought, the^e treaties would have established a treaty regime under which the United States was guaranteed the right to take appro- priate action to preserve vital national interests at this key strategic location. Had the advice of the Senate been seriously sought, no treaty would have been negotiated which denied the United States its sovereign right to enter into an agreement with a third state for the construction of a second canal— and we do not have that right for 23 years under the provisions of the treaty. We cannot even negotiate with any other nation in the Western Plemisphere about another canal for the entire life of the first treaty. Had the advice of the Senate been 220 seriously sought, no agreement would have been negotiated which provided for the massive cash payments to Panama now contemplated. Finally, Mr. President, had the advice of the Senate been seriously sought, no treaty would have been concluded which violated basic American constitutional principles by denying to the House of Representatives a role in a proposed cession of U.S. territory. But, Mr. President, the advice of the Senate was not sought, and now that the lesson has been learned, I sincerely hope and trust that the President of the United States will recognize that an error has been made and will take the corrective action I suggest. Few, of any of us would assert that no new treaty with Panama should be con- cluded under any circumstances, but, Mr. President, not these treaties — not these treaties. The mistakes made in this instance are not novel. As many Senators in this Cham])er today undoubtedly recall, perhaps from their own experience, in the past the executive department made a practice of including Senators in nego- tiating delegations sent to foreign lands on missions undertaken for the purpose of discussing important treaty relations. Unhappily, that sound practice has fallen out of use. But never before in the history of our country has the Senate been so completely excluded from any participation in the negotiating process, nor has the Senate ever been so completely denied a role in giving its advice to the Presi- dent on such an important and critical foreign policy matter of great national significance ; never before has the Department of State so completely insulated the President from the Senate and from the people, as has been done in nego- tiating these proposed arrangements with Panama. The exclusion of the Senate and the Congress and the people has been total. The only past situation which might be said to be even remotely comparable was President Woodrow Wilson's decision to ignore the advice of the Senate in negotiating and signing the Treaty of Versailles at the conclusion of World War I. The result of that mistake is well known. President Wilson, a leader whom I have always admired as a great statesman — I was born on his birthday, I will say — made the serious error of assuming he could present the Senate of the United States with the Treaty of Versailles to establish the League of Nations and, on the strength of his own popularity, insist upon its approval. Wilson is reported by some to have stated to Senators in a meeting at the White House during con- sideration of the Treaty of Versailles : '*I do not wish to see an "i" dotted or a "t" crossed." The result, of course, was that he saw the complete defeat of what he con- sidered to be his greatest potential contribution to the history of man and nations. One of the 14 points which President Wilson set forth as a basis for the nego- tiation of the Treaty of Versailles was that he would support only "open cove- nants openly arrived at." In that respect, at least. President Wilson demon- strated his great statesmanship by recognizing the impropriety of secret nego- tiations of secret agreements touching the vital interests of a democratic state. A gangster dictatorship — and the Government of Panama is thought by many, including myself, to be a gangster dictatorship — is able to operate behind closed doors and. indeed, could not operate in the glaring light of public disclosure. But, Mr. President, our country is a free nation composed of free citizens, and nego- tiations by our Government, regardless of subject matter, must be open to debate and full discussion in all forums. In a free country open and frank discussion does not impede foreign policy negotiations ; in a free state, open discussion guar- antees honesty in relations with foreign states and insurer that the executive de- partment does not take a position in foreign policy inconsistent with the will of the people and, therefore, not supportable in action. The President has belatedly taken a half-step in the right direction by seek- ing the consultation of certain Senators in devising so-called clarifying language to clear up only two of many grave flaws in these treaties. But, Mr. President, let us not participate in the charade of pretending that clarifying language can resurrect these dead instruments. These documents are inherently flawed. No amount of understandings with the present dictator of Panama can correct the clear language of these treaties which deny to the United States basic rights vital to our security and commerce. Even an understanding reached with a legitimate foreign government could not correct the clear unambiguous language of these treaties which denies to the United States the right to intervene to insure the neutrality of this strategic canal and which would put our warships in an emergency on the same footing with merchant vessels carrying bananas, because the Panamanians say our war- 221 ships are just going to have to get in line with the other ships. We do not have any priority. So we cannot accept this, of course. Even an understanding with a legitimate democratic government could not correct these flaws. How, then, can w^e expect a so-called understanding reached with a bankrupt government composed of political criminals and petty intriguers, of Communists and Communists dupes, of profiteers, racketeers, and smugglers — how can we except an understanding reached with a government of that ilk to have any validity in the eyes of the people of a free republic governed by freely elected representatives? So, please, spare us the charade. Let us have instead a frank decision that these documents must be withdrawn. Let us have instead an effort thereafter to negotiate openly with the advice of tlie Senate, with the participation of the Congress, and with the informed con- sent of the American people to the end that new proposals may be submitted to the Senate in a form to which the Senate can in good conscience give its con- sent. In that process let us reeducate our negotiators and let the people be. If these treaties are not withdrawn, then certainly Senators would find it proper to continue a detailed analysis of each and every provision of the treaties, of the executive agreements, of the annexes to the executive agreem^ents, of the notes, of the protocols, of the maps, of the appendices, and of all the other docu- ments and evidence bearing on this i subject. The major flaws have already sur- faced ; yet if need be, much work remains to be done ; if need be, many questions must be answered ; if need be, the full light of public knowledge must illuminate every nook and cranny of these complicated documents and of the complicated procedure by which they were negotiated. I hope that process will not be neces- sary. Certainly, we have learned enough already to warrant the step I recommend. The Acting President pro tempore. The time of the Senator has expired, Mr. Allen. Mr. President, I thank the Chair. BRILLIAXT U.S. NEGOTIATORS IX DIPLO^^IATIC COUP SECURED ^'COXCESSIOX'" ALREADY PROVIDED IX 1903 TREATY [From the Congressional Record, Oct. 12, 1977 — S 16987] The Panama Canal Treaties — Xo, 15 Mr. Allen. Mr. President, this is the 15th speech I have made on the Senate floor in opposition to the Panama Canal Treaties. I do not believe that in the course of my remarks I have been redundant, because tliere are so many defects in the treaties that I have been able to point out something new in each of the speeches I have made. Mr. President, during my testimony in opposition to the Panama Canal Treaties before the Senate Committee on Foreign Relations, one of the distinguished mem- bers of the committee, Senator, Sarbanes, raised an issue to which I have since given considerable study. The distinguished Senator inquired whether Panama could now grant to a third country the right to construct a canal between the Caribbean and the Pacific through the territory of Panama, excluding obvi(msly the United States territory comprising the Canal Zone. I did not then know the answer to the distinguished Senator's inquiry, although I did indicate that to the best of my knowledge, the treaty of 1903 did contain some provision affecting the ability of Panama to grant a canal concession to a government other than the United States. Having since looked into the matter, I can now report that under article Y of the treaty of 1903, the United States has already in perpetuity a monopoly on any interoceanic canal construction across Panama, either inside or outside the Canal Zone. Mr. President, the Department of State has repeatedly touted the brilliance of our negotiators in securing from the Panamanians an alleged agreement not to construct any new canal in the territory of Panama without the consent of the United States, at least not until after the year 3999. This so-called major diplo- matic coup is embodied in article XII, paragraph 2 of the canal treaty wherein appenrs the following: "The United States of America and the Republic of Panama agree on the following : "(a) X^o new interoceanic canal shall be constructed in the territory of the Republic of Panama during the duration of this Treaty, except in accordance with the provisions of this Treaty, or as the two Parties may otherwise agree ;" That is In the proposed new treaty. I find this provision ambiguous, but the Department of State ns«;erts that our negotiators obtained this so-called concession from the Panamanians in return for our incredible agreement not even to negotiate with a third stnte for the construction of a new interoceanic canal anywhere in the Western Ilemispliere without express Panamnnian consent. In other words. Mr. President, the Dei)nrt- ment of State asserts that the quid ]>ro quo for our agreement not to construct any new canal except in Panama without the consent of the Panamanian dicta- tor — the quid pro quo for that incredible concession is. or purports to bo. this clause I have just quoted, which allegedly would prevent the Panamanians from constructing a canal with Soviet assistance or the assistance of some other unfriendly government. P>ut, Mr. President, the Ignited States already, in perpetuity, can prevent any third nation from constructing a new canal in the territory of Panama. So we have gained absolutely nothing from this supposed Panamanian concession. They are not conceding anything. It is already provided in the 1903 treaty. Mr. President, the plain fact is that the Department of State has set up a sham argument to justify its folly in allowing the Panamanians to tie our hands throughout the term of this proposed canal treaty and to excuse the — and I am gf)ing to be blunt about this, INIr. President — to excuse the stupidity of requiring the consent of a petty dictator before the United States of America can even negotiate with another nation for an interoceanic canal in the Western (222) 223 Hemisphere. This purported justification, this quid pro quo, is a sham because it is not a concession made to the United States by Panama, simply because the United States already has full authority to insist that no other nation construct in Panamanian territory a canal between the oceans. Article V of the Isthmian Canal Convention of 1903, the Hay/Bunau-Varilla Treaty, reads as follows : "The Republic of Panama grants to the United States in perpetuity a monopoly for the construction, maintenance and operation of any system of communication by means of canal or railroad across its territory between the Caribbean Sea and the Pacific Ocean." Mr. President, there is no ambiguity there. When treaties were drafted in those days, the documents spoke for themselves. The executive department in those days apparently did not have much tolerance for sloppy draftsmanship, but we here in the Senate today feel somewhat like Wendy and John wandering around in never-never land, trying to figure out just w^hat these proposed new treaties actually do mean. Mr. President, the Senate did not have that problem in 1903, and there is no doubt that under the treaty of 1903, the United States can already insist that no third nation construct a new canal in Panama. In addition, Mr. President, there can be no doubt that the right given to the United States, the monopoly given to the United States, is in perpetuity. I might add parenthetically, Mr. President, that although the treaty of 1955 did in some respects modify article V of the treaty of 1903, the modifications in the treaty of 1955 only affect the monopoly given to the United States over rail- roads constructed between the two seas and do not in any way affect our exist- ing monopoly with respect to any new strategic interoceanic canal which might be contemplated. Incidentally, too, Mr. President the treaty of 1955 itself, in extinguishing the provision of article V with respect to railroads, still provides as follows : "In view of the vital interest of both countries in the effective protection of the Canal, the High Contracting Parties further agree that such abrogation is subject to the understanding that no system of interoceanic communication within the territory under the jurisdiction of the Republic of Panama by means of railroad or highway may be financed, constructed, maintained, or operated di- rectly or indirectly by a third country or nationals thereof, unless in the opin- ion of both High Contracting Parties such financing, construction, maintenance, or operation would not affect the security of the Canal." Therefore, even after allowing the abrogation of article V of the treaty of 1903 insofar as it affected railroads, our negotiators in 1955 nevertheless insisted that the United States be given a veto over any proposed construction of any rail- roads or, for that matter, highways, which connected the two oceans and which might in the judgment of the United States adversely affect the security of the canal. Mr. President, Senators ought to review these past treaties — and I am sure many, if not all. have already done so — because a review of these past treaties shows the great care that negotiators for the United States have taken — at least up until now — in protecting the security of this vital international water- way. Our negotiators in the past have not taken lightly their responsibility to secure to the United States the control and defense of the Panama Canal, be- cause our past negotiators have fully recognized the dire adverse strategic impact of permitting the effective control of the Panama Canal to fall into the hands of another nation or for that matter even permitting the effective control of any means of transit through the Isthmus of Panama to fall under the control of any power unfriendly to the United States. But we have a new breed of negotiators working for us now, Mr. President, and they have seen fit to negotiate away our right to construct a sea level canal or a second canal in Nicaragua or in any other country, for example, in ■Mexico, at the Isthmus of Tehuantepec, all in return — and I use that term ad- visedly — all in return for the sham concession of the Panamanians in agreeing not to permit another country to build a canal in Panama for the 23-year term of the proposed Canal Treaty. Quite a concession, Mr. President. We extinguish a monopoly in perpetuity and they agree, in a rather loosely drafted provision, that no new canal will be constructed in Panama except in accordance with the terms of the proposed Canal Treaty — terms which do not in themselves forbid Panama to grant to the Soviet Union or some other country a right to construct a canal in Panama even within what is now the Canal Zone. Then, too, Mr. President, Senators should note that the proposed Canal Treaty would abrogate entirely the treaty of 1955 which grants to the United 224 states de facto control over the construction in Panama of interoceanic strategic highways or railroads which might in some way tend to damage the security of the canal or harm the security interests of the United States. Should this pro- posed Canal Treaty receive Senate consent, nothing whatsoever, even during the 23-year term of the treaty, would prohibit the Marxist dictatorship in Panama from entering into an agreement with Cuba, or with the Soviet Union, or with Red China, or with East Germany, or with North Korea, or with any other regime now opposed to the interests of our country — nothing — nothing would prevent Panama from agreeing to the construction of a major strategic highway or rail system with corresponding port facilities at either terminus for the purpose of threatening whatever defense forces of the United States might re- main in Panama during this proposed 23-year term of surrender. The good work of the conscientious negotiators for the United States who have represented us in the past in dealings with Panama would pretty much go down the drain if these treaties are implemented. The careful drafting of so many past treaties, protocols, and conventions designed to protect our strategic position in Panama would be, with the stroke of a pen and a two-thirds vote in the Senate, destroyed for all time. The provisions of these proposed treaties which would destroy this past good work have not received to date sufficient attention. In our rush to examine the provisions of the treaty purporting to give us rights to defend the canal and rights to maintain the neutrality of the canal, many of us have overlooked the grave damage done to the existing fabric of our relations with Panama by the wholesale abrogation of virtually all important agreements reached with Pan- ama over the past 74 years. Using more or less a meat-ax technique, our negotia- tors have wiped the slate clean, eliminating presumably both the good and the bad by specifically abrogating the treaty of 1903, the treaty of 1936, the treaty of 1955 and : "AU other treaties, conventions, agreements, and exchanges of notes between the United States of America and the Republic of Panama, concerning the Pan- ama Canal which were in force prior to the entry into force of this Treaty; and * * *" In other words, anything good in the past treaties will be wiped away, any con- cessions made are going to be wiped out, and we are going to start anew. Listen to this, Mr. President, just to make sure there are no scraps or pieces around that might protect the interests of the United States : "Provisions concerning the Panama Canal which appear in other treaties, not just these particular treaties with direct reference to Panama but in oth*^r treaties, conventions, agreements, and exchanges, "conventions, agreements and exchanges of notes between the United States of America and the Republic of Panama which were in force prior to the entry into force of this Treaty." So that ought to pretty much do the job, Mr. President. Whatever has been done on behalf of the United States during this 74-year period is going down the tubes. Part of the package is the provision giving to the United States a monop- oly over canal construction in Panama. Also stated for elimination are the I)rovisions allowing us a right of refusal over any strategic interoceanic com- mimications system which might damage the national security interests of our country or pose a threat to the canal. Finally, Mr. President, Senators might rightly insist that we must have gained something in return for abrogating or nullifying three-quarters of a century of diplomacy. In my judgment, we have gained only ambiguous provisions which can be interpreted as either party chooses — either to commit the Panamanians not to construct a new canal with Soviet aid only during the 23-year term of the proposed canal treaty or to permit construction of a new interoceanic canal in Panama not inconsistent with the terms of the new proposed treaty, which terms do not in and of themselves prohibit such construction and which terms, with complete clarity, only commit the United States and Panama to study jointly the feasibility of a new sea level canal project. Thus, Mr. President, we receive again only ambiguities to replace ironclad pro- tections. Perhaps this proposed provision is interpreted by the present Pana- manian Government in the same manner it is interpreted by our own Depart- ment of State. But what of it? The Panamanians have thus far shown little inclination to accept the interpretations given to these documents by the De- T>artment of State, and even assuming there has been a meeting of minds on this particular provision, its lack of clarity would no doubt be a seed of dispute I)]anted in the fertile soil. I thank the Chair, and I suggest the absence of a quorum. HEEOIN CONNECTION [From the Congressional Record, Oct. 13, 1977— S17161] The Panama Canal Treaties — No. 16 Mr. Allen. Mr. President, I am going to count this my speecli No. 16 on the Panama Canal since the treaties were signed by the two heads of state. Mr, President, I read today in the Washington Star a very interesting article touching on a matter about which perhaps all Senators should become knowl- edgeable. The article reports that U.S. Department of Justice sources have con- firmed that there is a sealed narcotics indictment in the eastern district of New York against one Moises Torrijos, brother of the present Panamanian Dictator Omar Torrijos. The Washington Star newspaper story does not state the sub- stance of the indictment, but it does report that the indictment has never been disclosed allegedly, because Moises Torrijos has not returned to the United States since the time the indictment was issued, apparently some time during 1972. You know, Mr. President, I wondered at the time of the signing of the Panama Canal treaties why Moises Torrijos was not in attendance inasmuch as he is currently Ambassador to Spain and presumably would have wished to share in the celebrations held dow^n at the Pan American Building. At the time, it did seem strange that since diplomats from every Spanish-speaking country in the world did seem able to attend, yet the brother of the present head of the Pana- manian Government found it inconvenient to share in the festivities. Sometimes, Mr. President, I am slow to get the full picture, but I am begin- ning to understand the answers to some of the questions that have been troubling me, and there have been plenty of questions, Mr. President, about these treaties. Since reading the article in the Star, I have had brought to my attention certain other bits and pieces of information which perhaps should be further high- lighted or recalled. Apparently, Mr. President, back some time in early 1972 or perhaps late 1971, Rafael Richard, the son of the Panamanian Ambassador to Taiw^an — I believe the correct date w^as July 8, 1971 — was arrested in New York carrying luggage containing some 150 pounds of heroin. Mr. Richard, who was fairly young for a diplomat, was traveling on a diplomatic passport signed by Mr. Juan Tack, whom Senators will recall negotiated with then-Secretary of State Henry Kissinger for the Kissinger-Tack agreement which formed the frame- work for subsequent negotiations leading to these proposed treaties now being considered in the Senate. But Mr. Richard was not on his first visit to the United States; he was instead on his fifth visit. And according to a New York Times article by Benjamin Welles, dated March 15, 1972. Mr. Richard had brought into the United States 150 pounds of heroin each trip. But, Mr. President, let us see what happened to Mr. Richard. According to the New York Times — and, of course, that is the only information I have to go on as to this particular item, the information available in the newspapers — Mr. Richard w^as given the full privileges of diplomatic immunity and api^arently allowed to leave the United States without further question. Mr. Richard's uncle was not quite as lucky. As reported in the Times, his uncle, Guillermo Gonzalez, and I quote, "an intimate and fonner bodyguard of Moises Torrijos," was convicted of a felony charge related to heroin smuggling and sentenced to seven years in prison. If Mr, Gonzalez is in prison, perhaps he w^ould know more about this matter, but I do not know whether he has been required to serve his full term and is, therefore, still incarcerated. About this same time, Mr. President, three American narcotics agents were ordered expelled from Panama by Mr. Juan Tack on 24-hours notice. Mr. Tack asserted that the men, who were agents of the U.S. Bureau of Narcotics and Dangerous Drugs, were interfering with "the internal affairs of Panama." Some internal affairs. Mr. President, I might say, and some diplomats. So, Mr, President, today we learned that there is a sealed indictment waiting for Mr. Moises Torrijos, Ambassador to Spain, waiting for Mr. Moises Torrijoa ( 225 ) 226 Tip there in the eastern district of New York, waiting up there for some 5 years now with no public disclosure whatsoever that Ambassador Torrijos was being sought by our Government. Mr. Moises Torrijos may have known he is being sought by our Government. He found it convenient not to be in the United States over a 5-year period on any occasion. But, Mr. President, the American people did not know and the American people have got to have sharp eyes to pick this story up off the fifth page of the Washington Star to try to piece together just what is going on. Now, there has been another recent sealed indictment, not 5 years old, but a fairly new sealed indictment which has recently been made entirely public. That indictment involves one Mr. Tongsiui Park. Tongsun Park has shown no great inclination to return to the United States either, and quite properly the citizens of the United States have been advised that Tongsun Park is under indictment. Yet. Mr. President, Moises Torrijos is treated differently. I hold no brief for Mr. Tongsun Park, but it does seem he received one type of treatment and Moises Torrijos another. On Wednesday, I talked to some extent about the ironclad language used by our negotiators in securing the Panama Canal Treaty in 1903. I i)ointed out that our negotiators back in those days could and did draft a document which re- flected a meeting of the minds, a document without ambiguity, and a document which could be enforced. I am pleased to report to the Senate. Mr. President, that the year following the negotiation of the treaty of 1903, our Government took the prudent step of negotiating with Panama a document entitled "A Treaty for the Mutual Extradition of Criminals." This extradition treaty of 1904 is also an ironclad document without ambiguity. The preamble reads this way, Mr. President : "The United States of America and the Republic of Panama, being desirous to confirm their friendly relations and to promote the cause of justice, have re- solved to conclude a treaty for the extradition of fugitives from justice between the United States of America and the Republic of Panama." So, they set forth the purpose of this treaty pretty clearly there in the pre- amble. Article I of this treaty reads this way : "The Government of the United States and the Government of the Republic of Panama mutually agree to deliver up persons who, having been charged with or convicted of any of the crimes and offenses specified in the following article, committed within the jurisdiction of one of the contracting parties, shall seek an asylum or be found within the territories of the other: Provided, that this shall only be done upon such evidence of Criminality as, according to the laws of the place where the fugitive or person so charged shall be found, would justify his or her apprehension and commitment for trial if the crime or offense has been there committed." We have been advised by the Washington Star that there is a sealed indictment handed down by a grand jury in the eastern district of New Yoi-k agninst Am- ])assador Moises Torrijos. but we do not know what the charges are. we do not know what the evidence is. So. IMr. President, we are left to s])eculatp whether this treaty of 1904 would ai)plv. Presumably, the crime charged would be a fel- ony. Presumably, the crime charged would justify his apprehension and com- mitment for trial if the crime or offense charged had been committed in Panama. IMr. President. T do not know where Ambnssador Moiscj Torriios is located today. Perhaps he is at his post in Spain, and perhaps the Department of Justice ought to s«^^e if wo have an extvndition trefity with Spain as we do with P;inamn. But one tb^'ng is certain. Mr. President, wlien T have referred to the regime in l)Owor in Panama as a gangster dictatorshiiv T have not used th.e lerm liglitly. Mr. President. T ask unanimous consent tl^at an article from the Wash.ington Stir and an article from the New York Times be printed in the REconn. Tliore being no objection, the articles were ordered to be printed in the Record, as follows : TTnited Stater Indicted Brother of Torrt.tos, Source in Justice Department Says The brother of Panamanian chief of state Omar Torrijos was indicted in New Yorlc five years ago on federal narcotics smuggling charges but U.S. authorities havo never been able to arrest him. Justice Department sources have confirmed. "There is a sealed narcotics indictment in the Eastern District of New York" against Torrijos' brother Moises, a knowledgeable department official said yes- terday. 227 "It has never been unsealed because we have never found him back in this country to arrest him," this source said. The Miami Herald reported yesterday that Atty. Gen. Griffin Bell told Presi- dent Carter about a variety of allegations that members of Torrijos' family have been involved in smuggling drugs to the United States. Department spokesman Robert Havel confirmed that Bell discussed the matter with Carter on October 3. After inquiries from members of Congress, Bell briefed Carter on the situation. The President agreed with Bell's recommendation that the Justice Department provide the same briefing to congressional leaders, tiavel said. PIousE Member Charges Xarcotio Smuggling Inquiry Touches "Highest Levels" of Panama Government (By Benjamin Welles) Washington, March 15 — Representative John M. Murphy charged today that an investigation into heroin smuggling into the United States had touclied the "highest levels" of the Government of Panama. Mr. Murphy, Democrat of Staten Island, who is chairman of a House sul)com- mittee on the Panama Canal, named Juan Tack, Panamanian Foreign Minister, and Moises Torrijos, Panamanian Ambassador to Spain, as the officials alle.u'edly involved in narcotics. Mr. Torrijos is a brother of Brig. Gen. Omar Torrijos, ruler of Panama. Jose Antonio de la Ossa, the Panamanian ambassador here, issued a statement vigorously denying the charges. He suggested that ^Nlr. ^Nlurphy was rtniving old charges because he had been "cold-shouldered" by Panamanian officials dur- ing his recent inspection visit to the Panama Canal. He suggested too that Mr. Murphy was using tlie drug charges to impede prog- ress toward a new Panama Canal treaty which if negotiated, would restore "sov- erignty" over the Canal Zone to the Panamanian Republic. Late yesterday Mr. Tack ordered the expulsion of three American narcotics agents from Panama within 24 hours. He asserted that the men, agents of the United States Bureau of Narcotics and Dangerous Drugs, had "intervened in the internal affairs of Panama." The expulsion followeil initial reports two days ago in the syndicated column of Jack Anderson linlving Mr. Tack and Mr. Torrijos with narcotics smuggling. The first hint of the developument came a week ago in a brief allusion by the Panama Canal subcommittee to "confidential" information passed to the sub- committee by the Bureau of Narcotics. United States officials involved in the treaty negotiations, which have been under way here since June, declined to speculate whether the flareup would jeopardize the talks. Panamanian diplomats who denied recent reports of an "impasse," said that they thought the talks would not be fundamentally affected. Mr. Murphy said in an interview today that he and other subcommittee mem- bers had been briefed here on Jan. 24 by Customs Bureau agents placed at their disposal by Myles Ambrose, then Director of the Treasury's Bureau of Customs and now President Nixon's special consultant for drug abuse enforcement. The subcommittee was then preparing to visit Panama and the Canal Zone. A passage from the uniuiblished report of the subcommittee dated March 8 and entitled "Overview of the Narcotics Problem in Panama" cited a recent drug-smuggling case involving Panamanians and stated in part : "The [customs] briefing team concluded that based on the customs investiga- tion this case reached into the highest levels of Panamanian officialdom and in- cluded Moises Torrijos, the brother of Gen. Omar Torrijos and the Panamanian Foreign Minister, Juan Tack." The subcommittee report also asserted that this involvement "was confirmed by B.N.D.D. officers in the Republic of Panama on Feb. 23 during the subcom- mittee briefing in that country." The State Department said that the bureau had denied "in writing" that its agents had implicated Mr. Tack or Mr. Torrijos in its briefings of "the House subcommittee. A spokesman for the Customs Bureau said that it had nothing to add to what it had told Mr. Murphy and his subcommittee colleagues. Charles W. Bray 3d, the State Department spokesman, said that the depart- ment considered the expulsion of the three agents, Wilbur Plase, Ruben Monzoii and Charles W. Cecil Jr., as unwarranted. 228 Mr. Murphy, a graduate of West Point and a decorated infantry commander in World War II and the Korean war, cited growing drug abuse among Ameri- can servicemen and dependents in Taiwan, Okinawa, the Philippines, Vietnam, and, especially, Panama. The subcommittee recalled details of two recent drug-smuggling cases that, it contended, involved Mr. Tack and Mr. Torrijos. One concerned the arrest in New York last July 8 of Rafael Richard, son of the Panamanian Ambassador to Taiwan. Mr. Richard who was 23, was travel- ling on a diplomatic passport signed by Mr. Tack, which gave him immunity from prosecution. At the time of his arrest he was on his fifth visit to the United States, during each of which he had brought about 150 pounds of heroin, the report said. He was with Guillermo Gonzales, his uncle, an intimate and former bodyguard of Moises Torrijos. Mr. Gonzales, who was believed to be the ringleader, was convicted and sen- tenced to seven years. The report said United States sources believe that Mr. Tack and Mr. Torrijos were not only sanctioning but were abetting this smug- gling. The other case involved Joaquin Gonzales, former international transit chief of Tocumen International Airport at Panama, who was indicted in the smug- gling of $l-million worth of heroin to Dallas. Mr. Gonzales was arrested by the United States authorities Feb. 6, 1971, when he entered the Canal Zone to attend a baseball game. He was flown to Texas to stand trial and was sentenced to five years. Mr. Tack exerted strong but unsuc- cessful diplomatic efforts to have him released, the subcommittee said. UNSIGNED, MEANINGLESS, NONBINDING, AND CONFUSING DOCUMENT [From the Congressional Record, Oct. 19, 1977 — S172o4] The Panama Canal Treaties — No. 17 Mr. Allen, Mr. President, over the past weekend the news media covered ex- tensively the visit to the White House made by Panamanian Dictator Omar Tor- rijos. The dictator apparently had been called in for a conference with the President to discuss the right of priority passage for the U.S. Navy and the right of the United States to intervene to guarantee canal neutrality — two of the many ambiguous provisions found throughout the proi>osed Panama Canal Treaty and the proposed Neutrality Treaty. Other matters, possibly involving the indictment of Moises Torrijos. the dictators brother, may also have been un- der discussion ; however, press accounts did not allude to that possibility. In any event, at the conclusion of the conference, amid much fanfare and jubila- tion, yet another Panama Canal agreement was announced allegedly clearing up the two problems under discussion. At first, many thought that the agreement was at least a signed document. But we soon learned that the purported agreement was, in fact, an unsigned document wholely devoid of any binding legal effect. But, Mr. President, even assuming that this document had been signed and even assuming that this document could, therefore, be treated as an executive agree- ment, or a reservation to treaty — I assume that is what it is going to be called if it is ever agreed to by our negotiators and sent up to be added to the treaty— d(X^s this document clear up ambiguities or does it simply create more? Clearly, Mr. President, we are in w^orse shape now^ than we were before the dictator's visit. For example, on the question of the right to intervene to guarantee the neutrality of the canal, the document reads : "The correct interpretation of this principle is that each of the two countries shall, in accordance with their Tespective constitutional processes, defend the canal against any threat to the regime of neutrality, and consequently shall have the right to act against any aggression or threat directed against the canal or against the peaceful transit of vessels through the canal." Now, that does not sound too bad, but look at this, Mr. President, that provi- sion is followed by this language : "This does not mean, nor shall it be interpreted as a right of intervention of the United States in the internal affairs of Panama. Any United States section will be directed at insuring that the canal will remain open, secure, and acces- sible, and it shall never be directed against the territorial integrity or political independence of Panama." So. the dictator is seeking here to protect and preserve his dictatorship. So. Mr. President, here we are back at square 1 — more confused than ever. Does this language mean that the United States has the right to intervene within Panama to protect the canal against all aggressors, including Panama. That is a possible aggressor, Panama, in entering into these treaties, does not guarantee that there will not be insurrection, sabotage, violence, demonstrations. So one of the aggressors may well be Panama. Or does it mean that the United States may take action only outside Panama against third countries violating canal neutrality? Perhaps, on the other hand, it may mean that the United States can act within Panama to defend the canal's neutrality, but only against third nations. One guess is as good as another. Mr. President, why can we not have a document which is clear and unambigu- ous on its face? Do they not have any lawyers down at the Department of State who are capable of drafting a simple contract? That is what this really is : a high level contract between nations. Mr. President, they need to hire some lawyers down there who know that a binding contract to be performed over a period of years ought at least to be a signed document. We do not have that at this time. (229) 230 These proposed treaties are at least signed, but they themselves are obviously of no value in understanding our rights, since all tliese extraneous documents keep having to be drafted by platoons of lawyers at the behest of ill-advised negotiators. Certainly, this latest document does nothing but add to the con- fusion. Yet, Mr. President, here is former Ambassador Linowitz telling the press at the time the document was announced, and I quote from his remarlvs : "There has never l)een any misunderstanding between President Carter and General Torrijos as to the exact meaning of the treaties. The statement is in- tended to put to rest any misunderstanding as to what is intended under the treaties." There must have been some ambiguity if they had to issue a statement to clear up the ambiguity. It would be difficult to see how there was no misunderstanding and now find the issuance of a statement to clear up ambiguity. You know. Mr. President, I am glad former Ambassador Linowitz thinks that President Carter and Dictator Torrijos have had no misunderstanding over the exact meaning of the treaties because that at least guarantees that two ijeople on the face of the Earth can read these treaties and make some sense out of them. But what about the rest of us? What about future Presidents? What about fti- ture dictators — or, hopefully, what about future elected Panamanian presidents — which they do not have now, of course? What are they going to have to go on? If ratified, these treaties could stay in effect for many years and would be the best and only evidencie of what was actually agreed. But it is indeed comforting. Mr. President, to know that at least the President and the dictator, according to former Ambassador Linowitz anyway, do mutually understand the exact mean- ing of these quote baffling provisions. Many of us do wish they would let us in on the secret. kSo, Mr. President, former Ambassador Linowitz says there is a meeting of minds ; let us liear wliat Dictator Torrijos had to say no sooner than he left the room where this so-called agreement was promulgated. Dictator Torrijos sum- marized the meaning of this new document this way : "If a great power attacks the canal or puts the canal in danger, it is the right of the United States to go and defend the canal. But it does not have the right to intervene or interfere in the internal affairs of Panama." So, Mr. President, already the Panamanians have got their own version of the meaning of the so-called agreement, and I am sure the Department of State will soon too have its own interpretation. I might say Mr. Torrijos boasted when he got back to Panama that he had not signed a document, he had not even signed an autograph when he was in Wash- ington, conferring with the President ; so he is boasting of the fact that he has not signed anything. Looking at the language of the document, I must say that Dictator Torrijos may well be correct in his assessment of this unsigned paper. As I read the docu- ment, it seems to be saying that the United States can take action away from Panama to defend the regime of neutrality which would be established under the neutrality treaty. But, of course, that right would be close to usefulness if the United States did not also have the right to defend in i)lace the canal itself. In other words, if Panama — if Panama decided the canal would no longer be neutral because of an alliance formed with another nation, presumably with Cuba or with the Soviet Union, or if Panama decided that it would be convenient to impose discriminatory tolls, or if Panama decided to make difficult the passage of ships of particular nations, Dictator Torrijos or his dictator successor would be in a position to assert that, all neutrality aside, the United States had no right — no right whatsoever — to intervene within Panama or to interfere with the internal policies and affairs of Panama. Here we are, Mr. President, back at square one. What have we actually gained, INIr. President, by this latest diplomatic tri- umph—and I might add, Mr. President, I do not believe the country can take too many more diplomatic coups in our dealing with Panam.-i. What have we gained? True, we all read (he headlines boldly proclaiming that the President and the dic- tator had agreed on canal defense rights, but once again, as the truth leaks out, we learn that the document is not even signed, that the document itself is ambigu- ous, that the document creates problems, Mr. President, and does not solve problems. This latter point is particularly clear when a thorough examination is given to the language purporting to clarify the rights of American warships to rapid transit of the Isthumus. This language reads as follows : 231 "In case of need or emergency, warships may go to the head of the line of vessels in order to transit the canal rapidly." What this unsigned document does not say, however, is who gets to decide what is a case of need or what is a case of emergency. Panama might have one idea about what constitutes an emergency situation and we might have another idea. Why not say it, Mr. President, in simple terms? I suggest the following, which may well be offered as an amendment to the treaty when it comes up here, in the Senate : "Cnited States warships have the right of priority passage at any time and may at all times proceed ahead of waiting merchantmen." No, Mr. President, I guess that is too simple so we have elected instead in this unsigned, meaningless, uonbinding, and confusing document to foment still fur- ther potential disagreement by apparently leaving to the Panamanians the right to determine what emergency or which case of need is sufficient to justify priority passage by American war vessels. I think I shall change this word that I have suggested, "waiting merchantmen" to say merely "waiting vessels" rather than merchantmen ; that U.S. warships have the right of priority passage at any time and may at all times proceed ahead of waiting vessels. But listen, Mr. President, what former Ambassador Linowitz is reported to have said on this subject : "We are hoping it will lay to rest the questions that have been raised so that we can go forward with the approval of the treaties. I don't think, personally, that any further action will be required." Former Ambassador Linowitz does not seem to be paying too much attention to what is going on over here on the Senate floor, Mr. President, because if he did. he would know that this unsigned, ambiguous document clarifies nothing and does nothing whatsoever to address the many, many other serious — indeed, fatal — defects found throughout the proposed treaties. I would suggest, Mr. President, that the Department of State pay closer atten- tion to what is being said over here in the Senate because sooner or later, the Department of State has to face up to the simple fact that these treaties are so poorly drafted throughout that the Senate could not properly consent to their ratification. Even proponents of a canal giveaway recognize that fact. Even pro- ponents recognize that both treaties must be rewritten in their entirety. In my judgment, Mr. President, the Senate should undertake this onerous task. The Senate should, by amendment, rewrite these disastrous proposals now under study in the Committee on Foreign Relations. The Senate should, acting as the Committee of the Whole, sit down to the hard work of undoing the damage and unraveling the mystery of why the Department of State was incapable of reach- ing an agreement with the Panamanian negotiators which could, at a minimum, protect the vital national security interests of our country. Unsigned documents clarifying nothing, understandings of no binding legal effect, reservations of rights not agreed to by the other party, are not going to be sufficient. Fanfare and hoopla in the press is not going to be sufficient. The only course of action is extensive and thorough page-by-page, paragraph-by-paragraph, gentence-by-sentence, word-by-word consideration and amendment of each and every provision of both treaties. Both treaties, Mr. President. This process will be long and tedious, very long and very tedious, but if these treaties are not soon withdrawn, it is a duty, Mr. President, we must soon undertake inasmuch as others have not. We must unfortunately also go ahead with the painful process of resolving all of the questions surrounding the peculiar manner in which the treaties were negotiated. ]Mr. President, I feel that, as time goes on. we shall see other statements to clear up other ambiguities. I feel that, in the final analysis, we are going to have to amend these treaties here, on the floor of the Senate, and send this amended treaty back to the negotiators to serve as a guideline for further negotiation. Mr. President. I appreciate the Chair's lenience. I know I have consumed all my time. I yield the floor. 99-592—78 16 PAXAMANIAX LEADERS GET ASSETS— U.S. TAXPAYERS GET LIABILITIES [From the Congressional Record, Oct. 20, 1977 — S17376] The Panama Canal Treaties — No. 18 Mr. Allex. Mr. President, on several occasions I have brought to the attention of the Senate the various devices and schemes proposed by our negotiators to deliver cash to the Panamanian dictator without the necessity of including those means and methods in the terms of the treaties and without the necessity of seeking, through the constitutional process, appropriations for such purposes in the form of legislation originating in the House of Representatives. In short, Mr. President, I have already previously and frequently expressed my own sense of outrage at the manj' and varied methods employed to circumvent the Constitution both with respect to appropriations and with respect to the right of the Senate to advise and consent to treaties without action by the House of Representatives providing for the disposition of the property of the United States, that is, the Canal Zone and the Panama Canal. But unfortunately, there is more to discover. We have seen how soft loan agreements are proposed to be used to funnel sums to the Panamanian dictator ; we have been how the successor corporation to the Panama Canal Company would be pillaged by mandated payments to Panama : we have seen how commerce will be burdened by increased tolls levied to provide for loan repayment to the large international banks ; we have seen how the present Panama Canal Company would be stripi>ed of its most profitable assets, such as the Panama Canal Railroad and the Panama Canal refueling facilities, in order to provide ready cash direct to General Torrijos : we even have seen how U.S. taxpayers would be asked to pay $10 million per year to Panama for the privilege of being subjected to the oppression of the so-called legal system of the dictator — and certainly that is the height of irony, Mr. President, that upon our delivery up to Panama of U.S. territory and property, we would thereafter pay Panama to oppress our own 37,000 U.S. citizens now living in the Canal Zone. Mr. President, we have seen all these thinsrs, and we have accepted the opinion of Nicolas Ardito Barletta, Panamanian Minister of Economic Planning, that the projected cash flow over the 23-year term of the Canal Treaty will be $2,262 billion in 1977 dollars. All this. Mr. President, without a single appropriation and in large measure without even Senate advice or consent. You know, Mr. President, the principal check on the power of the executive branch, a check heretofore carefully and jealously guarded by the Congress, is the power to appropriate or, more properly, the power to refuse to appropriate from the Treasury. I see the distinguished Senator from Idaho (Mr. Cnn^cn), the second-ranking majority member of the Foreign Relations Committee. He has been a strong advocate through the years of the Congress using the power to control the purse strings of the Nation to influence foreign policy. Unquestionably, the war in Vietnam was brought to a close because Congress refused to appropriate further tlio carrying on of that war. So we have power, which ha«! been carefully and j^'alously guarded by the Congress, to appropriate, or. more approi)riately, in this case, we should have the power to refuse to appropriate, from the Treasury. The deliberate circumvention of Congress in forking over these vast sums to a roprehonsible dictator is beyond the pale, cannot on any grounds be supported, and would certainly itself alone be grounds for defeat of any elected oflJicial who l>ormitted the T)eople of the United States to be plundered by the unthinking for tho honefit of the unjust. ^rr. President, in our prior discussions of these rip-offs. we may have ovpt- 1of)kp(] by accident an item amounting to some $319 million which our negotia- tors propose to, in effect, extract from American workers and American tax- payers. To be sure, ip the grandiose schemes conceived down there at the Depart- (232) 233 ment of State $319 million must look like a drop in the bucket. But frankly, Mr. President, it galls me that our negotiators must have figured we here in the iSenate would not even notice this particular strategy. Mr. President, the Panama Canal Company is a corporate entity run as a busi- ness and subject to the Corporation Control Act of 1950. At present, the un- recovered investment of the Company is $319 million. That is what the Canal Company owes the U.S. Treasury as the balance of the cost for building the canal. This unrecovered investment is, in effect, a debt to the U.S. Treasury. Since the opening of the Panama Canal, this debt has produced over the years some $(542,080,000 in interest payments from the Canal Company into the U.S. Treasury. Additionally, Mr, President, $40 million of the principal sum initially owed to the Treasury has also over the years been repaid. These payments of principal bave occurred as follows: .$10 million in 1955: $5 million in 1956; $10 million in I960 ; $10 million in 196S ; and $5 million in 1969. Annual interest payments have also been quite substantial, and in 1976, Mr. President, the Panama Canal Com- I)aiiy paid to the Treasury $16,0(X),000 in interest on the present outstanding unpaid principal of $319 million. So, Mr. President, the operator of the canal owes the U.S. Treasury $319 mil- lion. What we are doing under the treaties, is giving Panama this canal on which $319 million is still owed free from any indebtedness whatsoever, giving them free and clear title, not requiring the $319 million to be paid. This is a business, Mr. President, a business which has a liability, a business which has over the years reduced its debt and has paid interest into the Treas- ury for the benefit of U.S. taxpayers. Certainly, if Panama should take over the canal under these treaties, why should they not be required to pay off the mortgage, so to speak? If a person has a house on which there is a mortgage and that person gives the house to someone, would it not be proper for them to pay off the existing mortgage on the house rather than to make a gift of the house free and clear? That is what we are being called upon to do. The Canal Company, the opera- tor of the canal, owes the U.S. Treasury, owes the American people. .$319 million. But as we give the canal to them under the treaties, we do not require this $319 million to be paid. The operation of the Panama Canal is a profitable business. They are able to keep up their interest payments ; they are able to make their principal payments. If we give the canal to them, why not give it to them subject to this indebtedness so that the U.S. Treasury could at least get back a portion of the cost of the canal? Do not give it to them free and clear ; give it to them subject to existing mort- gage, shall we say. But let us look, ^Vlr. President, at what our negotiators have worked out with the Panamanians. Bear in mind, Mr. President, that our negotiators are proposing to give away the Panama Canal Zone, the Panama Canal, all the plant and facili- ties belonging to the Panama Canal Company — our negotiators are planning to more or less give away the whole operation lock, stock and barrel. Yet, Mr. President, as part of this process and in addition to the $2,262 billion in 1977 dollars already slated for delivery to the dictator, our negotiators have worked out a way to stick the American taxpayer with this $319 million debt. Our negotia- tors propose to set up an entirely new operating entity in Panama to carry out the present business being conducted by the Panama Canal Company. This new operating entity would be callefl the Panama Canal Commission. It is just a change of words, but they can start off owing no money and canceling this $319 million debt for this new company. It would more or less spring to life upon implementation of these treaties, somewhat as Athena sprang from the head of Zeus. With no prior history and as a corporate entity unto itself, this new proposed Panama Canal Commission wor.ld get nearly all the assets of the Panama Canal but none of the liabilities. If a person sells a business to somebody, it is sold subject to its indebtedness, or take account of the indebtedness into consideration on the price to be paid. But no price is to be paid here. It is going to be a free gift with the cancelation of the mortgage, in effect, which is now on the canal. Of course, Mr. President, some of the asset's of the Panama Canal Company would be ripped off right at the beginning and given directly to the Dictator, bnt the great bulk of the assets of the Panama Canal Company would bp trans- ferred to thi«! new Panama Canal Commission : the $319 million debt, however, would remain a liability of the defunct Panama Canal Company. 234 It would not have any income or any assets, but they would owe the money. This debt would not be transferred to the operating company, the Panama Canal Commission. Mr. President, there is no ambiguity about these provisions. They are very clear as to what is going to happen. This is certainly the case of a needed amendment to the treaties to at least provide that this new commission which is going to take over will assume this indebtedness of $319 million to the people- of the United States. So, really, the Panama Canal Company owes this money and it should be paid. It should be paid out of the revenue. They are making enough money to con- tinue paying the interest and, gradually, to reduce the principal. That is not being required, though, in the treaty. I think that is certainly one basis for an amendment that I hope the Senate will adopt. So they get the canal. Mr. President, they get the business, but they do not get the debt. The United States taxpayer — you knovr who he is, Mr, President. He is the man that always foots the bill ; he is the man out there working on a dock trying to earn a living for his family ; he is the man in a cornfield in Iowa working in the hot sun ; he is the man in a steel mill in Youngstown, Ohio, sweat- ing to produce steel so that other workers can assemble automobiles. And, Mr. President, he is the man that, every time the Department of State gets its lingers in the pie, has to pay. So the taxpayer is going to have to pay this 8300 million and it is not going to come out of the revenues of the canal. They go to this new commission, which, in effect, is saying that they go to Panama. And whom does he have to pay, Mr. President? In this case, he has to pay a repressive, petty gangster dictator. In this ease, he has to pay an elitist gang- ster government which makes no effort on behalf of its own destitute people but which is perpetually preoccupied with the pursuit of individual personal profit by whatever means, apparently even illegal means resulting in the death and suffering of our own citizens in this country. But I am disgressing, Mr. President, from my purpose, because even though I find disgusting the suggestion that our Nation ought to give this gangster regime one of our most valuable national assets while, at the same time, paying to it billions in U.S. funds, my real purpose in speaking this morning is simply to raise the impropriety — as a matter of simple business ethics — my pui-pose is simply to raise the clear impropriety of delivering all of the assets of one com- pany to another new company and thereafter saddling the stockholders of the old company with all the debts, all the liabilities, and none of the benefits. But I do not suppose that fact ever occurred to anyone down there at the De- partment of State. I do not suppose they have given any thought as to what business the Panama Canal Company could go into to cover its $319 million debt to U.S. taxpayers. With no assets and no business to operate, it is going to be pretty rough to come up with that kind of money. It is going to take a real mir- acle worker just to come up with the annual interest of $16 million from a company with no income and no assets. Obviously, Mr. President, the Panama Canal Company would be bankrupt if these treaties are ratified, and the owners of the Panama Canal Company, the people of the United States, would again be left holding the bag. What did our negotiators obtain for this $319 million concession? What bene- fits are likely to accrue from saddling U.S. taxpayers with this unpaid liability? Frankly, ]\Ir. President, I can find nothing whatsoever anywhere in the treaties to justify the assumption of this debt or of the payment to Panama of the other tremendous sums proposed to be paid. We have gained no concessions whatso- ever from the Panamanians. We have gained no rights which we did not already possess under the existing treaty structure. Our negotiators have given in on every issue and our negotiators have even proposed that we assume the debts of the potentially profitable business we are presenting to Panama. These treaties lack mutuality of contract; these treaties are unsupported by consideration; these treaties are, as they have been identified from the outset, a simple giveaway. One almost questions the necessity for having a treaty at all if tliese are the sort of proposals being advanced by the Department of State. It is all irive and absolutely no take. There is one final footnote to this particular deception which I have made the subject of my speech this morning. Inasmuch as the new Panama Canal Com- mission wonld be free from debt and would possess perhaps the most valuable commercial assets in the world, the Panama Canal, would we not very soon see demands made by our Panamanian partners that the newly acquired assets of 235 the Panama Canal Commission be pledged as collateral for loans from the U.S. Treasury or from the always-accommodating international commercial banks, using international bond sales or other devices designed to raise capital to feed the appetite for profit of the Panamanian dictatorship and international banks. Mr. President, in my judgment based on my study of Panamana's record in tlie international capital market, we would exiject to see dictator Torrijos knocking on the door of the large banl^s almost immediately, if he has not already pledged the revenue of our Canal to secure new loans to cover the massive debt owed by his bankrupt regime. In this process, Mr. President, we can expect neither the bankruptcy of dictator Torrijos nor the bankruptcy of the international banlvs, but we could expect further demands on the U.S. Treasury to cover the spend thrift activities of both. DEMOCRACY AXD HUlMATs^ RIGHTS IX PANA]\L\ A FARCE [From the Congressional Record, Oct. 26, 1977 — S17751] The Panama Canal Treaties — Xo. 19 Mr. Allen. Mr. President, one of the principal dangers which would face the- United States should the Senate give its advice and consent to the proposed Pan- ama Canal treaties is the possibility — indeed, the probability — that some future government in Panama would repudiate the treaties on grounds that the treaties had been negotiated by an illegal dictatorial regime not authorized to act on behalf of the Panamanian people. The argument would be that the acts of the overthrown dictator of Panama should not be allowed to bind the new legitimate Panamanian Government and hence that any previous actions taken by the dic- tator would be ultra vires and therefore voidable. A future government could well take the position, and with some justification I would think that Dictator Torri- jus was no more authorized to act on behalf of Panama than was the French- man Bunau-Yarilla. Of course, Mr. President, in my judgment Bunau-Varilla was the properly designated representative of the Government of Panama and the treaty of 1903 was legally ratified by the Constitutional Constituent Assembly of Panama even, prior to ratification in the U.S. Senate, so I do believe that the treaty of 1%'3 is a binding document, but in the eyes or hindsight of many Panamanians, the treaty of 1903 was improperly procured. I am, therefore, only relating what I believe to }ye the likely opinion of Panamanians in future years with respect to any treaties which might be promulgated under the rule of the present military dictatorship. But. Mr. President, the possibility of future Panamanian repudiation of these proposed treaties is not simply my speculation. On August 31 at a press confer- ence held here in Washington, representatives of the Panamanian Committee for Human Rights made an emphatic statement. And something that does not exist down in Panama at the present time is, of course, human rights for the citizens of Panama. Representatives of the Panamanian Committee for Human Rights are outside Panama, of course, and they are seeking to influence the decisions of the Government there with respect to the granting of human rights to the people of that country. This Committee on FTuman Rights stated emphatically that Omar Torrijos did not speak for the Panamanian people and if democratic institutions returned ta Panama, no treaties negotiated by the dictator would be recognized as binding. That does not mean, Mr. President, that a future government would return to the status quo that existed at this time. That means that they being in control of the canal would keep the canal under such conditions as they set. certainly as to the rigbt of the "United States to defend the canal and the right of prior passage. They would not give the canal back. I do not mean that when I say they would repudiate the treaty, but they would take whatever they already had and seek to get a whole lot more. These are the people who might well return to positions of authority should Dictator Torrijos be deposed. Somewhere along the line these dictators fall by the wayside. They do not stay in forever. Some have long periods of prosperity and incumbency, but sooner or later the people catch up with them and they are deposed, and I predict that is what will happen to Torrijos unless he is undergirded by these treaties and the economic benefits that come to his regime from the tens of millions of dollars each year that would go into his coffers, some $70 million a year from the canal revenues. Again, Mr. President, on October 11, Dr. Winston Robles, a leader of thfr Panamanian exile community in southern Florida, stated to the House Com- mittee on International Relations, and I quote his statement : (23G) 23/ "All governments that come to power by force try to give legitimacy to their origins and legality to their malpractices. In 1972 Torrijos dictatorship called elections for a 'Constitutional Assembly." With all political parties and activities proscribed, except the government party 'Movimiento Neuvo Panama' and the Tartido Del Pueblo' (Moscow oriented communist party), and absolute control of newspapers, television and radio stations, it was not surprising that the govern- ment W(m 504 of the 505 carefully screened 'representatives.' " So if they could win 504 out of 505 representatives to the assembly it is quite obvious that they could have bettered the 2-to-l ratio in favor of the Panama Canal treaties in the plebiscite that was held last Sunday in Panama. They saw fit to say that it was a 2-to-l margin. Obviously if they had said, as they very well could have, that it was 100 to 1 that would make the U.S. Senate and the people of the United States skeptical of the bona fides of the election result. So, they decreed that it was 2 to 1. They could just as easily had it 100 to 1. If it had been 100 to 1, it might have caused the Senate to look with some skepticism on the treaties, for if they were so heavily balanced in favor of Panama we might have a closer look, but if it were just a 2-to-l margin in favor of the treaties it looks as if maybe Panama did not get such a good deal after all. That apparently was the thought process of the dictatorial regime. So, Mr. President, it is pretty clear that the norms of democracy observed in Panama represent nothing but a farce played to the world audience. It is crystal clear that these people in this constitutional assembly are solidly under the thumb of the gangster dictator and equally clear that they have little or no choice as to what course of action they collectively or individually choose to follow. But, Mr. President. Dr. Robles continues to describe the actions taken in 1972 in Panama designed to give some semblance of legitimacy to the Torrijos dictatorship. He continues to describe this so-called constitutional assembly : "This selected, rather than elected, assembly held its first meeting October 1. 1972. A week later the 'new constitution' was approved without discussion and the 'constitutional assembly,' even to the surprise of its members, found itself transformed into a 'Legislative Assembly' — but one without power to legislate." That is the type of government they have down there, showing it is completely under tlie thumb of the dictator. What we have here then. Mr. President, is a so-called constitutional assembly transformed into a legislative assembly which is something akin to a debating society with appointed members selected by the dictator but without any power to legislate. This unelected body was therefore established under a constitution designed primarily to uphold the facade of legitimacy while giving the substance of power to one man. But here is what Dr. Rol>les has to say : "The new constitution subordinates the legislative, executive, and judicial power to the National Guard. It eliminates the separation of powers and places the legislative power in a 'Legislative Council' composed of the Cabinet Ministers and any number of members appointed by Torrijos. It also states that Torrijos is the '^Maximum Leader." Maximum leader, Mr. President. That means that power may be shared with appointed lackeys, but at the bottom line only one man decides. No separation of powers, Mr. President, and no power outside the dictatorship, for that matter. That points out the importance of our own Senate and House of Representatives insisting on maintenance of the powers delegated to each by the U.S. Constitution. Here is what Dr. Robles has to say about the reason for going through the motions of adopting this unusual constitution : "The Constitution exists only for 'cosmetic' reasons and does not impose in practice any limits to the use and abuse of the governmental powers. This con- centration of dictatorial powers, without parallel in the constitutions of any other Latin American country, does not give, however, a complete idea of the real power that the dictator and the National Guard exercise. For example, the Article 29 of the Constitution prohibits expatriation, but several hundred Panamanians live in exile and are not allowed to return to their country." So, Mr. President, these Panamanians who have managed to escape to a country where they are able to state their views without at least any immediate fear of reprisal have got a very low opinion of Dictator Torrijos and, conse- quently, an even lower opinion of the legal effect or validity of any treaty nego- tiated by him. I might add, Mr. President, that Dr. Robles' view is one that I also 238 share inasmuch as I believe it to be inappropriate for the United States to enter into a treaty relation calling for partnership in the joint operation and defense of a strategic waterway with a government whose leaders are either criminals or the associates of criminals. Dr. Robles made the same point when he described life in Panama to the members of the House Committee on International Relations : Today Panamanians live in constant fear. Telephones are tapped, mail inter- cepted, houses searched in the dark of night, people arbitrarily arrested, and the population intimidated by an organization of paid informers. This govern- ment, its officers and its friends are involved in all kinds of legal and illegal businesses. The involvement of high ranking officers in drug traffic is well known. And I miglit say, Mr. President, that we have seen some hints of the extent of that involvement in previous discussions here on the floor of the Senate and elsewliere. Certainly the American people should be alerted to the character of this Government that the Department of State has seen fit to treat so hand- somely and with such great deference. Yet, Mr. President, much has been made in our own media here in Wash- ington about this so-called plebiscite conducted on Sunday, October 23. in Pan- ama, but listen to Dr. Robles' explanation of the legal effect of this plebiscite. And before quoting him, Mr. President, I would like to remind Senators that Dr. Robles is a lawyer of great international standing and certainly the foremost authority on the Panamanian Constitution. Here is Dr. Robles' analysis of the legal effect of the Panamanian plebiscite : "The Panama Constitution provides that any Canal Treaty must be 'submitted' to a national plebiscite. However there is a confusion. The plebiscite does not liave any binding effect because the power to approve a treaty belongs to the Assembly of District Representatives — (Article 141 of the Constitution). Tlie plebiscite is an expedient to give the treaty the appearance of a popular approval. However, what kind of a plebiscite can be held without a free press, without freedom of assembly, and without freedom of thought and expression? What is the value of a plebiscite under the constant manipulation of information by the government-controlled press, radio, and television? With questions like that being asked, ^Nlr. President, this plebiscite then is not going to be a very solid foundation for a new treaty, at least not in the eyes of some subsequent, freely constituted, legal Panamanian Government. Dr. Robles also points out that it does not really matter whether the plebiscite was conducted freely or not because, and I quote his remarks : "The plebiscite is a simple problem for the Panamanian government. It does not matter how many vote aye or nay. What matters is who is going to count the votes." So the results of this plebiscite could very easily have been tailored, Mr. Presi- dent, to achieve the l)est public impact. And public impact is pretty important to our Department of State. You know. Mr. President, the U.S. Embassy in Pan- ama had a study prepared by a Mr. .John L. Jackley on the subject, "The Impact of the New Cannl Treaty." In addition to much other advice, Mr. Jackley sug- gested to our diplomats the following : "A lot of good press would be essential for success: In this situation we could make good use of the controlled press situation of the isthmus. If it doesn't work, no propaganda would sell it. But it can be given at least an initial breath of promise through skillful manipulation of the available media." So it has been recommended, Mr. President, to the Department of State that the controlled press down there in Pannma be utilized to full advantage to rig the results of this plebiscite. And you know, Mr. President, for the best psy- chological impact here in the United States, they would not want a 100-percent vote — that would be too obvious; they would want a vote showing some signifi- cant opi)Osition but overall strong approval — and that is about what we have gotten out of these results rei)orted from Panama. Mr. President, with the Department of Slate being advised "to make good use of the controlled press." certainly we ought to be able to understand the ffM}ling of the I»anamanians who wish to see their country free, and certainly we ought to be aide to understand their feeling that any deal negotinted with Dictator Torrijos is not binding and is in itself a threat to the prospect that Panama will ever regain freedom. "I'anamanians do not want to replace a bad treaty with one that is going to be imi^osed with Torrijos playing the snme role that Bunau-Varilla played in 1003. The new treaty does not solve the causes of conflict' between the two countries. 239 On the contrary, it adds a few new ones, as, I am sure, many members of Con- ji:ress are aware. However in this ever-changing world, permanent does not mean eternal. Sooner or later the dictator will fall. Then the treaty is going to be rejected by Panamanians and their governments and all the resentment against the dictatorship will be reflected in the future relations between Panama and the United States." And that is the bottom line, Mr. President, Sooner or later the dictator will fall, and sooner or later any treaties negotiated with the dictator would be by tlie Panamanian people completely and properly repudiated, and the United States will be blamed correctly for perpetuating a dictator whose time is already past. EXISTIXG TKEATY TIES ABKOGATED [From the Congressional Record, Oct, 27, 1977 — S178G3] The Panama Canal Treaties — No. 20 Mr. Allen. Mr. President, in one of my earlier speeches to the Senate on the subject of the proposed Panama Canal treaties, I emphasized the fact that one of the major flaws of the proposed treaties, is that the new proposed treaties, rather than building on and modifying our existing treaty relationship with Panama, w^ould w^ipe out that relationship in its entirety and would, in effect, start out completely anew. Now, certainly there are advantages in a fresh start in almost any project, and I would be the last to insist that it would be impossible to start anew in our dealings with Panama, but, Mr. President, if that course of action is to be followed, then much greater care must be given to preserving the substantive rights of the United States than has been given thus far in this new reordering of the structure of the bilateral rights and obligations now existing between the United States and the Republic of Panama. But because we have had such close diplomatic ties with Panama since the formation of the Republic of Panama in 1903, in my judgment, regardless of the ultimate outcome, we would still make a grave error and would make our task unnecessarily difficult if we were to abolish in toto all existing treaties, protocols, executive agreements, exchanges of letters, and similar notes, memorandums or other documents bearing on the Panama Canal and on the close ties of the United States with Panama. However, Mr. President, near total abolition is exactly what is contemplated by these proposed treaties. Article I of the proi>osed Panama Canal Treaty would in one stroke abrogate virtually every document of significance negotiated with Panama in the past 74 years. Article I would wipe out presumably both the good and the bad without discriminating between the two. Article I would, for example, wipe out the present monopoly the United States enjoys witli respect to construction of any canal across the Isthmus of Panama and would leave the Soviet Union or any other third nation free to negotiate with Panama for rights to construct a new sea level canal, either within the present Canal Zone or at some other location in the isthmus. It would leave the Soviet Union or Cuba or some other third nation witii which Panama might enjoy particularly cordial relations complete freedom to negotiate even for completion of the third locks canal now lying within the canal and initially worked on by the United States prior to World War II. So, Mr. President, that is one example of an existing right of the United States which would be destroyed by this wholesale meat-ax abrogation of all existing significant treaty ties with Panama. But there are plenty of other rights now enjoyed by the United States which would be lost, presumably forever. Also among the many and valuable rights now enjoyed by the United States which would be destroyed with the implementation of article I is our present right to deny access to the canal to a belligerent vessel of war or any otlier vessel which is employed by a belligerent power as a transport or fleet auxiliary. The United States obtained this right in an agreement concluded in 1914 between Robert Lansing, then acting Secretary of State, and Eusebio A. INIorales, Ambassador Plenipotentiary for Panama. A protocol of the agreement, the protocol of 1914, was signed at Washington on October 10. 1914. and entered into force on the same day. It is found that 38 Statutes at Large 2042. In pertinent part, Mr. President, the protocol roads as follows : "Ilosjutality extended in the waters of the Republic of Panama to a belligerent vessel of war or a vessel belligerent or neutral, whether armed or not, which is employed by a belligerent power as a transport or fleet auxiliary or in any other way for the direct purpose of prosecuting or aiding hostilities, whether by land or sea, shall serve to deprive such vessel of like hospitality in the Panama Canal Zone for a period of three months, and vice versa." In other words, Mr. President, that is a very diplomatic way of saying simply that if either Panama or the United States decided not to allow the passage (240) 241 of a belligerent vessel of another nation, then that vessel had best go around the horn because it could be a 3-month wait for passage through the canal. In prac- tical effect, the protocol of 1014 gives to the United States the right to forbid the passage of a vessel belonging to a nation at war with any other nation, and the rights set forth in the protocol, when coupled with the territorial interest of :the United States in the Canal Zone, guarantee to the United States the legal authority to deny passage to a belligerent vessel belonging to a nation making war on the United States or on an American ally. Without this protocol, Mr. President, or without the retention of territorial rights in Panama, the United States could find itself in the ridiculous position of having agreed, as a matter of international law pursuant to these proposed treaties, to permit the passage of warships of a nation attaciartlett suggests a third alternative to ratification or rejection of the Pan- ama Canal treaties. Of course, Mr. President, in my judgment, these treaties should be promptly rejected, out of hand and without embarrassment, because these treaties are so laden with substantive and technical defects as to make them unworthy of favorable action in the Senate and. indeed, except for the gravity of the situation, unworthy even of efforts to correct by amendment the many obvious errors and tlie evpu more numerous latent flaws. But, 'Sir. Presi- dent, notwithstanding my own opinion on this subject, I do feel that the third op- tion suggested by Mr. Bartlett should rer-eive close scrutiny inasmuch as his sug- gestion would at least prevent the T'^nited States from assuming the role of guarantor of the Torrijos dictatorship, one of the most repressive regimes ever to govern a nation in the Western Hemisphere. I\[r. Bartlett suggests simply that tbe Semite defer action on the Panama Canal treaties until Torrijos loosens his death grii) on the people of Panama. (242 ) 243 Mr. President, Charles Bartlett describes his idea — and this may well, indeed, also be the idea of others, including some Members of tlie Senate — he describes his idea in this fashion : "Tliis strategy contemplates a delay as long as the three years which preceded Senate approval of the 1936 treaty. It has its roots in varied doubts on the charac- ter and intentions of President Omar Torrijos." Mr. Bartlett apparently feels that delayed action on the treaties could cause some semblance of basic human rights to be reestablished in Panama. I, for one, believe it will take more than a delay in ratification of these treaties to reestab- lish democracy in Panama, but perhaps delay would cause some steps in the right direction to be initiated. In reviewing the recent public relations offensive launched by Dictator Torrijos, Mr. Bartlett seems to doubt that any signiticant steps have in fact been taken by the dictator to improve human rights in Panama, and he notes that the so-called free debate which preceded the plebiscite held last Sunday "could be the start of a new era or a mere gesture to propitiate the U.S. Senate." Mr. Bartlett rightfully suspects this plebiscite was held strictly for stage effect here in the United States, and in further discussing the dim prospects for real progress in improving human rights in Panama, he goes on to ix)int out tlie following : "The signs are not encouraging, Gerardo Gonzalez, the former Communist leader who is now Torrijos' vice President, has asserted in recent days that Panamanians would not have had a new treaty if they had persisted in "the farce which in the past they considered democracy." He termed elections "a complex and repudiated system which divided Panamanians into groups." So, Mr. President, the Vice President of Panama, Gerardo Gonzalez, a former Communist, is not impressed with an electoral process which tends to divide voters into groups — presumably into groups not enamored of Torrijos' pro- Marxist regime. Former Communist Gonzales — I assume he is no longer a Com- munist because that is what Mr. Bartlett reports — former Communist Gonzalez would undoubtedly prefer to see these treaties promptly ratified here in the Senate without delays so that the pro-Marxist regime now in power can fully con- solidate its authority on the cash and prestige thereby bestowed. This last factor is also noted by Mr. Bartlett, who describes the matter this way : "If the treaty is ratified and the government begins to draw the $80 million j)er year which it anticipates in tolls and fees, the regime will have no further need to consider democratization. The national guard, already badly corrupted in the top ranks, will be expanded to snuff out the last resistance to a left-wing •dictatorship. ***** "The great virtue of delay is that it will oblige Torrijos to show more of his hand. "I am one of the most radical of men," he has been saying in Europe. He has certainly been radical in visiting upon a small republic such authoritarian exotica as torture, forced expatriations and a blackout of free expression. Re- lentless greed is his only major shortcoming as a hardline Marxist." Mr. Bartlett concludes with this thought : "A Marxist dictatorship would be a poor epitaph for the sage of America's role in Panama, and the best hope of avoiding it may be foot-dragging by the Senate." Indeed. Mr. President, perpetuation of a Marxist, pro-Castro dictatorship in Panama is not a result many Members of the Senate, if any, would wish to see as our country's crowning achievement in the Isthmus of Panama, and I do, therefore, respectfully commend to my colleagues for active consideration Mr. Bartlett's thesis that prolonged delay — perhaps delay on the order of the Senate's wise and lengthy consideration of the genocide treaties — prolonged delay of that -order might be the best method of stimulating Panama's political evolution to- ward freedom and might, additionally be the best way of preserving the national security interests of the United States in this strategic and vital waterway. Mr. President, I yield back the remainder of my time and I suggest the absence of a quorum. Mr. Robert C. Byrd. Mr. President, will the Senator withhold his suggestion? Mr. Allen. I am delighted to. Mt. Robert C. Byrd. I believe the Senator from Wyoming is ready to proceed under his order. Mr. Hansen. Mr. President, first, let me compliment the distinguished Senator from Alabama for his very perceptive observations and comments this morning. I hope that Senators will take time to read in the Record what our good friend from Alabama has so succinctly observed this morning. Mr. AiiLEN. I thank the distinguished Senator. NO PEIOEITY TRANSIT OF U.S. WAR VESSELS [From the Congressional Record, Nov. 1, 1977 — S18295] The Panama Canal Treaties — No. 22 Mr. Allen. I tliank the chair. Mr. President, on October 19, 1977, the subjecC of my Panama Canal talk — and I might say that was my 21st talk on this subject — was the visit to the White House made recently by Panamanian Dic- tator Omar Torrijos. I discussed in detail the lack of clarity in the unsigned joint communique issued at the conclusion of the dictator's visit, and I pointed out its failure to resolve any of the many ambiguities in the proi)osed Panama Canal treaties. Specifically, Dictator Torrijos and President Carter had discussed the right of the United States to intervene in Panama to defend the canal after 1999 and the right of U.S. naval vessels to priority passage. As I explained in my remarks at that time, the so-called agreement reached by the two lenders has done virtually nothing to clarify existing ambiguities in both areas and, in fact, would further cloud both issues by introducing additional conflict in the sepa- rate interpretations of these treaty provisions by the two governments. Of course, Mr. President, former Ambassador Linowitz and other administra- tion si>okesmen have either asserted or implied that the United States does have the right to intervene in Panama to protect the neutrality of the canal and that U.S. warships do have the right of priority transit of the Isthmus of Panama. These assertions have been made, Mr. President, notwithstanding the words of the treaties which seem certainly to indicate otherwise. In other words, Mr. President, former Ambassador Linowitz and other proponents of the treaties have insisted that the treaties have a meaning which would be viewed favorably here in the Senate and w^hich might be acceptable to the people of the United States, but, Mr. President, unfortunately for proponents of these treaties, the Panamanians have refused to lie low while the documents are being sold up here in the United States. The Panamanians have been quite frank in stating their interpretations. In fact, Mr. President, starting back in August — in fact, on August 10, 1977, and again on August 24, 1977 — Panama's chief treaty nego- tiator, Dr. Romulo Escobar Bethancourt, choose to publicize in Panama the exact limitations on the rights of the United States to take military action to protect the canal and to maintain its neutrality and on the rights of T'.S. war ves- sels to priority passage. Fortunately. Dr, Escobar's remarks were subsei^uently made available to the Senate and have served to highlight the differing inter- pretations given to these very important defense provisions. Senators read with some amusement Dr. Escobar's rather indelicate comment : "If tlie gringos — Keferring to the United States — "If the gringos with their warships say, 'I want to go through first,' then that is their problem with the other ships." Indicating that Dr. Escobar felt confident that we had no right of priority passage. That was not very diplomatic, Mr. President, but certainly clear in its meaning. Here w^e have expressed in no uncertain terms exactly liow the Pan- amanians would view this so-called right of expeditious passage which has been trumpeted by certain of our treaty negotiators as a great diplomatic achieve- ment. Similarly, Mr. President, we learned from Dr. Escobar's remarks — as early as August 10, 1977. back before we had even been told what was in the treaties — that Panama agreed to United States intervention to defend tlie canal only in the event such intervention was directed against "third countries''— not against Panama. We were even more bafilled when we learned that former Am- bassador Linowitz on the same day refused to comment on or to correct Dr. Esc(vbar's assertion. • So, Mr. President, these differing interpretations, have been in the works for some time now; in fact, these differences were quite evident even preceding (244) 245 the signiug of the two treaties on September 7, 1977. But, Mr. President, when it hiter became obvious that the Senate would not allow the matter to be hazed over or swept under the rug, the proponents of the two treaties apparently thought that it w^ould be wise to seek some clarification to allay the concerns of many of us here in the Senate, to assuage our feeling that the tw^o documents ought to be capable of reasonable interpretation by reasonable men, to come up with the same interpretation and to persuade the citizens of the United States that these ambiguities would, in subsequent years, not be resolved in favor of the Panamanian interpretation with consequent disadvantages to our own na- tional security. The unsigned clarifying document, however — and Senators, of course, know that tliis so-called agreement between Dictator Torrijos and Presi- dent Carter was not signed — caused more problems than it solved and has thrown us into even deeper confusion in our attempts here in the Senate to ascertain the actual meaning of these truly mystifying provisions. I regret to say, Mr. President, that a new element of further confusion has been gratuitously tlirown into the brew by Dictator Torrijos. Apparently, Mr, President, a few days ago on October 21, 1977, Dictator Torrijos — in addition to again threatening the Senate in veiled terms with an armed attack on the canal should the Senate fail to ratify these treaties — in addition to the fre^ quently heard threat, Torrijos in Panama made the following interesting com- ment giving his interpretation of the just-announced, unsigned communique. I quote what Torrijos said : "I don't want the canal unprotected but I don't want them (the Americans) to overprotect us to the point of interfering with our lives. I want to establish a system w^here we press a button here and a bell rings there when the attack is greater than our ability to handle it. I wouldn't say it's a right the U.S. has — I'd say they are obligated to come to the defense of the canal. "On these terms, we understood one anotlier. Then we drew up in two minutes exactly what we wanted : You don't interfere in our internal matters, and leave me a bution I can press in Panama, and then I want a loudspeaker at strategic command that they will hear when I do press the button." So, Mr. President, this does not sound like much of a right we have obtained here in these treaties or in this subsequent so-called clarifying document. This, is not much of a right if we are unable to take any action until a petty Marxist dictator elects to "press a button" to put American troops into action to look after his needs as he sees them. Not much of a right indeed, Mr. President. In fact, on close analysis I would call this particular interpretation given by Dictator Torrijos an interpretation which would in practice impose an ob- ligation on the United States to shore up his dictatorial regime rather than an interpretation which would grant to the United States, as I believe the majority of the Senate desires, a right to g-uarantee the neutrality of the canal with such appropriate military action as the United States, in accordance with its consti- tutional process, might itself unilaterally decide. So we still have the question as to who reaches the decision for military presence by the United States. Torrijos says he is the man that presses the but- ton, and that we do not have any right to determine when it is necessary for us. to take action. It is my contention that the United States should be allowed, at such times as it feels the canal is in danger, to have the right to send troops in to protect the canal. The last thing, Mr. President, that I trust any of us would like to see given to Dictator Q'orrijos is the ability to "push a button" to commit U.S. troops to bat- tle, and certainly, Mr. President, this is indeed a curious concession made to Torrijos if he does secure by these treaties the right to demand the presence of U.S. forces as it may suit his own interest, while the United States must vrait idly by for the dictator's summons when the vital interests of the United States are being sacrificed to some yet-undisclosed Marxist project endangering the operation of the canal. In other words, Torrijos sees the treaty and the unsigned agreement be- tween him and President Carter as giving him the sole right to decide when American troops can come in to defend the canal, but he might be the aggressility of traditing drug offenders, and they did not agree to anything else. And now it is 1977, and in spite of intense diplomatic negotiations on every imaginable subject, we still have no treaty for the extradition of drug traffickers, not that anyone should be particularly surprised inasmuch as the brother of the Maximum Leader down there would presumably be one of rlie lirst to be extra- dited. So we are not surprised, Mr. President, but many of us are outraged l)e- cause we in the United States still have the problem of 400,000 heroin addicts being fed on heroin funneled through Panama, Mr. President, even though the negotiators for the United States do not seem to have given this subject a second thought, the negotiators for the Republic of I'anama were concerned — very concerned— about treaty provisions affecting jurisdiction of offenses involving trafficking in drugs. In fact. Mr. President, the negotiators for the Republic of Panama were so concerned about the treat- ment of drug offenses and the jurisdiction of Panama over drug offenders that they insisted that Panama be given in the proposed Panama Canal Treaty pri- mary jurisdiction for all crimes involving the trafficking of drugs even within what is now the Panama Canal Zone and even if the offender were a U.S. na- tional. This specific assertion of jurisdiction of offenses involving trafficking in drugs is set forth in article XIX of the executive agreement in implementation of article III of the Panama Canal treaty, and it is also set forth, with respect to military I)ersonnel in article YI of the executive agreement in implementation of article IV of the treaty. In bothe cases, it is also clearly specified that an individual charged by U.S. authorities upon tbeir request. I am sui^ all Senators share my hope that Panama is insisting on jurisdiction over crimes involving trafficking in drugs out of a genuine desire to suppress the drug trade rather than from the more base motives which might be inferred from some of the revelations of the past weeks and months, but the point is, Mr, Presi- dent, no provision whatsoever in these proposed treaties is made for the extra- dition of drug offenders who are sought by the United States and who have ob- tained refuge in Panama, This omission has occurred notwithstanding the many thousands of Panamanians residing in the United Staties who travel frequently between the two countries, this omission has occurred notwithstanding also the many U.S. citizens with dual Panamanian citizenship, and this omission has occurred notwithstanding the fact that as far back as 1971 the Bureau of Nar- cotics and Dangerous Drugs obtained the agreement of the Government of Pana- ma to examine the feasibility of obtaining drug offense extradition riglits — not- withstanding all these factors, our negotiators have not provided in these pro- posed treaties for this important extradition provision. As I have often noted. Mr. President, I can see virtually nothing in these treaties which accrues to the benefit of the United States. Why, at least, could we not have obtained the right to extradite drug offenders wlio are charged with violating our laws and who are found in the Republic of Panama? After pro- posing to give to Panama one of our most valued national assets and after pro- posing to pay to Panama several billion dollars for taking the gift, I do find it more than passing strange that we could not even obtain an agreement from Panama that narcotics offenders could l)e extradited. So, Mr. Pi-esident, I hope we can rectify this shortcoming. I jn-opose to amend the pending Panama Canal treaty to provide for the mutual extradition of per- sons charged with or convicted of trafficking in drugs. I have prepared this amendment as one of a series of amendments I intend to propose to con-ect the 250 errors and omissions of our negotiators. Mr. President, I Iiave prepared this amendment for introduction because I believe this amendment, when considered in the Senate, will bring into focus a problem of massive proportion which must be addressed and solved before any new agreement can be entered into with Panama in which it is provided that the United States and Panama will jointly operate and defend the vital Panama Canal. The proposed amendment, along with the other amendments I intend to offer, will of course be referred to the Committee on Foreign Relations, chaired by my distinguished senior colleague. Senator John Sparkman. I know that the mem- bers of the Committee on Foreign Relations will give this amendment together with all others very serious and very careful consideration, and knowing that fact I respectfully suggest to the distinguished chairman of the committee that hearings on this amendment might aid in surfacing information for the com- mittee to enable its members to assess accurately the need for its adoption. In my judgment, this amendment is clearly needed, other amendments are clearly needed, and I hope that these needed amendments will receive the full support and backing of Senators who recognize that the Senate must assume responsibil- ity for putting into these treaties what the Department of State has left out and for taking from these treaties the many provisions negotiated by the Depart- ment of State which do violence to our national interest. I thank the Chair, and yield back the remainder of my time. EXECUTIVE AGREEMENT LONGER THAN BOTH TREATIES COMBINED [From the Congressional Record, Nov. 8, 1977 — S19002] The Panama Canal Treaties — No. 24 Mr. Allen. Mr. President, in paragraph 6 of article IV of the Executive Agree- ment in Implementation of Article IV of the Panama Canal Treaty, the follow- ing language appears : '^Since the Republic of Panama is a signatory to the Latin American Denu- clearization Treaty (Tlatelolco), the United States shall emplace no type of nuclear armament on Panamanian territory." In my judgment, Mr. President, this provision could have very great adverse effect on the strategic defense posture of the United States, yet this provision has been carefully salted away by our negotiators in this little-known clause in one of the many executive agreements, annexes to executive agreements, annexes to annexes, agreed minutes, protocols, exchanges of letters, and unsigned under- standings which in sum contain the real meat of the Panama Canal Treaty rather than the provisions of the treaty itself. So, buried in this obscure execu- tive agreement, which I doubt that more than a handful of people in the country have actually had an opportunity to examine — we find buried in this executive agreement a major military provision directly affecting the strategic defense both of the Panama Canal and of the United States. . Now, I am reasonably sure that the administration, and certainly the Depart- ment of State, would assert that this provision buried away here in this lengthy executive agreement could have no adverse effect on the defense of the United States or of the canal and, in fact, I have little doubt that representatives from the Department of Defense might readily parrot the same point of view. Cer- tainly, the leadership down at the Department of Defense has shown no reluc- tance to follow precisely the lead of the Department of State ; but, Mr. President, the Senate of the United States is entrusted with the duty of making an inde- pendent judgment with respect to all aspects of these proposed treaties, not- withstanding the various advocacy positions adopted by certain of the depart- ments in the executive branch. So v,'e have a duty in the Senate to make an independent judgment, based on all of the information available to us, on the effect and on the poten- tial effect of this peculiar and highly significant prohibition hidden away in this executive agreement of some 53 pages — longer than both treaties combined. Mr. President — and I am not even including in that page count this 53-page executive agreement. Sharp eyes, Mr. President, are required for this job, I can assure you, but there it is buried away in this executive agreement that the Latin American Denuclearization Treaty would prohibit the United States from having at any time any nuclear weapons in Panama or what is now the U.S. Canal Zone. On October 31, 1977, this Monday just past, Mr. President, Egyptian authori- ties refused to allow the British nuclear submarine HMS Dreadnaught to pass through the Suez Canal. This British nuclear submarine was on its way through the Suez Canal on an official voyage to visit Iran. The Dreadnaught was part of a task force on this official visit of state. You know, Mr. President, if you leave Great Britain by sea and you wish to go to Iran, the best route, rather obviously, is through Gibraltar, through the Medi- terranean, through the Suez Canal, and on into the Red Sea and the Indian Ocean. You do not have to be much of a navigator to figure that out. But, Mr. President, the British nuclear submarine Dreadnaught is not going to take that route because the Egyptians have let the British know that the canal is not open to the nuclear submarine Dreadnaught. So, Mr. President, if the Dreadnaught is still proceeding to Iran, then the Dreadnaught is going around Africa, and Africa, Mr. President, is a right large land mass. Perhaps we here in the Senate could mark the progress of the Dreadnaught if we could obtain that information. It (251) 252 might be interesting for ns to follow her majestic voyage past the Canary Islands, around the Gold Coast, down into the Bight of Biafra. on around past the Congo, past Angola, past South West Africa, past Capetown, back up around Mozam- bique, past Madagascar and four or five other countries along the way, past Somalia, and back again where she would have been several weeks or months before at the entrance to the Red Sea — at the other entrance. Mr. President, to the Suez Canal. So the Dreadvauglit, Mr. President has got quite a voyage ahead of her — those nuclear reactors in the Dreaclnaught are sure going to work overtime. Mr. Presi- dent — if she indeed wishes to represent the United Kingdom on this official visit to Iran. I would venture the guess. Mr. President, that the DrcadnavfjM may find it impossible — nuclear reactor or not — to make her rendezvous there at the entrance to the Red Sea with the other ships of the Royal Xavy in this task force en route to Iran. The Dreadnaught is going to have to be a very amazing vessel to catch up with those other non-nuclear-powered ships that the Egyptians did permit to pass through the canal. Now, Mr. President, I regret as much as anyone the embarrassment which must have been suffered by our good ally, the Government of the United Kingdom. I regret very much that HMS Dreadnaught was forced to wait at the northern end of the Suez Canal for a period of several days while the rest of the Royal Xavy Task Force she accompanied was allowed through the canal to complete this official visit to Iran. But, Mr. President, there is a lesson to be learned here for the United States. The lesson is a very clear lesson, and the lesson taught should be heard loud and clear. Perhaps, therefore, Mr. President, it would ])e helpful to examine the position in this incident asserted by the Government of Egypt. Egypt, Mr. President, simply told the British that passage of nuclear vessels through the Suez Canal would be barred until the signing of an international agreement on safety measures and security guarantees for such vessels. That was it, Mr. President. That was, at least, the reason the Egyptians gave to the press. Xo prediction was made about when such an agreement might be signed nor about the number of nations which would be required to sign it. But one thing is sure, Mr. President, and that is that the Dreadnaught did not proceed through the Suez Canal. I would like to remind the Senate of the voyage of another vessel, the recollec- tion of which I believe should be of value. I refer to the voyage of the battleship Oregon from the west coast of the United States around the Horn of South America and on into the Atlantic and then the Caribbean where the Oregon played a vital role in the victory of the United States in the Spanish American War. There was no Panama Canal then. Mr. President, and every American was caught up in the excitement of the journey of this great warship as she progressed around the entire land mass of South America in an effort to reach the Caribbean in time to affect the outcome of battle in favor of our country. The cruise of the Oregon lasted 70 days, Mr. President, and while I am sure tlie Dreadnaught is faster than the old Oregon and while I recognize that a different continent is involved, the principles are identical and tlie distances are equall.v overwhelming. How long would it be, Mr. President, before the pro-Marxist dictatorship in Panama decided — should these proposed treaties l>e ratified — how long would it be before the Panamanian dictator decided that it would be convenient to inter- pret this executive agreement provision I have quoted so as to justif.y the pro- hibition of the passage of a U.S. nuclear-powered or nuclear-armed warship? The provision reads this wa.v — and I quote it again because I believe this is an important point which cannot be overlooked, and T might say that I am going to make sure that it is not overlooked because it is a very important point — this provision reads as follows : "The United States shall emplace no type of nuclear armament on Panamanian territory." How long would it be before the Panamanian dictatorship interprets the Span- ish text of tliis provision as a prohibition on the passage of U.S. nuclear war vessels? IIow long would it be before this pro-Communist government in Panama decides that its adherence to the Latin American Denuclearization Treaty makes it imperative to divert all U.S. nuclear warships seeking to transmit the Isthmus of Panama? How long would it be. !Mr. President, before this avowed ally of Communist Cuba determines, as have tlie Egyptians in the case of the British, that T'.S. nuclear vessels may not pass tlirough the canal until sufficient numbers of nations have signed some obscure international protocol on even more obscure alleged safety measures and so-called security guarantees respecting the passage of such ships? 253 On Saturday, Mr. President, I was honored to be the principal speaker at the launching of the nuclear submarine Birmingham (SSN 695). At that time, I ex- pressed the hope that the Birmingham would be a symbol of our determination to resist tyranny and a symbol of the will and might of our good country. I addressed the distinguished guests, Mr. President, but I spoke to the workers in the shipyard when I said, "You have taken cold steel and made it live." I shared their pride in their great accomplishment, and I would share also their sorrow should they see the day when this magnificent vessel they constructed was turned away from her course by a petty gangster dictator who had obtained, through the ineptness and folly of our diplomats, a deathhold on our canal. This is my final speech in a series of 24 speeches in this session of the 95th Con- gress, and I thank Senators for the attention they have given my remarks. Mr. President, I ask unanimous consent that a wire service report under date of October 31. relating the Dreadnaught be printed in the Record, together with an article published in the San Diego Evening Tribune entitled "Admiral Opposes Canal Treaties." There being no objection, the material was ordered to be printed in the Record, as follows : Cairo, Oct. 31. — Suez Canal authorities have refused to allow the British nuclear submarine Dreadnaught through the canal at the request of the Egyptian Atomic Energy Commission, the semi-oflBcial newspaper Al-Ahram said today. The report followed a statement yesterday by Egyptian harbor authorities denying any knowledge of the incident. Al-Ahram quoted a senior Suez canal oflScial as saying transit permission for the 3,588-ton Dreadnaught had been refused because maritime regulations re- quired ample prior notice and the request came at short notice. The newspaper said Foreign Minister Mohammed Riad would explain the Egyptian position to the British amhassador in Cairo today. It said Egypt had told all naval powers since 1974 that passage of all nuclear vessels through the canal would be barred until signing of an international agree- ment on safety measures and security guarantees for such ships. The British defense ministry said yesterday that the Dreadnought has been at tlie northern end of the canal since Thursday when the rest of a royal navy task force en route to Iran for an official visit was allowed through the canal. [From the San Diego Evening Tribune, October 1977] Admiral Opposes Canal Treaties (By Adm. Horacio Rivero) The central issue can be narrowed to two questions. Is the Panama Canal important to the security of the United States? Will the security requirements be satisfied if the U.S. cedes the canal and zone to Panama? Some proponents of the new Panama Canal treaties have deemphasized the strategic and commercial importance of the canal and its current value to our Navy. The President, for instance, stated to the press : "Any large ship, an aircraft carrier, for instance, can no longer pass through it" and "In the last 12 months only four or five vessels" have transited the canal. Ambassador Sol Linowitz, one of the treaty negotiators, in his speech before the American Legion convention August 19, 1977, stated : "It is no longer vital, clearly no longer as useful as it once was for the shifting of combat forces." The President was obviously misinformed. For it is not "any large ship" but only the 12 attack aircraft carriers, out of a naval inventory of almost 500 ships, that cannot use the canal, and it is not its utilization in normal peacetime that is important to the Navy, but the availability of the canal for redeployment of naval vessels in time of war or in time of crisis or in anticipation of war, as the international situation may demand. In time of need some of the attack carriers can be redeployed around South America at high speed, taking advantage of their high endurance ; those powered by oil might be accompanied by a fast replenishment ship (AOE) to insure their arrival with a full fuel load, while the three nuclear powered ones could proceed on their own at an even higher speed. It is for the other types of naval vessels— the cruisers, destroyers, submarines, frigates, amphibious and mine warfare ships 254 and logistic support ships which constitute the bulk of the Navy and do not have the great endurance at high speeds possessed by the attack carriers that the canal provides the greatest benefits. Of course it would be desirable for the attack carriers to be able to use the canal also ; this can be made possible in the future by enlarging the canal locks or constructing additional, wider locks alongside the present ones, a project of reasonable magnitude. A sea level canal is not only not required, but would represent a fabulously expensive solution which would result in a canal infinitely more vulnerable than the present one. A Navy like ours, which has been reduced in size to the point that it cannot be described as a two-ocean Navy, must have one means for quick and timely trans- fer of its ships from one ocean to the other, as demanded by strategic and opera- tional needs. This is obviously important in wartime but equally important in periods of crisis or of international tension. The strategic mobility which is a characteristic of naval vessels and the ability to utilize this quality that we cur- rently obtain from possession of the Panama Canal balance to a degree the risks inherent in the naval force level deficiencies. Without unquestionable assurance that the canal will be available under all and any circumstances, these risks would loom much larger. The importance of the canal for "the shifting of combat forces" was well dem- onstrated in World War II and in the Korean and Vietnam conflicts. It has also been shown in time of crisis. For instance, during the Cuban missile crisis, when military operations to remove the missile by force were at one point imminent, it was possible to reen- force rapidly the Atlantic Fleet with a brigade of Marines from the Pacific, with their armament, ammunition, and full equipment, providing a most valuable addi- tion to the Atlantic Fleet forces. If the canal had been in the hands of a govern- ment under Cuban or Soviet influence, or sympathetic to those countries could the safe and timely passage of the ships have been assured in those circumstances? The opinion of Ambassador Linowitz is opposite that of four former chiefs of naval operations, one of whom had previously commanded the Atlantic and the Pacific fleets and later became chairman of the Joint Chiefs of Staff. In their words : "Contrary to what we read about the declining strategic and economic value of the canal, the truth is that this interoceanic waterway is as important, if not more so, to the United States than ever." It is doubtful if any knowledgeable naval officer would dispute their view. The commercial importance to the canal is also great but it is secondary to the military aspect. Ships with beam of slightly more than 100 feet cannot use the locks, but they constitute but a small fraction of the merchant vessels of the world. In any event, the passage of both merchant and war vessels in normal time of peace is a matter of convenience, in that it permits the saving of time and money. It is a different matter in time of war, or in preparation for war operations. The question remains whether the security requirement can be equally well satisfied by a regime of control and occupation different from the existing one — that is if the canal is neutralized and placed under the control of another coun- try and the U.S. military presence is removed, which are the stated objectives of the new treaties. The proposed Panama Canal Treaty provides for assumption of sovereignty over the Canal Zone by Panama six months after final ratification, but until Dec. 31, 1999, the U.S. will have primary responsibility for the security and defense of the canal and is authorized to maintain forces in the Republic of Panama for this purpose. During that period the U.S. will be in a position to enforce its rights of passage, even if the current for a future Panamanian govern- ment should choose to interfere with them, although our ability to prevent or thwart violent action against our personnel and property and against the canal will be substantially reduced because of the absence of the protection of a U.S. -occupied and owned zone. Thereafter only Panamanian military forces would protect the Canal. The Canal Neutrality Treaty would become effective concurrently with the Canal Treaty and provides that the canal shall be open, both in peace and war, to the war vessels of all nations without distinction, including those of nations at war with the U.S. From that date the U.S. would not be able legally to deny passage to vessels that may pose a thi-eat to the U.S., and after 1999 it would have neither the legal right nor the inplace military capacity to do so. 255 It is argued by the proponents of tlie treaties that their ratification, the elimi- nation of the Canal Zone and the phasing out of the U.S. military presence would enhance the security of the canal and the assurance of its availability to all. In the words of Ambassador Linowitz before the House Committee on Merchant Marine and Fisheries : "The greatest danger to our security interest in the canal would be an effort to maintain and continue the present status." The implication is that it is the U.S. presence which gives rise to the security threats to the canal and that these threats would be reduced if the U.S. military presence were re- moved, and the canal neutralized. The argument rests on the fear of sabotage and plots which might result from anti-American feeling generated by our continued presence in the Isthmus of Panama. Removal of our forces may reduce the causes of anti- American feeling, but will not necessarily remove the possibility of sabotage, either by disaffected Panamanians intent on changing their regime or by Soviet-inspired or other anti- American groups desiring to cause damage to the United States at a time of international crisis or in time of war, or would it remove the external threat. Rather, it would increase the probability that any sabotage attempted or any external attack would be successful. There is also in the argument the underlying assumption that the security inter- ests of the U.S. would be served by permanent neutralization of the canal. It is clear that the security interests of the U.S. demand that the availability of the canal for its own ships be assured and that it be denied to its enemies. This in turn demands differentiation between use by the U.S. and use by its enemies or potential enemies whenever, in the sole judgment of the U.S. govern- ment, the security of the U.S. requires it. Such differentiation is incompatible with the principle of neutrality, would be made illegal by the Neutrality Treaty and after 1999 would be impracticable for the U.S. to effect. It is argued that in time of war, through resort to "force majeure," the U.S. could denounce or ignore the provisions of the treaty and effectively deny passage to enemy vessels, with or without Panamanian acquiescence or concurrence. (No one has suggested that this might be done in time of tension or in advance of hostilities, to prevent redeployment of potentially hostile ships.) If Panamanian agreement is obtained and as long as U.S. military forces remain within Pana- manian territory this would be readily possible. After 1999 it would be necessary to reintroduce military forces, not into U.S. territory where they now are, but into the territory of the Republic of Panama under Panamanian terms and after inevitable delays. A more likely scenario is one in which Panama would not agree to abrogation or violation of the treaty either in time of war or in periods of international tension which might or might not lead to war but which would demand the taking of prudent measures of increased security, including the denial of passage to potentially hostile ships. This scenario is assured if Panama should be under a Communist, Communist-oriented or neutralist government, and may occur even with a nominally friendly government in power which may wish to demonstrate its independence of dictation by the U.S. In such circumstances the U.S. would be forced to take military measures against Panama in Panamanian territory in clear violation of that country's sovereignty, under conditions where our forces stationed there would be at a decided disadvantage. After 1999 a full-scale invasion would be required which would undoubtedly succeed but might well result in the canal being rendered unusable for a pro- tracted period, since Panama would be in position to damage or destroy key installations, including the locks and Gatun Dam, if it should choose to do so, before U.S. forces could be introduced to provide protection. It has been maintained by proponents of the treaties that the U.S. will retain the right to intervene at any time to protect the canal. A careful reading of the treaties \sill disclose that they contain no provision whatsoever for intervention. Article IV of the Neutrality Treaty contains the following wording : "The United States of America and the Republic of Panama agree to maintain the regime of neutrality established in this Treaty, which shall be maintained in order that the canal shall remain permanently neutral . . ." Even if this wording were to be stretched to imply a U.S. right to intervene, it could only be claimed to enforced neutrality — since Panama will be the sovereign, and in actual possession of the canal after a certain date, a request for interven- tion would have to originate with Panama. [From the Congressional Record, Sept. 7, 1977 — S142S9] Panama Canal Giveaway Violates Constitution Mr. Gaen. Mr. President, during the recess, President Carter announced the completion of negotiations with the Government of Panama over new treaties governing the management of the Panama Canal. Early indications were that the President would press for early ratification of the treaties by the Senate. In my opinion, that would be most unwise, Mr. President, and would lead to almost certain rejection by this body. More recently, the President appears to have moderated his haste, and seems ready to accept the fact that he has a big selling job to do if the American people are ever to accept these treaties. Since his announcement. I have heard it argued that most Americans do not care very much about the Panama Canal, and are reacting emotionally to an issue which has little real significance. In my opinion, that is both true and not true. Arguments can be made that our defense is not affected by the canal, though equally good arguments can be made on the other side. Arguments can also be made that the loss of the canal would not have serious impacts on the economy (»f the United States, though again, there are some serious arguments to be made on the other side, particularly in view of the need to move petroleum from one coast to the other. But if we call those questions even, there is still a sense in which the Ameri- can people are quite correct in calling the Panama Canal an important '.ssue. The American people have a surer sense than the State Department does of the importance of psychological factors in international relati(Uis. In fact, as far as the State Department is concerned. Panama appears to be a riddle, wrapped in an enigma, stuffed in a burrito. The people recognize instinctively what is at play in Panama. It is a clear-cut case of international blackmail, and the Amer- ican people do not like it. It may very well be that the present state of affairs is less than fair to the Panamanians, though it must be said that the original treaty was not negoti- ated under duress. It may very well be that Panamanians should take a larger role in the operation of the canal itself. It may also l)e said that there should be less insuUition of the American community from the local Panamanian economy and society. But saying all that is quite different from saying that the United States should turn over effective control of the canal to Panama, whatever language is used to disgui.se what is happening, and allow itself to be pushed out of an area of arguably critical importance to the rest of the world. Some time ago. I published an article exploring the difference that a positive attitude in foreign i)olicy might make in Panama, and in some other critical areas around the world. I will not now repeat the arguments, except to say that even at tliis date, if we would stop beating our breasts over the injustice and inequity that altounds in the world, stop accepting responsibility for evils for which we are not responsible, and start asserting ourselves as practically the only example of fre(Hlom and justice in the world, we would find it easier to deal with dictators like Omar Torrijos. I liave no doubt that, even now. the Senate can operate on this projjosed treaty to make it acceptalde to the American people. As it stands, its terms are not advantageous to the United States, and no amount of talking by the Presi- dent can make them seem so. Unless it is made advantageous to the United States, and acceptable to our employers, the American people, it will fail, and I will be glad to help it fail. Mr. President, there is one more aspect of the Panama Canal argument that needs to be made, and since I am not a lawyer, I will turn to my colleague from Utah, Senator Hatch. Senator Hatch has written, in the current issue of the Conservative Digest, an excellent analysis of the constitutional arguments against the proposed treaty. As Senator Hatch points out in his article, the pro- posed treaties will set precedents with implications far beyond the simple for- (2.56) 257 eign policy defeat thev will constitute. Ratification will constitute acquiescence in yet another usun^ation of power by the executive. We must think twice be- fore condoning this usurpation. Mr. President, Senator Hatch's analysis should be read by every Senator prior to the vote. I ask unanimous consent that it l)e printed in the Record. There being no objection, the analysis was ordered to be printed in the Record, as follows : Panama Caxal Giveaway Violates Coxstitution (By Senator Orrin G. Hatch) Our venerable octogenarian, Ellsworth Bunker, veteran of more than 25 years service to the State Department, and Ambassador-at-Large directing negotiations with Panama for a new treaty, says that "the United States does not own the Panama Canal Zone." His assistant, Ambassador Sol Linowitz, claims that "the Panama Canal is a colonial enclave carried over from the early part of this century and which has caused bitter resentment and indeed hostility." The story of the I'anama Canal, as they tell it, is rather like the leftist folklore surrounding the history of capitalism. They would have us believe that "Yankee Imperialists'' descended upon a helpless people wrongfully took po.ssession of the isthnuis of Panama under the guise of a fraudulent treaty, and biiilt a canal to exploit the Panamanians in the selfish interests of commerce and militarism. Like the Greeks, Bunker and Linowitz now come bearing gifts. And what are these wondrous gifts? They are the gift of redemption for past crimes and sins against the people of Panama, and the prospect of better relations with our Latin American neighbors. To get them, we need only make a sift of tiie Panama Canal. Besides, America doesn't really need this Canal, we are told. What we really need, so far as the Canal is concerned, is a clear conscience, a cleansing of the American soul, a real purging of guilt and shame. What better way to do this than by simply giving the Panama Canal away? Just so there are no hard feel- ings, we'll even go so far as to pay the Panamanians for taking it off our hands. And so, negotiations begun under Secretary Kissinger in 1974 for a new treaty with Panama are now in their final stages. On July 9, President Carter met with American and Panamanian negotiators in the White House, and stated that he was pleased with the progress of negotiations and with "Panama's very construc- tive attitude." Expressing hope that the accord could be signed in time to bring it to the Senate l>efore the Fall recess. Carter declared that the United States "will cooperate to the fullest degree to rapidly conclude an agreement for a treaty." The last remaining ol»stacle. it appears, is the question of "conscience money.*' In addition to the territory of the Canal Zone and the canal itself, which are valued at approximately ST billion, the Panamanians demand .^.j billion for our continued use of the canal and the rental of military bases. Forget, if you will, that we already own all of this free and clear, and that the Panamanians already enjoy the highest i>er capita income of any people in Central America because of the annuities and other benefits derived from our Canal. But $.') billion is ap- parently too much even for our "hard-headed" diplomats, who have indicated that "more realistic amounts" will have to be agreed upon before the treaty is concluded. In anticipation of the ratification struggle that lies ahead, the negotiators have ] een preparing the American people for acquiescence by attempting to discredit the treaty of 1903. One device relied upon rather extensively is the familiar one of rev. riting history. The object of this ploy is to lay a moral foundation for the surrender of the Canal l>y creating guilt feelings and redefining the terms of the original treaty. Thus the advocates of a new treaty have come up with the novel idea that we don't really own tlie Canal after all. and must return it to its "rightful owners." Tlie original treaty, they say, simply transferred "rights'' in the Canal Zone rather tlian full sovereign control — even though such an interpretation flatly contradicts the expressed intent of the 1903 negotiators and the terms of the treaty itself. They have also expressed the curious view that the Canal Zone is "leased" territory and that the United States pays a "rental" for its use. In truth, of course, the Canal Zone is not a leased area but a "grant in perpetuity" for the per- 258 petual maintenance, operation and protection of the canal. What Panama actually receives is an annuity, not a rental. Article II of the 1903 treaty grants to the United States "in perpetuity" the use, occupation, and control of the Zone — meaning ownership. Tlie word "lease" does not appear in the treaty with reference to the Canal Zone; but the word "grant" makes nineteen appearances. The phrase "in perpetuity" occurs seven times. The treaty, unlike a lease agreement, contains no provision for renegotia- tion and no terminal date for the obvious reason that it was intended to be a final and absolute transfer of sovereignty in perpetuity. Though an embarrassment to the negotiators, these are facts which they can easily manipulate, if not ignore; for once the treaty is signed, the question of U.S. sovereignty over the Canal will become moot. What the supporters of the treaty cannot ignore, however, are the political, military and legal realities of the situation. For one thing. General Omar Torrijos of Panama, who will take possession of the canal, is a dictator. His administra- tion is riddled with Marxists. These realities not only cast a cloud of suspicion on his intentions, but raise the issue of whether the Canal can be insulated against the harsh \\inds of ideology and political instability which so often sweep across Latin America. If the Canal were in the hands of this petty tyrant, the United States would surely find itself increasingly embroiled in Panama's internal affairs in order to maintain the Canal's security and protect the flow of Com.merce. For another, the American people are overwhelmingly against the giveaway of the Panama Canal. The drumming insistence of the negotiators that we must lie do^Ti and be sheared like sheep in the name of Latin American "justice" has not been convincing. More persuasive are American military leaders such as Admiral Thomas Moorer, former Chairman of the Joint Chiefs of Staff, and three former Chiefs of Naval Operations, who recently informed President Carter that "under the control of a potential adversary the Panama Canal would be- come an immediate crucial problem and prove to be a serious weakness in the overall U.S. defense with enormous potential consequences for evil." Little wonder that recent public opinion polls show that the American people oppose a new treaty by a ratio of 5 to 1. They understand the realities of the situation, even if Bunker and Linowitz do not. We may be thankful that, many of our representatives in Congress are already antagonized by the Administration's methods and procedures. Resentment is widespread because the members have neither been informed of the substance of negotiations nor asked to authorize them — as is customary. Laborins at their self- appointed task in secrecy, the negotiators have defied our constitutional process, realizing that they lack congressional support and constitutional authority for their actions. Though largely ignored by the press, constitutional issues of major propor- tions have recently surfaced in the Senate concerning the new treaty with Pan- ama, adding another wrinkle to the controversy. One issue involves the economic assistance provisions of the treaty. The negotiators have not told Congress how much money will be given to Panama, or whether it will come in the form of a cash grant or loan package. But one matter is clear : a treaty cannot appropriate funds. The Constitution expressly provides that "No money shall be drawn from the Treasury but in consequence of Appropriations made by law." This means that the approval of both houses of Congress, and not just the Senate, must be given in order to validate this type of treaty. The Administration, however, has given no assurances to Congress that it will definitely seek implementing legislation regarding the economic and financial arrangements contained in the treaty. The other issue is whether the President has the constitutional authority to transfer U.S. territory in the Canal Zone to the Republic of Panama by treaty and by-pass the House of Representatives. In hearings before the Separation of Powers Subcommittee of the Senate Judiciary Committee which I attended, legal advisors to the State Department argued that the President may make such a treaty because he possesses "concurrent" authority with Congress to give away U.S. property. Ratification of the treaty by the Senate, they stated, was all that was necessary. Under cross-examination, however, the witnesses were unable to give me a single valid judicial precedent for this extraordinary and unconstitu- tional view of the President's power. My own studies lead me to the conclusion that the proposed treaty with Pan- ama is unconstitutional, unless both Houses of Congress enact accompanying leg- i.slation authorizing the transfer of Canal territory. Article IV of the Constitu- 259 tiou states, "The Congress shall have the power to dispose of and make all need- ful Rules and Regulations respecting the Territory or other Property belonging to the United States." The courts have repeatedly ruled that this is an exclusive power of the full Congress. Any authority of the Executive to dispose of U.S. property, therefore, must first be derived from authority given by an Act of Congress. In light of these considerations, a constitutional crisis is about to erupt be- tween Congress and the President. There is no precedent in American history, to be sure, for the disposal by treaty, and without congressional authorization, of U.S. territory that has been acquired by purchase. Likewise, there is no precedent for the broad and sweeping exercise of the treatymaking power which the Presi- dent is now claiming. If he persists, and the Senate ratifies the treaty, Americans will lose more than the Canal, more than an important American territory, and more than a vital link in our strategic defenses and international trade. They will have lost another restraint on the powers of the President. "If the Executive is permitted to sidestep the House of Representatives on this vital constitutional issue of disposal of Canal property," John Murphy, Chairman of the House Merchant Marine Fish- eries Committee recently observed, "it will try to sidestep the Senate on another issue, and the Judiciary on still another. The very fundamental precepts of the Constitution are at stake and we have already had one instance in which the Exec- utive Branch attempted to expand its powers, resulting in the worst scandal in our nation's history — Watergate." [From the Congressional Record, Sept. S, 1977 — S14425] Panama Canal Treaties Mr. Thurmond. Mr. President, after careful consideration and study over a number of years, I have concluded that the Panama Canal is of such vital importance to the United States that it would be a serious error to cede it to the Republic of Panama as contemplated in the treaties which will be signed later today. I have made several trips to Panama to view firsthand the situation there. As recently as August 19-21 of this year, I traveled with Senator Helms of North Carolina and Senator Hatch of Utah on an inspection trip to view the canal. The more I learn about the situation there, and the more I am able to find out about the treaty to cede the territory and the neutrality treaty and their implications, the more convinced I am that the Senate should reject them. There are a number of considerations I would like to discuss, among them the defense, political, economic, and legal reasons to oppose ratification of the treaties. First, I will discuss national defense considerations. The canal permits a quick two-ocean response by our naval forces to any mili- tary emergency. As you are probably aware, four former Chiefs of Naval Op- erations have so attested in a personal letter to the President. These four great naval strategists, Admirals Anderson, Burke, Carney, and Moorer, have retired from the active service and speak with a free mind uninhibited by political con- siderations. Their assessment of a canal giveaway, as reflected in the warning to the President, is sobering to say the least. In their letter to the President they warned : "Loss of the Panama Canal, which would be a serious setback in war, would contribute to the encirclement of the U.S. by hostile naval forces, and threaten our ability to survive." Approximately 98 percent of our naval fleet can transit the canal. Only our larger aircraft carriers are unable to use it. It is well to bear in mind that the 8,000-mile journey around the Horn adds 3 weeks to interocean transit time and costs 10 times as much as passage through the canal. Clearly, movement of troops or supplies around the Horn is hardly an acceptable alternative to use of the canal. As long as the United States retains sovereignty over and title to the canal, our Government maintains practical control. Under the neutrality ar- rangement proposed in the treaty, we lose practical control. Not only that, but according to members of the State Department negotiating team who briefed me, we oblige ourselves to guarantee access to our enemies in time of war. For this reason alone, Mr. President, I would urge my colleagues to reject this treaty. Control of territory and access routes is one of the most important elements of successful military strategy. Unless we maintain control, we will be at the mercy of the Government which controls Panama. Now, :Mr. President, I shall turn to the question of the political importance of the canal and to foreign policy considerations. Closely related to the military importance of the canal is the strategic deter- rence which our presence in the canal area provides against Communist initia- tives in that part of the world. As our treaty negotiators were reaching the agreement in principle on ceding American ownership and control, the ink was barely dry on a new economic and commercial agreement between Panama and the Soviet Union. Apparently, as our Government prepares to evacuate that part of the world pursuant to the proposed treaty, the Soviets are preparing to move in. As might be expected, a canal give-away has other imi)licaf ions as well for our foreign ])olicy. Whether this nutans ;i further diniinishing of U.S. influence throughout the world is of great concern to me. It is part of a pattern of retreat whioli wp have established in Southeast Asia. South Korea, Western Europe, and possibly Taiwan? This misguided direction of our foreign policy engenders con- sternation on the part of our allies and audacity on the part of our adversaries. Mr. President, we cannot hoi)e to deal effectively willi other nations, and cer- tainly not to play a leadership role, if we yield to blackmail. That is the only way to describe the threats of violence in Panama and in the Canal Zone, and ( 200 ) 261 threats of sabotage to the canal, which treaty proponents are broadcasting far and wide, and using as their chief argument for ratification. If the Senate were to ratify a treaty in the face of such threats, it would show the world a craven attitude which is entirely alien to our national character and our history and which would invite further exploitation by others. Moreover, the present government in Panama is unstable and ill-prepared to run the canal. Panama has had 59 chief executives in 74 years. Under General Torrijos, who has ruled as dictator since 1968, public indebtedness has increased ten-fold, from $167 million to $1.5 billion. It is my prediction that, if the Torrijos regime gains control, such economic ineptitude will bankrupt the canal operation and oblige Panama to call upon other nations to take it over. Furthermore, the current government there has violated the present treaty 11 times within the past 2 years. This is not a record which inspires confidence in those of us who are being asked to approve a new, more generous treaty. The aspect of the Torrijos government though, which may be most significant for our purposes, is that it is a repressive dictatorship. Freedom House, the respected organization which ranks countries on the basis of human rights, gives Panama the lowest rating in Latin America. Panama received the same 1977 rating on political and civil liberties as the Soviet Union, and was rated even lower than Cuba. Frt^dom House is a nonpartisan organization which the State Department cites in its report to Congress pursuant to the provisions of the Foreign Assistance Act. At the time of its last report on January 30, 1977, Freedom House listed as members of its board such eminent citizens as Mr. Zbigniew Brzezinski, now Director of the National Security Council; former Senator Gale McGee, now Ambassador to the OAS ; Senator Jacob Javits ; Mr. Roy Wilkins, former executive director of the NAACP ; and other notable Americans. Mr. President, I ask unanimous consent that the Freedom House table of nations that sets out the comparative survey of freedom among the nations of the world be printed in the Record.^ There being no objection, the table was ordered to be printed in the Record, as follows : COMPARATIVE SURVEY OF FREEDOM-TABLE OF NATIONS Polit- ical rights 1 Civil rights 1 Status of free- dom 2 Out- looks Polit- ical rights 1 Civil rights 1 Status of free- dom 2 Out- looks Afghanistan.. . 7 7 6 7 NF NF Cuba 7 *6 4 6 NF PF FNF + Albania . . . . Algeria „ *6 6 NF Cyprus Czaechoslovakia . . - 3H- 7 Andorra „ a 4 PF Denmark 1 1 FF Angola . 6 6 NF Dominican Republic 4 *3 P Argentina 6 5 NF- + Ecuador... *6 4 PF Australia 1 1 F Eqypt - 5-f 4 PF + Austria 1 1 F El Salvador 3- 3 PF- Bahamas 1 2 F Equatorial Guinea 6 7 NF Bahrain 6 4 PF Ethiopia 7 6 NF Bangladesh.. 7 4? PF+ Fiji 2 2 F Barbados . . 1 1 Finland 2 2 F Belgium. . ... . 1 1 F France 1 *1 F Benin^ 7 7 NF Gabon 6 6 NF Bhutan ....... 4 4 PF Gambia.. 2 2 F Bolivia 6 ♦4 PF* Germany (East) 7 7 NF + Botswana 2 3 F Germany (West) 1 1 F Brazil 4 5 PF Ghana... ... . 7 5 NF Brunei 6 5 F Greece . ... 2 2 F Bulgaria *7 7 NF Grenada. . 2 4 PF 8 Burma . . . . 6 6 NF Guatemala. 4 3 PF Burundi 7 6 NF Guinea 7 7 NF Cambodia* . 7 7 NF Guinea-Bissau 6 6 NF Cameroon. *7 *5 NF* Guyana 3 PF Canada 1 1 F Haiti - i+ 6 NF Cape Verde Islands *6 *6 NF* Honduras ... ... 6 3 PF Central African 7 7 NF + Hungary 6 6 NF Republic. Chad Iceland.. . . .. 1 1 F 7 6 NF India 3- 5 PF Chile 7 5 NF + Indonesia 5 5 PF China (Communist) 7 7 NF Iran 6 6 NF China (National) *5 5 PF* Iraq 7 7 NF Colombia 2 3 F Ireland.. . 1 n F Comoro Islands... . 5 *3 PF Israel... 2 3 F Congo Republic 5 6 PF Italy *2 *i F Costa Rica I 1 F Ivory Coast 6 5 NF See footnotes at en »See p. 453. d of table, p. 262. 262 COMPARATIVE SURVEY OF FREEDOM— TABLE OF NATIONS— Continued Polit- Status ical Civil of free- Out- fights i rights 1 dom2 look 3 Jamaica 1 3— F Japan 2 1 F Jordan 6 6 NF Kenya 5 5 PF Korea (North) 7 7 NF Korea (South) 5 6- PF? Kuwait 6- 5- NF- Laos 7- 7- NF- Lebanon 4 4 PF Lesotho 5 4 PF Liberia 6 4 PF Libya 7 6 NF Liechtenstein 4 2 PF Luxembourg 2 1 F Malagasy Republic 6- 5 NF- Malawi 7 6 NF Malaysia 3 4 PF Maldives 4 4 PF Mali 7 7 N F Malta 1 2- F' Mauritania 6 6 NF Mauritius 3 2 F Mexico 4 4- PF Monaco 4 2 PF o Mongoiia 7 7 NF Morocco 5 5 PF -f Mozambique 7— 7— NF Nauru 2 2 F Nepal 6 5 NF Netherlands 1 1 F New Zealand 1 1 F Nicaragua 5 *5 PF Niger 7 6 NF Nigeria 6 *4 PF + Norway 1 1 F Oman 6 NF Pakistan *4 5 PF Panama 7 6 NF Papua-New Guinea *2 2 F* Paraguay 2 6- NF- Peru 6 4 PF + Philippines 5 5 PF Poland 6 6 NF -f Portugal 2+ 2-f F+ Polit- Status ical Civil of free- Out- rights 1 rights 1 dom 2 looks Qatar ♦5 5 PF* Rhodesia 6 5 NF Rumania ... „ 7 6 NF + Rwanda „ 7 5 NF San Marino 2 2 F Sao Tome and Principe.. 5 5 PF? Saudi Arabia. . . 6 6 NF Senegal . 6 4 PF + Seychelles . . . 1+ 2 F Sierra Leone 6 5 PF Singapore . . 5 5 PF Somalia 7 *7 NF South Africa 4 5 PF + Spain 5 3+ *3 PF + Sri Lanka 2 F* Sudan. . . 6 6 NF Surinam 2 2 F Swaziland . 6 4 PF Sweden 1+ 1 F Switzerland 1 1 F Syria . 6 *6 NF Tanzania 6 6 NF Thailand 6— 6— NF— + Togo 7 6 NF Tonga _.. 5 3 PF? Transkei 6 5 NF Trinidad and Tobago 2 2 F -f Tunisia 6 5 NF Turkey 2 3 F Uganda 7 7 NF 7 6 NF United Arab Emirates... *5 5 PF* United Kingdom 1 1 F United states 1 F Upper Volta k 5- PF + Uruguay *6- NF- + Venezuela *1 7 2 7 F NF Vietnam . Western Samoa 4 2 PF + Yemen (North) 6 5 NF Yemen (South) 7 7 NF Yugoslavia 6 6 NF Zaire 7 6+ NF Zambia 5 5 PF ' The scales use the numbers 1-7, with 1 comparatively offering the highest level of political or civil rights, and 7 the lowest. A plus or minus following a rating indicates an improvement or decline in the rating since the last survey. A rating marked with an asterisk (*) has been changed since the last survey due to reevaluation by the author. This does not imply any change in the country. For further information on the scale and survey see "Freedom at Issue," January-February 1973, p. 2ff. » A free state is designated by F, a partly free state by PF, and a not free state by NF. » A positive outlook for freedom is indicated by a plus sign, a negative outlook, by a minus, and relative stability of ratings by a zero. The outlook for freedom is based on the problems the country is facing, the way the government and people are reacting to these problems and the longer run political traditions of the society. A judgment of outlook may also reflect an imminent change, such as the expected adoption of a meaningful new constitution. * The name of Dahomey has been changed to Benin. Cambodia is now officially Kampachea. Mr. Thurmond. In fact, we are about to legitimize the regime of General Torri jos by awarding him the triumph of concluding this treaty. If the administration were serious about human rights, it would not even negotiate with this man until he held free, open, and honest elections. This is selective morality at its worst. Now, Mr. President, I shall turn to the economic considerations involved in the current debate. The economic interest which the United States has in the canal, like our defense interest, is so vital to us that we can ill-afford to gamble with it. In 11)75, approximately 14,000 ship transited the canal ; 45 percent of which originated in the United States, and 23 i^ercent of which were bound for the United States. No other nation has an equal economic stake in the canal. The canal, though, is important to all of the world's commercial nations, since 96 per- cent of the world's ocean-going vessels can transit it. The canal is just this year assuming an additional commercial importance to the United States as Alaskan oil begins to flow. When the Alaskan pipeline reaches its full capacity, it will yield 1.2 million barrels of oil a day. The west coast of the United States can accommodate only 700,000 a day. This means that 263 approximately 500,000 barrels a day cannot be used on the west coast, and must be transported to the east. No pipeline has yet been constructed across the United States, and the trip around the Horn, as has been demonstrated, is not economi- cally feasible. Unhindered use of the Panama Canal is critical until an adequate pipeline can be constructed. At the present time, the United States has an overall investment in Panama of $7 billion. By the year of our total evacuation under the terms of the treaty, that interest will have grown to $9.3 billion. Contrary to popular argument, control of the canal by the United States serves the best economic interests of the people of Panama. In 1976, U.S. agencies pur- chased over $29 million worth of goods in Panama, and we paid over $108 million in wages to non-U.S. citizens. U.S. private investments amount to 50 percent of the capital investment in Panama. And U.S. employees spent $39 million there. If we retain sovereignty and control over the canal, it is my suggestion that we propose a modernization which will mutually benefit the people of the United States and the citizens of Panama. In the past, I have supported the Terminal Lake Third Lock plan. This would provide for approximately $2.5 billion in capital investments over a 5- to 10-year period. In this effort, many Panamanian nationals would be used as subcontractors and the result would be an infusion of American capital into the Panamanian economy. As the canal is modernized, any unneeded land in the zone can be ceded to Panama. It would also be appropriate to make a realistic adjustment in the annuity. With the foregoing considerations in mind, Mr. President, I turn now to the legal question posed by the current debate. Article IV, section III, clause 2 of the Constitution unequivocally gives Con- gress the "power to dispose of and make all needful rules and regulations respect- ing the territory or other property belonging to the United States." Congress enacted the Spooner Act in 1902 to provide for the construction and defense of an interocean canal, and pursuant to this act the United States acquired its property rights in the Canal Zone in perpetuity. It is thus my belief that a treaty to cede property rights in the Canal Zone to the Republic of Panama requires prior authorization by Congress. On the other hand, the State Department contends that under the treaty power clause contained in article II, section 2, the President holds concurrent authority to dispose of U.S. property. The counterargument is that the property clause in article IV limits the treaty power clause where the disposition of property is con- cerned. That seems to me to be obvious. Since the Executive claimed the authority, however, to dispose of U.S. property without first seeking prior authorization from Congress, and actually proceeded to do so, I joined with a number of other Senators and Congressmen to seek a declaratory judgment on this significant separation of powers question. Both the District Court for the District of Columbia and the Court of Appeals in the District refused to consider the merits of the case on the basis that the issue was premature. At that time, they said, we did not know the specifics of any proposed treaty. In June, the Supreme Court declined to grant certiorari. Now, Mr. President, we do know the specifics of the treaties. We know, too, that the State Department continues to ignore the the questions of prior authori- zation and the role of the House of Representatives in disposition of property by treaty. The only way to settle the questions is to seek a determination by the courts. I am pleased, therefore, to inform the Senate that Senators Jesse Helms, James A. McClure, and I, together with Congressmen Daniel J. Flood, Lawrence P. McDonald and M. Gene Snyder, and William R. Drummond, a resident of the Canal Zone, will again file suit as soon as the President formally sends the treaties to the Senate. I am further pleased to inform the Senate that five States will join as parties to the action, and that because of the importance and timeliness of the issue, we will seek original jurisdiction in the U.S. Supreme Court. We will be repre- sented by the distinguished attorney, George S. Leonard, of the District of Columbia, who has so ably testified before the Subcommittee on Separation of Powers of the Senate Judiciary Committee on the legal problems raised in respect to the Panama Canal negotiations. It is not the function of our courts to enforce public opinion. Nevertheless, it is worth noting that public opinion is strongly against a giveaway of the Panama Canal. The margin was 3 to 1 in a nationwide poll by Opinion Research Corp., and 9 to 1 in my own poll of South Carolinians. 99-592—78 18 264 Its individual members are also charged with the responsibility of responding to the public will. In this matter, the two responsibilities converge. The disposi- tion of the Panama Canal under the proposed treaty is unwise, unwanted and unconstitutional. I urge the Senate to do all it can to prevent it. This Senate is charged with the responsibility of protecting the interests of the legislative branch and of monitoring the separation of powers betw^een the three coordinate branches of our Government. Mr. President, I wish to thank the distinguished Senators who yielded time to me. I now yield the floor. [From the Congressional Record, Sept. 8, 1977 — S14437] Poll Shows Close Margin on Panama Canal Treaty Mr. Ciiafee. Mr. President, the Panama Canal treaties have generated the most intense interest around the country and while polls are useful tools for anal- ysis, the complexity of the issues before us demands more careful study on our own. Plowever, in view of the larjjely one-sided margin that is shown in the mail that most of us have been receiving on the Panama Canal issue, I would like to call to the attention of my colleagues the recent Gallup poll on how^ Americans feel about the Panama Canal treaties on a nationwide basis. The level of support indicated by this survey might be surprising to those who have suggested that Americans are opposed to the treaties by as much as a 3-to-l margin. While the issues involved in these treaties may not yet be readily familiar to many Americans, I am hopeful that in the course of our debates the American public will maintain an open mind. Mr. President, I ask unanimous consent that this most recent Gallup poll be printed in the Record. There being no objection, the Gallup poll was ordered to be printed in the Record, as follows : In National Public Opinion Referendu^^i U.S. I'i blic Closely Divided on Panama Treaty : 39 Percent Approve ; 46 Percent Disapprove (By George Gallup) Princeton, N..T. — President Jimmy Carter's decision to go to the American people to win support for the Panama treaty comes at a time when the public is closely divided on this controversial issue. In the first nationwide survey — in effect, a national referendum — 39 percent of those who have heard or read about the treaty express approval, while 46 percent disapprove of the proposed new treaty between the U.S. and Panama, which calls for the U.S. to turn over ownership of the canal to Panama at the end of this century but to retain protective rights and responsibilities. Fifteen percent of the aware group are undecided. Sharp differences are found on the basis of population groups. Persons with a college background, for example, lean 49 to 40 percent in approval of the treaty. Republicans disapprove by a 2-to-l margin, while Democratic voters and inde- pendents are about evenly divided. what voters are saying Among those who approve of the new treaty is a 59-year-old stock speculator in Miami. Fla. "It is important to have more cooperation with Latin America. People in Latin America feel the canal is just another example of American colonialism." he said. Another who approves is a 54-year-old college professor in Knoxville. Tenn. "By the year 2000, the canal will have little strategic or economic value to us. The supertankers of tomorrow won't be able to use it. There is more emotion than logic connected with it (the treaty) and we have done very well in making this treaty," he said. A 60-year-old retiree in Washington, D.C, opposes the treaty, "I disapprove of the treaty for two main reasons : First, we have billions of dollars invested in it and it has been our property for three-quarters of a century : second, Panama is a dictatorship v/ith no freedom for its citizens — how could they control the canal better than we?" This question was asked first in the survey : "Have you heard or read about the proposed new treaty between the U.S, and the Republic of Panama regarding the Panama Canal?"' (2G5) 266 The results show three in four nationwide saying they have heard or read about the treaty. About 9 in 10 among the college-educated group express awareness. Awareness levels are lower among women than men, and younger persons than older, as seen below : Have heard or read alout Percent National 76 Men 83 Women 69 18 to 29 years 65 30 to 49 years 76 50 and over 82 College 89 High school 71 Grade school 56 Republicans 84 Democrats 73 Independents 74 All persons in the survey were next asked this question : "The proposed new treaty between the U.S. and Panama calls for the U.S. to turn ownership of the canal to Panama at the end of this century. However, the U.S. will maintain control over the land and installations necessary to operate and defend the canal. Do you approve or disapprove of this proposed new treaty?" Here are the findings based on those who have heard or read about the treaty : APPROVE OR DISAPPROVE PANAMA CANAL TREATY? (In percent) Approve Disapprove No opinion Nationwide 39 46 15 College - - 49 40 11 High school. 32 52 16 Grade school 28 46 26 18 to 29 yr 44 44 12 30 to 49 yr 45 43 12 50 and over 30 51 19 East - 43 42 15 Midwest - -.. 37 50 13 South 35 47 18 West - 38 49 13 Republicans 31 58 11 Democrats. 43 41 16 Independents.. 41 43 16 The results reported today are based on interviews with 1.025 adults, out of a total sample of 1,356 adults, 18 and older, conducted in person in more tlian 300 scientifically selected localities are the nation August 18-22. Panama Canal Treaty Mr. MusKiE. Mr. President, because of the broad interest of my constituents and, indeed, all Americans, in the provisions of the new Panama Canal Treatie.-^, I believe the full text of those treaties should be available to as many people as possible. Accordingly, I ask unanimous consent that a copy of that text be printed in the Record. There being no objection, the treaty was ordered to be printed in the Record, as follows : Panama Canal Treaty The United States of America and the Republic of Panama. Acting in the spirit of the Joint Declaration of April 3, 1904, by the Representa- tives of the Governments of the United States of America and the Republic of Panama, and of the Joint Statement of Principles of February 7, 1974, initialed 267 by the Secretary of State of the United States of America and the Foreign Min- ister of the Republic of Panama, and Acknowledging the Republic of Panama's sovereignty over its territory, Have decided to terminate the prior Treaties pertaining to the Panama Canal and to conclude a new Treaty to serve as the basis for a new relationship be- tween them and, accordingly, have agreed upon the following : ARTICLE I Ahrogation of prior treaties and estaNishment of a new relationship 1. Upon its entry into force, this Treaty terminates and supersedes : (a) The Isthmian Canal Convention between the United States of America and the Republic of Panama, signed at Washington, November IS, 1903 ; (b) The Treaty of Friendship and Cooperation signed at Washington, March 2, 1936, and the Treaty of Mutual Understanding and Cooperation and the re- lated Memorandum of Understandings Reached, signed at Panama, January 25, 1055, between the United States of America and the Republic of Panama ; (c) All other treaties, conventions agreements and exchanges of notes between the United States of America and the Republic of Panama, concerning the Pana- ma Canal which were in force prior to the entry into force of this Treaty ; and (d) Provisions concerning the Panama Canal which appear in other treaties, conventions, agreements and exchanges of notes between the United States of America and the Republic of Panama which were in force prior to the entry into force of this Treaty. 2. In accordance with the terms of this Treaty and related agreements, the Republic of Panama, as territorial sovereign, grants to the United States of America, for the duration of this Treaty, the rights necessary to regulate the transit of ships through the Panama Canal, and to manage, operate, maintain, improve, protect and defend the Canal. The Republic of Panama guarantees to the United States of America the peaceful use of the land and water areas which it has been granted the rights to use for such purposes pursuant to this Treaty and related agreements. 3. The Republic of Panama shall participate increasingly in the management and protection and defense of the Canal, as provided in this Treaty. 4. In view of the special relationship established by this Treaty, the United States of America and the Republic of Panama shall cooperate to assure the uninterrupted and efficient operation of the Panama Canal. ARTICLE n Ratification, entry into force, and terminaiion 1. This Treaty shall be subject to ratification in accordance with the constitu- tional procedures of the two Parties. The instruments of ratification of this Treaty shall be exchanged at Panama at the same time as the instruments of ratification of the Treaty Concerning the Perment Neutrality and Operation of the Panama Canah signed this date, are exchanged. This Treaty shall enter into force simultaneously with the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, six calendar months from the date of the ex- change of the instruments of ratification. 2. This Treaty shall terminate at noon, Panama time, December 31, 1999. ARTICLE III Canal operation and management 1. The Republic of Panama, as territorial sovereign, grants to the United States of America the rights to manage, operate, and maintain the Panama Canal, its complementary vrorks, installations and equipment and to provide for the orderly transit of vessels through the Panama Canal. The United States of America ac- cepts the grant of such rights and undertakes to exercise them in accordance with this Treaty and related agreements. 2. In carrying out the foregoing responsibilities, the United States of America may : (a) Use for the aforementioned purposes, without cost except as provided in this Treaty, the various installations and areas (including the Panama Canal) and waters, described in the Agreement in Implementation of this Article, signed this date, as well as such other areas and installations as are made available to 268 the United States of America under this Treaty and related agreements, and take the measures necessary to ensure sanitation of such areas ; (b) Make such improvements and alterations to the aforesaid installations and areas as it deems appropriate, consistent with the terms of this Treaty ; (c) Make and enforce all rules pertaining to the passage of vessels through the Canal and other rules with respect to navigation and maritime matters, in accord- ance with this Treaty and related agreements. The Republic of Panama will lend its cooperation, when necessary, in the enforcement of such rules ; (d) Establish, modify, collect and retain tolls for the use of the Panama Canal, and other charges, and establish and modify methods of their assessment; (e) Regulate relations with employees of the United States Government; (f) Provide supporting services to facilitate the performance of its respon- sibilities under this .irticle ; (g) Issue and enforce regulations for the effective exercise of the rights and responsibilities of the United States of America under this Treaty and related agreements. Tlie Republic of Panama will lend its cooperation, when necessary, in the enforcement of such rules ; and (h) Exercise any other right granted under this Treaty, or otherwise agreed upon between the two Parties, 3. Pursuant to the foregoing grant of rights, the United States of America shall, in accordance with the terms of this Treaty and the provisions of United States law, carry out its responsibilities by means of a United States Government agency called the Panama Canal Commission, which shall be constituted by and in con- formity with the laws of the United States of America. (a) The Panama Canal Commission shall be superv^ised by a Board composed of nine members, five of whom shall be nationals of the United States of America, and four of whom shall be Panamanian nationals proposed by the Republic of Panama for ai^poiutment to such positions by the United States of America in a timely manner. (b) Should the Republic of Panama request the United States of America to re- move a Panamanian national from membership on the Board, the United States of America shall agree to such a request. In that event, the Republic of Panama shall propose another Panamanian national for appointment by the United States of America to such position in a timely manner. In case of removal of a Pana- manian member of the Board at the initiative of the United States of America, both Parties will consult in advance in order to reach agreement concerning such removal, and the Republic of Panama shall propose another I'anamanian national for appointment by the United States of America in his stead. (c) The United States of America shall employ a national of the United States of America as Administrator of the Panama Canal Commission, and a Pana- manian national as Deputy Administrator, through December 31, 1989. Beginning January 1, 1990, a Panamanian national shall be employed as the Administrator and a national of the United States of America shall occupy the position of Deputy Administrator. Such Panamanian nationals shall be proposed to the United States of America by the Republic of Panama for appointment to such positions by the United States of America. (d) Should the United States of America remove the Panamanian national from his i)osition as Deputy Administrator, or Administrator, the Republic of Panama shall propose another Panamanian national for appointment to such position by the United States of America. 4. An illustrative description of the activities the Panama Canal Commission will perform in carrying out the responsibilities and rights of the United States of America under this Article is set forth at the Annex. Also set forth in the Annex are procedures for the discontinuance or transfer of those activities per- formed prior to the entry into force of this Treaty by the Panama Canal Company or the Canal Zone Government which are not to be carried out by the Panama Canal (Commission. n. The Panama Canal Commission shall reimburse llie Republic of Panama for the costs incurred by the Republic of Panama in providing the following public .services in the Canal operating areas and in housing areas set forth in the Agree- ment in Inii)lementation of Article III of this Treaty and occupied by both United States and Panamanian citizen employees of the Panama Canal Com- mission : police, lire protection, street maintenance, street lighting, street clean- ing, traffic management and garbage collection. The Panama Canal Commission shall i)ay the Repul)lic of Panama the sum of ten million United States dollars ($10,000,000) per annum for the foregoing services. It is Agreed that every three 269 years from the date that this Treaty enters into force, the co^ts involved in fur- nishing said services shall be reexamined to determine whether adjustment of the annual payment should be made because of inflation and other relevant factors' affecting the cost of such services. 6. The Republic of Panama shall be responsible for providing, in all areas com- prising the former Canal Zone, services of a general jurisdictional nature such as customs and immigration, postal services, courts and licensing, in accordance with this Treaty and related agreements. 7. The United States of America and the Republic of Panama shall establish a Panama Canal Consultative Committee, composed of an equal number of high- level representatives of the United States of America and the Republic of Panama, and which may appoint such subcommittees as it may deem appropriate. This Committee shall advise the United States of America and the Republic of Panama on matters of policy affecting the Canal's operation. In view of both Parties' special interest in the continuity and efficiency of the Canal operation ill the future, the Committee shall advise on matters such as general tolls policy, employment and training policies to increase the participation of Panamanian nationals in the operation of the Canal, and international policies on matters eeaceful settlement of the dispute as they may mutually deem appropriate. ANNEX Procrdurcfi for the ccsmt'wn or trnnsifGr of aetiritics carried out hp the Panama Canal Cnwpaini and the Canal Zone Government and illu,strative list of the functions that may he performed hy the Panama Canal Commission 1. The laws of the Rejmblic of I'anama shall regulate the exercise of private economic activities within the areas made available by the Republic of Panama for the use of the United Sttites of America pursuant to this Treaty. Natural or jurisdical i)ersons who. at least six months i)rior to the date of signature of this Treaty, were legally estaldished and engaged in the exercise of economic activi- ties in the former Canal Zone, may continue such activities in accordance witli the provisions of ])aragraphs 2-7 of Articb' TX of tliis Treaty. 2. The Panama Canal Commission shall not perform governmental or com- mercial functions as stipulated in i)aragraph 4 of this Annex, provided, how- ever, that this shall not be deemed to limit in any way the right of the United States of America to pertbrm those functions that may be necessary for the effi- cient management, operation and maintenance of the Canal. 277 3. It is niiderstood that the Panama Canal Commission, in the exercise of the rights of the United States of America with respect to the management, opera- tion and maintenance of the Canal, may perform functions such as are set forth helow hy way of illustration : a. Management of the Canal enterprise. b. Aids to navigation in Canal Waters and in proximity thereto. c. Control of vessel movement. d. Operation and maintenance of the locks. e. Tug service for the transit of vessels and dredging for the piers and docks of the Panama Canal Commission. f. Control of the water levels in Gatun, Alajuela (Madden) and Miraflores Lakes. g. Non-commercial transportation services in Canal waters, ii. Meteorological and hydrographic services. i. Admeasurement. j. Non-commercial motor transport and maintenance, k. Industrial security through the use of watchmen. 1. Procurement and warehousing, m. Telecommunications. n. Protection of the environment by preventing and controlling the spillage of oil and substances harmful to human or animal life and of the ecological equilibrium in areas used in operation of the Canal and the anchorages. o. Non-commercial vessel repair. p. Air conditioning services in Canal installations. (1. Industrial sanitation and health services. r. Engineering design, construction and maintenance of Panama Canal Com- mission in.stallations. s. Dredging of the Canal channel, terminal ports and adjacent waters. t. Control of the banks and stabilizing of the slopes of the Canal. u. Non-commercial handling of cargo on the piers and docks of the Panama Canal Commission. v. Maintenance of public areas of the Panama Canal Commission, such as parks and gardens. w. Generation of electric power. X. Purification and supply of water, y. Marine salvage in Canal waters. z. Such other functions as may be necessary or appropriate to carry out. in conformity with this Treaty and related agreements, the rights and responsi- l)ilities of the United States of America with respect to the management, opera- tion and maintenance of the Panama Canal. 4. The following activities and operations carried out by the Panama Canal Company and the Canal Zone Goveniment shall not be carried out by the Panama Canal Commission, effective upon the dates indicated herein : (a) UiK)n the date of entry into force of this Treaty : (i) Wholesale and retail sales, including those through commissaries, food stores, department stores, optical shops and pastry shops : (ii) The production of food and drink, including milk products and bakery products ; (iii) The operation of public restaurants and cafeterias and the sale of articles through vending machines : (iv) The operation of movie theaters, bowling alleys, pool rooms and other recreational and amusement facilities for the use of which a charge is payable : (v) The operation of laundry and dry cleaning plants other than those op- erated for official use : (vi) The repair and service of privately owned automobiles or the sale of petroleum or lubricants, including the operation of gasoline stations, repair garages and tire repair and recapping facilities, and the repair and service of other privately owned property, including appliances, electronic devices, boars, motors, and furniture : (vii) The operation of cold storage and freezer plants other than those op- erated for official use : (viii) The operation of freight houses other than those operated for official use : (ix) Commercial services to and supply of privately owned and operated vesseLs, including the construction of vessels, the sale of petroleum and lubri- cants and the provision of water, tug services not related to the Canal or other 278 United States Government operations, and repair of such vessels, except in situa- tions where repairs may be necessary to remove disabled vessels from the Canal ; ( X ) Printing services other than for official use ; (xi) Maritime transportation for the use of the general public; (xii) Health and medical services provided to individuals, including hospitals, leprosariums, veterinary, mortuary and cemetery services ; (xiii) Educational services not for professional training, including schools and libraries; (xiv) Postal services; (xv) Immigration, customs and quarantine controls, except those measures necessary to ensure the sanitation of the Canal ; (xvi) Commercial pier and dock services, such as the handling of cargo and passenjrers ; and (xvii) Any other commercial activity of a similar nature, not related to the management ojieration or maintenance of the Canal. (b) Within thirty calendar months from the date of entry into force of this Treaty, governmental sers^ices such as : (i) Police; (ii) Courts; and (iii) Prison system. 5. (a) With respect to those activities or functions described in paragraph 4 above, or otherwise agreed upon by the two Parties, which are to be assumed by the Government of the Republic of Panama or by private persons subject to its authority, the two Parties shall consult prior to the discontinuance of such activities or functions by the Panama Canal Commission to develop appropriate arrangements for the orderly transfer and continued efficient operation or con- duct thereof. (b) In the event that appropriate arrangements cannot be arrived at to ensure the continued performance of a particular activity or function described in para- graph 4 above which is necessary to the efficient management, operation or main- tenance of the Canal, the Panama Canal Commission may, to the extent con- sistent with the other provisions of this Treaty and related agreements, con- tinue to perform such activity or function until such arrangements can be made. AGREED MINUTE TO THE PANAMA CANAL TREATY 1. With reference to paragraph Ifc) of Article I (Abrogation of Prior Treaties and Establishment of a New Relationship), it is understood that the treaties, conventions, agreements and exchanges of notes, or portions thereof, abrogated and superseded thereby include : (a) The Agreement delimiting the Canal Zone referred to in Article II of the Int.eroceanic Canal Convention of November 18, 1903 signed at Panama on June 15, 1904. (b) The Boundary Convention signed at Panama on September 2. 1914. (c) The Convention regarding the Colon Corridor and certain other corridors through the Canal Zone signed at Panama on May 24, 1950. (d) The Trans-Isthmian Highway Convention signed at Washington on March 2, 1936, the Agreement supplementing that Convention entered into through an exchange of notes signed at Wasliington on August 31 and September 6, 1940, and the arrangement between the United States of America and Panama respect- ing the Trans-Isthmian Joint Highway Board, entered into through an exchange of notes at Panama on October 19 and 23. 1939. (e) The Highway Convention between the United States and Panama signed at Panama on September 34, 1950. (f) The Convention regulating the transit of alcoholic liquors through the Canal Zone signed at Panama on March 14, 1932. fg) The Protocol of an Agreement restricting use of Panama and Canal Zone waters by belligerents signed at Washington on October 10. 1914. (h) The Agreement providing for the reciprocal recognition of motor vehicle license plates in Panama and the Canal Zone entered into through an exchange of notes at Panama on December 7 and December 12, 1950. and the Agreement establi'-hing procedures for the reciprocal recognition of motor vehicle operator's licenses in the Canal Zone and Panama entered into through an exchange of notes at Panama on October 31, 1960. (i) Tlio General Relations Agreement entered into through an exchange of notes at Washington on May 18, 1942. 279 (j) Any other treaty, convention, agreement or exchange of notes between the United States and the Republic of Panama, or portions thereof, concerning the Panama Canal which was entered into prior to the entry into force of the Panama Canal Treaty. 2. It is further understood that the following treaties, conventions, agreements and exchanges of notes between the two Parties are not affected by paragraph 1 of Article I of the Panama Canal Treaty : (a) The Agreement confirming the cooperative agreement between the Panamanian Ministry of Agriculture and Livestock and the United States De- partment of Agriculture for the prevention of foot-and-mouth disease and rinderpest in Panama, entered into by an exchange of notes signed at Panama on June 21 and October 5, 1972, and amended May 28 and June 12, 1974. (b) The Loan Agreement to assist Panama in executing public marketing programs in basic grains and perishables, with annex, signed at Panama on September 10, 1975. (c) The Agreement concerning the regulation of commercial aviation in the Republic of Panama, entered into by an exchange of notes signed at Panama on April 22, 1929. (d) The Air Transport Agreement signed at Panama on March 31, 1949, and amended May 29 and June 3, 1952, June 5, 1967, December 23, 1974, and March 6, 1975. (e) The Agreement relating to the establishment of headquarters in Panama for a civil aviation technical assistance group for the Latin American area, entered into by an exchange of notes signed at Panama on August 8, 1952. (f ) The Agreement relating to the furnishing by the Federal Aviation Agency of certain services and materials for air navigation aids, entered into by an ex- change of notes signed at Panama on December 5, 1967 and February 22, 1968. (g) The Declaration permitting consuls to take note in person, or by au- thorized representatives, of declarations of values of exports made by shippers before customs officers, entered into by an exchange of notes signed at Wash- ington on April 17, 1913. (h) The Agreement relating to customs privileges for consular officers, en- tered into by an exchange of notes signed at Panama on January 7 and 31, 1935. (i) The Agreement relating to the sale of military equipment, materials, and services to Panama, entered into by an exchange of notes signed at Panama on May 20, 1959. (j) The Agreement relating to the furnishing of defense articles and services to Panama for the purpose of contributing to its internal security, entered into by an exchange of notes signed at Panama on March 26 and May 23, 1962. (k) The Agreement relating to the deposit by Panama of ten percent of the value of grant military assistance and excess defense articles furnished by the United States, entered into by an exchange of notes signed at Panama on April 4 and May 9, 1972. (1) The Agreement concerning payment to the United States of net proceeds from the sale of defense articles furnished under the military assistance pro- gram, entered into by an exchange of notes signed at Panama on May 20 and December 6, 1974. fm) The General Agreement for Technical and Economic Cooperation, signed at Panama on December 11, 1961. (n) The Loan Agreement relating to the Panama City water supply system, with annex, signed at Panama on May 6, 1969, and amended September 30, 1971. (o) The Loan Agreement for rural municipal development in Panama, signed at Panama on November 28, 1975. (p) The Loan Agreement relating to a project for the modernization, re- structuring and reorientation of Panama's educational programs, signed at Panama on November 19, 1975. (q) The Treaty providing for the extradition of criminals, signed at Panama on May 25, 1904. (r) The Agreement relating to legal tender and fractional silver coinage by Panama, entered into by an exchange of notes signed at Washington and New York on June 20, 1904, and amended March 26 and April 2, 1930, Mav 28 and June 6, 1931, March 2, 1936, June 17, 1946, May 9 and 24, 1950, September 11 and October 22, 1953, August 23 and October 25, 1961 and September 26 and October 23, 1962. (s) The Agreement for enlargement and use by Canal Zone of sewerage fa- cilities in Colon Free Zone Area, entered into by an exchange of notes Signed at Panama on March 8 and 25, 1954. 99-592—78 19 280 it) The Agreement relating to the construction of the inter- American high- way, entered into by an exchange of notes signed at Panama on May 15 and June 7, 1943. (u) The Agreement for cooperation in the construction of the Panama seg- ment of the Darien Gap highway, signed at Washington on May 6, 1971. (v) The Agreement relating to investment guaranties under sec. 413(b) (4) of the Mutual Security Act of 1954. as amended, entered into by an exchange of notes signed at Washington on January 23, 1961. (w) The Informal Arrangement relating to cooperation between the Ameri- can Embassy or Consulate, and Panamanian authorities when American mer- chant seamen or tourists are brought before a magistrate's court, entered into by an exchange of notes signed at Panama on September 18 and October 15. 1947. (x) The Agreement relating to the mutual recognition of ship measurement certificates, entered into by an exchange of notes signed at Washington on August 17. 1937. (y) The Agreement relating to the detail of a military oflScer to serve as adviser to the Minister of Foreign Affairs of Panama, signed at Washington on July 7. 1942. and extended and amended February 17. March 23, September 22 and November 6, 1959, March 26 and July 6. 1962, and September 20 and October S. 1962. (z) The Agreement relating to the exchange of official publications, entered into by an exchange of notes signed at Panama on November 27. 1941 and March 7, 1942. (aa) The Convention for the Prevention of Smuggling of Intoxicating Liquors, signed at Washington on June 6. 1924. (bb) The Arrangement providing for relief from double income tax on shipping profits, entered into by an exchange of notes signed at Washington on January 15. February 8. and March 28, 1941. (cc) The Agreement for withholding of Panamanian income tax from com- pensation paid to Panamanians employed within Canal Zone by the canal, rail- road, or auxiliary works, entered into by an exchange of notes signed at Panama on August 12 and 30, 1963. (dd) The Agreement relating to the withholding of contriliutions for ee en- titled to transit the Canal, irrespective of their internal operation, means of propulsion, origin, destination or armament, without being subjected, as a condi- tion of transit, to inspection, search or surveillance. However, such vessels may be required to certify that they have complied with all applicable health, sanita- tion and quarantine regulations. In addition, such vessels shall be entitled to re- fuse to disclose their internal operation, origin, armament, cargo or destination. However, auxiliary vessels may be required to present written assurances, certi- fied by an official at a high level of the government of the State requesting the ex- emption, that they are owned or operated by that government and in this case are being used only on government noncommercial service. 2. For the purposes of this Treaty, the terms "Canal." "vessel of war," "auxili- ary vessel," "internal operation," "armament" and "insi>ection" shall have the meanings assigned them in Annex A to this Treaty. ARTICLE IV The United States of America and the Republic of Panama agree to maintain the regime of neutrality established in this Treaty, w^hich shall be maintained in order that the Canal shall remain permanently neutral, notwithstanding the termination of any other treaties entered into by the two Contracting Parties. ARTICLE V After the termination of the Panama Canal Treaty, only the Republic of Pana- ma shall operate the Canal and maintain military forces, defense sites and military installations within its national territory. ARTICLE VI 1. In recognition of the important contributions of the United States of America and of the Republic of Panama to the construction, operation, and main- tenance, and protection and defense of the Canal, vessels of war and auxiliary vessels of those nations shall, notwithstanding any other provisions of this Treaty, be entitled to transit the Canal irrespective of their internal operation, means of propulsion, origin destination, armament or cargo carried. Such vessels of w^ar and auxiliary vessels will be entitled to transit the Canal expeditiously. 2. The United States of America, so long as it has responsibility for the opera- tion of the Canal, may continue to provide the Republic of Colombia toll-free transit through the Canal for its troops, vessels and materials of war. Thereafter, the Republic of Panama may provide the Republic of Colombia and the Repub- lic of Costa Rica with the right of toll-free transit. ARTICLE VII 1. The United States of America and the Republic of Panama shall jointly sponsor a resolution in the Organization of American States opening to accession by all States of the w^orld the Protocol to this Treaty whereby all the signatories wUl adhere to the objectives of this Treaty, agreeing to respect the regime of neutrality set forth herein. 2. The Organization of American States shall act as the depositary for this Treaty and related instruments. ARTICLE VIII This Treaty shall be subject to ratification in accordance with the constitu- tional procedures of the two Parties. The instruments of ratification of this Treaty shall be exchanged at Panama at the same time as the instruments of ratification of the Panama Canal Treaty, signed this date, are exchanged. This Treaty shall enter into force, simultaneously with the Panama Canal Treaty, six calendar months from the date of the exchange of the instalments of ratifica- tion. Done at Washington, this 7th day of September, 1977, in duplicate, in the English and Spanish languages, both texts being equally authentic. 283 ANNEX A 1. "Canal" includes the existing Panama Canal, the entrances thereto and the territorial seas of the Republic of Panama adjacent thereto, as defined on the map annexed hereto (Annex B), and any other inter-oceanic waterway in which the United States of America is a participant or in which the United States of America has participated in connection with the construction or financing, that may be operated wholly or partially within the territory of the Republic or Pan- ama, the entrances thereto and the territorial seas adjacent thereto. 2. "Vessel of war" means a ship belonging to the naval forces of a State, and bearing the external marks distinguishing warships of its nationality, under the command of an officer duly commissioned by the government and whose name ap- pears in the Navy List, and manned by a crew which is under regular naval dis- cipline. 3. "Auxiliary vessel" means any ship, not a vessel of war, that is ov^ned or operated by a State and used, for the time being, exclusively on government non- commercial service. 4. "Internal operation" encompasses all machinery and propulsion systems, as well as the management and control of the vessel, including its crew. It does not include the measures necessary to transit vessels under the control of pilots while such vessels are in the Canal. 5. "Armament" means arms, ammunitions, implements of war and other equip- ment of a vessel which possesses characteristics appropriate for use for warlike purposes. 6. "Inspection" includes outboard examination of vessel structure, cargo, armament and internal operation. It does not include those measures strictly necessary for admeasurement, nor those measures strictly necessary to assure safe, sanitary transit and navigation, including examination of deck and visual navigation equipment, nor in the case of live cargoes, such as cattle or other livestock, that may carry communicable diseases, those measures necessary to assure that health and sanitation requirements are satisfied. Protocol to the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal Whereas the maintenance of the neutrality of the Panama Canal is important not only to the commerce and security of the United States of America and the Republic of Panama, but to the peace and security of the Western Hemisphere and to the interests of world commerce as well ; Whereas the regime of neutrality which the United States of America and the Republic of Panama have agreed to maintain v;ill ensure permanent access to the Canal by vessels of all nations on the basis of entire equality : Whereas the said regime of effective neutrality shall constitute the best pro- tection for a Canal and shall ensure the absence of any hostile act against it; The Contracting Parties to this Protocol have agreed upon the following : article I The Contracting Parties hereby acknowledge the regime of permanent neu- trality for the Canal established in the Treaty Concerning the Permanent Neu- trality and Operation of the Panama Canal and associate themselves with its objectives. article II The Contracting Parties agree to observe and respect the regime of permanent neutrality of the Canal in time of war as in time of peace, and to ensure that vessels of their registry strictly observe the applicable rules. ARTICLE III This Protocol shall be open to accession by all states of the world, and shall enter into force for each State at the time of deposit of its instrument of acces- sion with the Secretary General of the Organization of American States. [From the Congressional Record, Sept 13, 1977 — S14733] The Canal Treaties: Reason or Risk? Mr. Harry F. Byrd, Jr. Mr. President, for weeks now the question as to whether the United States should sui-reuder control of the Panama Canal has dominated the news. It reached a crescendo last week when the President of Panama came to Washington and, along with President Carter, signed treaties which would end U.S. sovereignty over the canal and the Canal Zone. The signing of the treaties and President Carter's many appeals for support of the treaties have received tremendous television coverage. The television commentators and others in the news media have joined the bandwagon in seeking to drum up support among the public. It is time, I think, that the other side of the story be heard. I have delayed public comment until the text of the new treaties were available. They became available only last week. Careful reading has not reassured me that surrendering sovereignty over this important waterway is either wise or in the l>est military and economic interest of the United States. I have reached the conclusion, however, that these treaties will be very ex- pensive to the American taxpayer. Fortunately, the signing of the new treaties by President Carter and by the Panamanian dictator, Gen. Omar Torrijos, does not put such treaties into effect. Under our Constitution, any treaties negotiated by the President must be approved by the Senate of the United States by a two-thirds vote of that body. So the final decision as to whether the United States shall surrender i>erpetual sovereignty over the vital link between the Atlantic and the Pacific will rest with the Senate of the United States. At this point, I think some history is in order. This is not the first time a President has proix>sed surrendering our sovereignty over the Panama Canal and Canal Zone. In 1967, President Johnson put a head of steam behind Panama's resolve to wrest the canal away from undisputed American control. Draft treaties pre- pared in 1967 made concessions of Panama which many Members of Congress felt were unwise and which were, indeed, a submission to Panamanian political blackmail. So great was the congressional opposition to the proposed treaty that President Johnson never submitted the proposal to the Senate for consideration. I am pleased to say that I took an active and firm role in opposition to the Johnson proposal. I see no fundamental difference between the Johnson proposal and the Carter proposal. Each would surrender U.S. sovereignty. The only real difference is that the Carter proposal would be much more expensive to the American taxpayer. The Congress was told in 1967 that there would be a series of anti- American riots in Panama if the U.S. Oovernment did not give the Panamanians what they want. We are being told the same thing today. It is vitally important that the United States maintain a position of strength in Uatin America, and the pivotal point in our defense an-angements is the Panama Canal and the Canal Zone. I am persuaded that new treaties compromising our rights in the Canal Zone would weaken our country's defense posture in the Western Hemisphere — and, in addition, could be costly to the American consumer. After all rhetoric is stripped away, the question of whether these treaties should be ratified boils down to three basic questions : First, is it in the best economic and military interests of the United States? Second, what will it cost the American taxpayer — this year, next year, and in many years to come? (284) 285 And, third, should we abandon our sovereignty over this vital waterway. The Panama Canal is a strategic waterway of considerable economic and military importance to the United States. Its uninterrupted and efficient operation in the years ahead is an important U.S. interest. Proponents of the treaties insist that the treaties will safeguard our military and economic interests. But, in the same breath, these proponents argue that the canal is no longer important to the United States either economically or militarily. Misleading figures are used to try to diminish the economic importance of the canal to the United States. The Carter administration has publicized the figure of 8 percent as the amount of U.S. foreign trade that transits the canal. Yet, a figure which the administration neglects to cite is that 70 percent of all ships transiting the canal have the United States as their destination or their point of origin. Equally misleading arguments have been made concerning the military value of the canal. One argument is that U.S. aircraft carriers cannot transit the canal because of their size. This argument falls apart when one realizes that of the 461 Navy shiixs now in the active fleet, only the 13 aircraft carriers are unable to transit the canal. In other words, more than 97 percent of the U.S. Fleet is and will remain able to transit the canal. History has clearly recorded how relatively quickly we were able to move elements of the Atlantic naval fleet to the Pacific after the attack on Pearl Harbor in 1941. We were able to make this quick transfer because American shii>s were given priority passage under the terms of the existing treaty. The canal was alj^o heavily used during the Korean and Vietnam wars. To make it even more current, present defense plans call for a large number of Xavy ships to transit the canal in the event of an emergency. How can we assure ourselves we can do this if we do not control the canal? Can these important U.S. interests be adequately protected under the terms of the proposed treaties? The Carter administration maintains that they can, and points to the terms of the treaty which supposedly provide the United States with the permanent right to defend the neutrality of the canal from any threat for an indefinite period. Further, the administration maintains that U.S. warships will have the perma- nent right to transit the canal expeditiously and without conditions. However, upon close scrutiny of the actual texts of the treaties, the U.S. right to defend the neutrality of the canal is an implied right which is not clearly stated in the text. There is no provision for how the United States might endeavor to defend the neutrality of the canal and, depending on how one interprets article V of the Treaty Concerning Permanent Neutrality, the United States might be precluded from taking actions which might be necessary to defend the neutrality of the e to the hungry markets of the "lower forty-eight" contemplates shipment by tanker through the Panama Canal to Gulf and East Coast ports. POLITICAL AND PSYCHOLOGICAL FACTORS Even more compelling than the military and economic importance of the canal are the political and psychological considerations. Since the failure at the Bay of Pigs, U.S. foreign policy has suffered a series of severe defeats: we have been in retreat in many places around the world ; human errors, gloomy Spenglerian inde- cisiveness and confusion, poor leadership, and a lack of mobilized national will have led to the loss of Vietnam and our retreat from Southeast Asia, the debacle of Angola, the substitution of Communist for U.S. influence in Ethiopia — and. in the Caribbean, the tranformation of a friendly Cuba into a springboard for Soviet im- perialism in the Western Hemispliere. As the Puehlo, Mayaguez, and other inci- dents have shown, even second- and third-rate powers now dare to tweak Uncle Sam's nose. This process of losing not only face and prestige but also control has gone far in the Caribbean : it will accelerate greatly if we abandon the canal. The much- maligned domino theory was valid for Southeast Asia ; along with Vietnam. Cam- bodia and Laos fell to Communist governments ; Thailand expelled our forces ; the Philippines immediately announced a shift away from the United States and demanded a revision of our base agreements ; and all over the world, U.S. resolu- tion- and will were questioned. The domino theory is equally valid for the Carib- bean : if Panama goes, all our iH)siti(ms there may eventually follow. This is particularly true of Guantiinamo Bay at the western tip of Cuba, a base important for training and. because of its geographical location, commanding the Windward Passage. The treaty that governs our use of the base is remarkably similar in some ways to the Panamanian treaty. We enjoy at Guantanamo Bay '•complete Jurisdiction and control." or de facto exercise of sovereign rights, over some 20.000 acres of land and water. (There is a major difference; we concede in the Cuban case that "ultimate sovereignty" — not defined in the treaty — resides in Cuba, but our "complete jurisdiction and control" continue indefinitely until the T'nit<^d States voluntarily "abandons" the base or agrees mutually with Cuba ro revise the treaty). In other words, we lease The Cuban base and under the terms of tlie lease, which can be terminated only by mutual agreement, we hold Fun-ereiguty over it. But we do not — as we do in Panama — own the land or water. If we give up our sovereign rights in Panama and abandon the canal, it seems 297 certain that Castro — who long ago cut off the Gnantanamo Bay reservation from the rest of Cul)a — will reassert his past demands that the United States get out. Xor is •"Gitmo." as tJie navy calls it. the only threatened i)oint d'appui. Castro has never made any secret of his ambition to be, in his own right, a dominant ligure in the Caribbean and, with lielp from the Communist bloc, to make the neighboring island and mainland countries safe for Marxism. Indeed, his Com- munist and Third World alignment has led him with Moscow's encouragement and support far afield from the Caribbean, to the African continent, where Cuban tr(^ops armtHl by tJie Soviet Union have been oi)erating in various countries for years. By far the largest and most ambitious manifestation of Castro's determina- tion to make the world safe for communism was, of course, Angola, where a left- wing faction in a three-way civil war took over the country only because some 12.000 to 20,000 Cuban troops, transported chiefly by Moscow and armed and sup- plied by the Soviet Union, easily overran the primitive guerrillas that opposed them. Castro must be judged by his actions as well as by his words, and his ac- tions — endorsed and supported by the Soviet T'nion — are clear. Indeed, Castro and Brezhnev jointly reiterated during Castro's visit to Moscow in the spring of 1977 their determination to continue to support revolutions around the world — a public statement that seemed to cause few ripples in Washington, intent on "normalizing" relations with Cuba. At Russian urging, Castro abandoned some years of his overt attempts to sub- vert other Latin American countries ; his strategy is now more insidious because largely, tliough not entirely, covert. His Russian-trained agents operate secretly iu numerous countries, through propaganda, subversion, and infiltration of key government positions. He has encouraged and supported all left-wing governments in the Caribbean, with training missions, agents provocateurs guerrillas. His spore, which is to say the spore of Soviet communism, is everywhere in the area ; his agents have appeared in .Jamaica, Guayana. Puerto Rico, and Panama. Nor would "better relations" between Cuba and the United States halt these subversive manipulations; any Commmiist program includes, alongside the formal and overt implements of policy, their unofficial and covert counterparts. Even more important, a U.S. retreat from Panama would probably put the last nail in the coffin of the Monroe Doctrine. Until Castro took power and Cuba became a Soviet protectorate, this 150-year-old policy — that the Western Hemi- sphere was for the Americans — was a no-trespassiug sign to Moscow's imperial- ism. Under the Monroe Doctrine the Caribbean had been — particularly through- out the twentieth century — within tlie U.S. "sphere of influence," a term that to- day is too often misunderstood and denigrated. This southern sea has been as im- portant to us as Eastern Europe has been to the Kremlin. It has lost none of that importance, but communism in Cuba, fortified by the largest Soviet-trained and equipped army in Latin America, a Soviet submarine base at Cienfuegos, Soviet antiaircraft missiles in large numbers, and modern Soviet aircraft flying from Cuban bases, some of them piloted by Russians, has gravely threatened our predominance. A retreat from Panama would be certain, therefore, to further impair our po- litical and psychological position in the Carib))ean and throughout the world ; its specific effects cannot be forecast. It is clear, however, that a cession of sover- eignty by the United States, in the face of the open demands and threats of vio- lence made by Panama's Torrijo.s government with the overt backing of Castro and Moscow would weaken our power position, our prestige, and our pride. Gnantanamo Bay would be next to go. and the ripples would spread far. The world would again ask as it did after the PueNo. Vietnam, Angola : Is the United States a pai>er tiger? Are its will and resolution to l)e depended on? Where would Washington draw the line if not at its own back door? ARGUMENTS FOR ENDING U.S. SOVEREIGNTY All of these considerations appear to support so clearly the retention of the Panama Canal under U.S. sovereignty that one may well ask why the question of transferring the canal to Panama is even an issue. What possible arguments can be made for it ? There are, I think, three principal reasons for Washington's persistence in adhering to what the great majority of Americans (according to the polls) believe to be an aberration, a mistaken policy, namely, the relinquishment of sovereignty. These reasons are related and mutually reenforcing. 298 First, there is — particularly among our intellectuals, our literate and literary opinion molders, our academics, and our liberal political thinkers — what Rob- ert ,M, Utley has well described as "a national guilt complex that would expiate sin by bending history to modern social purposes." ^ This stems, I believe, from the great emphasis in the past two decades on civil rights (particularly for the Negro, the Indian, and minorities), the excesses of Watergate, the trauma of Vietnam, and blind frustration at the changing world about us. The American pride of the past has given way to the breast-beating shame of the present. This guilt complex has been particularly pronounced in that small but highly impor- tant group of managers and public servants and opinion formers who tend to make policy. The second reason is simply obfuscation — what has been described as "our lack of purpose, our strategic self-effacement, and our confusion." ^ These are particu- larly evident in the State Department's canal policy- There has been little evi- dence of firm, coherent, positive policy ; rather we have been diffident, divided, and defensive. Our great efforts have been largely patch-and-mend. Compromise and concession are essential parts of diplomacy, but when they are used merely to paper over cracks, they inevitably lead to defeat and retreat, especially when the adversary is aggressive, strong, and expanionist. A third reason is the change, since World War II, in the world around us — the end of empire (except the Soviet empire), the excoriation of colonialism, the gradual exhaustion of some U.S. raw materials such as oil, and the consequent increasing political and in some cases economic importance of a plethora of newly independent Third World countries. In particular, the ultimately successful seizure of control of the Suez Canal by Egypt has had an important influence, not only upon the government of Panama but also upon some of our own intellectuals. And now the chickens have come home to roost. As a result of all our past mistakes and fruitless concessions, we are facing a put-up-or-shut-up situation. The waffling of past administrations and, since the Suez takeover in 1956, a long series of concessions reached a point of no return in 1974 when Secretary of State Henry Kissinger, in a personal visit to Panama, initialed a document which set guidelines for the treaty negotiations that are now reaching their culmination. This Joint Statement of Principles proposed that at some future undetermined date the operation and defense of the canal would become a joint U.S. -Pana- manian responsibility, but that the canal and the U.S. territory of the Canal Zone would ultimately be transferred to Panama. This unprecedented action, which, in effect, would give to Panama territory over which the U.S. flag has flown for more than seventy years and the canal installations that have cost the U.S. taxpayer a total of perhaps $7 to $8 billion, w^as a unilateral action of the executive branch, unauthorized by Congress, indeed, unknown to most congressmen until after the fact. In brief, this is what the current debate and the battle still to come in the Senate are all about: will the Senate rubber-stamp Henry Kissinger's fait accompli, or will it reassert, as it has done on other issues in the past decade, its ancient prerogatives? THE HISTORY OF U.S. SOVEREIGNTY Many of the arguments for the switch in sovereignty and much of the conscious or subconscious motivation for it stem, in part, from ignorance or distortion of the manner in which the Panama Canal territory was acquired by the United States and of tlie wording of the original treaty of li)OS. S. I. Hayakawa, now a senator from California, spoke last fall in his eccentric campaign about our "stealing" the canal. Even President Carter has contributed to the perpetuation of myths spawned by revisionist historians and liberals. In his telephone call-in last March, he told a caller that "the treaty signed when Theodore Roosevelt was President gave Panama sovereignty over the Panama Canal Zone itself." But, contrary to those assertions from public oflicials who should know better, wo did not steal the canal, nor does Panama have residual, titular, or any other kind of sovereignty over it. The United States bought the canal territory — a strip across the Isthmus of Panama some fifty miles long and ten miles wide — at a cost to the American taxpayer that far exceeded the cost of the Louisiana purchase, the Mexican cession, the Florida purchase, the purchase of Alaska, or any otlier territorial acquisition. ' Kohort M. Utipy. The Contribution of the Frontier to the American Military Tradition, Ilnrmon Momorial Locture. U.S. Air Force Acftdeniy, Septoniber .30, 1076. - Ko.iror Fontalno, Introduction to Mario Laze. Panama Canal Oiveaivay, Special Study no. 1 (Washington, D.C. : Council for Inter-American Security, 1977). 299 An isthmian canal had been talked about for centuries and became an over- riding issue when the California gold rush drew thousands westward. But it was not until the turn of the century that Panama became the preferred locale; in fact, up until the digging began, many American exi^erts preferred a route through Nicaragua. A French company lost $50 million in an abortive attempt, ending in 1889, to construct an isthmian canal. In 1901, when the canal issue was still hot politically as a result of the Spanish-American war and the battleship Oregon's mad dash through the Straits of Magellan to bolster the Atlantic Fleet, the United States ratified the first of a series of enabling treaties which led to the construction of the Panama Canal. The Hay-Pauncefote Treaty of 1901 between Britain and the United States established guidelines for the operation of an isthmian canal, when completed; it provided (as did the arrangements governing the Suez Canal, then controlled by the French and the British) for unhindered passage by the ships of all nations. In that treaty — which is still operative — Britain agreed that the United States should have "the exclusive right of providing for the regulation and management of the canal" and that "no change of territorial sovereignty or of the international relations of the country or countries traversed by the . . . canal, shall affect the general principle of neutralisation or the obligation of the High Contracting Parties (Britain and the United States) under the present Treaty." ^ The Hay-Pauncefote Treaty, which would seem to preclude any transfer of sovereignty to Panama without British agreement, was followed in 1902 by the Spooner Act, in which Congress provided President Theodore Roosevelt w^ith $40 million with which to purchase the rights to an isthmian canal obtained by the French from Colombia. The act provided specifically for "perpetual" control by the United States of any canal that might be built. A Colombian representa- tive agreed to the transfer in perpetuity of a strip of isthmian land to the United States, but the government of Columbia rejected the treaty. In 1903, the Colombian province of Panama — which had once been independent and had occasionally seethed with revolt since its autonomy had been revoked by Bogota — saw its golden opportunity slipping through its fingers and falling to its rival, Nicaragua. With some French and American encouragement and help, a bloodless revolution occurred ; Colombian ships and troops were held at arm's length by a U.S. show of force, and the Republic of Panama, now one of the most economically favored of Latin American nations, was born out of a pesti- lential swampland. The establishment of Panama led almost immediately to the conclusion of the Hay-Bunau-Varilla Treaty between the United States and Panama in 1903. This treaty has governed the administration, operation, and control of the canal and the Canal-Zone ever since. The fundamental terms of this treaty, which Secretary Kissinger and before him President Johnson abandoned, are now at issue. The articles which have aroused so much discussion and debate are Articles 2 and 3. Article 2 states that "the Republic of Panama grants to the United States in perpefunitp [a reiteration of the language of the Spooner Act ; italics added] the use, occupation and control of" the Canal Zone, of which the dimensions are then described. Article 3 states^ "the Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article 2 . . . which the United States would possess and exer- cise if it were the sovereign ... to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." For this outright transfer of territory the United States paid the new republic an initial $10 million. In the same treaty, the U.S. government assumed the annual obligations of the Panama Railroad Company, a private company that had built a rail link across the isthmus many years before. Washington bought the entire stock of the com- pany as an aid to construction of the canal and undertook to pay to Panama the $2.50,000 annuity or "compensation" the private company had previously paid to Colombia annually. From this clause — the annuity or grant for the railroad right of way — has arisen the myth that we are paying Panama rent for the Canal Zone, although the term lease is nowhere mentioned in the treaties and the trans- fer of sovereignty is specific. 2 Treaty between the United States nnd Great Britain to Facilitate the Cnnstrnotion of a Ship Canal, sicrned in Washincrton, D.C., November 18, 1901 ; manuscript. U.S. Depart- ment of State, Archives, Treaty Series, no. 401 ; quoted in U.S. Congress. House, Subcora- mittee on the Panama Canal of the Committee on Merchant Marine and Fisheries, Panama Canal Finances, 94th Congress, 2nd session, 1977. 300 Ratification of this treaty were exchanged, and in May 1904 the foreism minister of the Republic of Panama formally notified Washington that the Repub- lic of Panama considered that its jurisdiction over the zone had ceased. The United States then purchased, in accordance with the treaty, title in fee simple to all privately owned lands within the Canal Zone, at a cost of something more than $4 million. Thus, the initial acquisition of the Canal Zone — entirely aside from the accumulation over the years of the annual annuity paid to Panama, the later transfer of millions of dollars worth of U.S. property to Panama, and the cost of construction and modernization of the canal itself — cost the United States some $54 million. The 1903 and 1904 agreements were implemented by provisional boundary agreements delineating the Canal Zone, in which Panama specifically ceded (the word is used four times) the land defined to the United States. The National Assembly of Panama ratified the agreements and used the word ceded in so doing. This provisional agreement was finalized and formalized in 1914 (when the canal was completed) and established the boundary lines "permanently." Following the initial treaties a three-year struggle to conquer yellow fever and reduce malaria, then endemic in the area, permitted the construction of what was and still is an engineering marvel. Many of the laborers who helped to build the canal were not, contrary to present belief, Panamanians, but blacks from West Indian islands. The canal was completed in 1914 at an initial cost (includ- ing the $54 million acquisition payments to Panama, the French company, and private landowners) of $366,()50,000. Together, this initial outlay and all the improvements, modernization, and maintenance of some seven decades now total almost $2 billion, exclusive of cumulative defense costs. In the year the canal was completed, disgruntled Colombia, which had always wanted more American dollars, settled its differences with the United States in the Thomson-Urrutia Treaty, which was finally ratified in 1922. As a result of this treaty the United States gave Colombia valuable canal and railroad transit rights across the isthmus and paid Colombia $25 million in compensation for the loss of the province that had become the Republic of Panama. Colombia recognized Panama's independence, formalized the boundaries between them, and acknowl- edged that title to both the canal and the railroad was vested "entirely and absolutely" in the United States.* Partly as a belated result of the settlement with Colombia and the formal recognition by Bogota of Panama's independence, the original treaty of 1903 wns renegotiated in 1936 to eliminate what had become an obsolescent clause. The U.S. guarantee of Panama's independence was cancelled, at Panama's request, and Panama, encouraged by Franklin D. Roosevelt's Good Neighbor policy, won many other concessions. Most important was the elimination of the right granted the United States in the original treaty to what amounted to "eminent domain" throughout the Republic of Panama, that is the right to use any defense sites it required outside the zone. Also abrogated was the right of the United States to keep order in the Panamanian cities of Colon and Panama, located near the Atlantic and Pacific entrances to the canal respectively. In addition. Panama was granted customhouse sites in U.S. Cristobal and Balboa and a corridor of legal easement over the zone. Despite current contentions by the State Department that the 1936 treaty re- visions recognized Panama's sovereignty over the Canal Zone, it is clear that in both wording and intent the treaty actually reemphasized the sovereignty, in perpetuity, of the United States. At the time, Under Secretary of Statp Sumner Welles, anticipating what wns to come, attached a memorandum to the treaty noting that both the Panamanian foreign minister and the Panamanian ambassador had stated that the treaty met fully every request Panama might ever make. The Welles memorandum quoted the two Panamanian officials as stating that their country liad received "everything that Panama could pos.sibly want from the United States and hence- forth would request no more concessions." ^ During World War II. air bases and defense sites deemed necessary to defend the canal were acquired and utilized during hostilities in the Repul»lic of Panama, but only at a price, paid to Panama, of about $1 billion. A 19.55 treaty revision increased the annual compensation or annuity, made some property adjustments, * Honse Snbrommlttee on the Panama Canal of the Committee on Merchant Marine anfl rolnmhla. Sottlement of Differences. ArtiHe 1. n 123 RStntPTTipnt of Alfred T. Rohweppe. "Panama Tanal Treaties." In TT.S. Coneress. House, CongreHHional Record, 95th Congress, 1st session, March 3 1977, p. H1713. 301 which turned over ahoiit $40 million worth of U.S. property to Panama, and clarified the status and improved the employment opportunities of Panamanians working in the zone. The implicit shift in U.S. policy But the formal treaty revisions have perhaps been less important than some of the executive actions taken by various administrations. One of the most symbolic of these actions, which was widely publicized in Latin America, occurred in 1946 when Alger Hiss, then head of the Office of Political Affairs at the State Department, sent to the new United Nations a list of so-called U.S. -occupied territories, which included the Panama Canal Zone. This action signalled a split in the State Department, with Spruille Braden, then assistant secretary of state for Latin America, in furious opposition to Hiss. Even more important, the action of Dean Acheson, then acting secretary of state, in backing Hiss forecast the beginning of an implicity shift in State De- partment policy about the sovereignty of the Canal Zone.^ Panama's increasingly clamorous claims to sovereignty over the zone received striking symbolic support when President Eisenhower ordered the Panamanian flag to be flown at one location in the zone. His action followed some minor student riots in Panama City in 1959 and an invasion of the zone by Panamanian students who planted their flag at several locations. Eisenhower's action was interpreted by the Panamanian government and, at least symbolically and implicitly, by many in the State Department as recog- nizing Panama's residual, or ultimate, sovereignty over the zone. Later, Presi- dent Kennedy authorized the flying of the Panamanian flag at some seventeen different locations in the zone. Still unsatisfied, Panamanian mobs rioted in 1964 and attacked the zone. They were tacitly encouraged by the Panamanian leadership, but directly led and egged on by "persons trained in communist countries for political action." ' These mobs consisted of "known and identifiable communists, members of the com- munist party of Panama and people who belonged to the vanguard of National Action, which is . . . the Castro Communist Party in Panama." ® Partly as a result of the bloodshed in these riots (twenty-three Panamanians and four U.S. soldiers were killed) and the insistence of the State Department that the canal was really the sovereign territory of Panama, President Lyndon Johnson negotiated a series of treaties with Panama (never ratified) basically similar to the Kissinger-Tack agreement, which have provided the parameters for the present treaty negotiations. Congressman Gerald Ford commented : "With Cuba under the control of the Soviets through its puppet Castro, and with in- creased communist subversion in Latin America, a communist threat to the Panama Canal is clearly a grave danger. The American i)eople will be shocked by the terms of this treaty." ' As President, however, Ford supported the reversion of sovereignty to Panama. Now President Carter is supporting the same view, though both have paid lip service to the necessity of joint U.S.-Panamanian control and defense. The debate over sovereignty It has been necessary to summarize the history of the canal and the mutations in the original treaty and in our relationship with Panama in order to under- stand — and to refute — two of the basic arguments made by proponents of turning over the Panama Canal to Panama. These arguments are that Panama retains, and always has retained, sov- ereignty and that, in any case, the great big United States has exploited poor little Panama in the past and should make amends (part of the w^arp and woof of the guilt trauma, which particularly seems to infect intellectuals). The sovereignty argument derives from two sources : the "if clause in Article 3 of the 1903 treaty, which appears to qualify U.S. sovereignty over the zone, and the use of the phrase titular soA^ereignty by Secretary of State John Hay and « The state Department's shift In policy has been perceptible In the last thirty years, particularly since the Suez Canal crisis, but opinion on the sovereignty issue is not unanimous — within either the State Department or the executive branch of government — even today. The Defense Department's attitude has ranged from aggressive opposition to foot dragging. " Ambassador Ellsworth Bunker In a public statement, 1964, cited in Lazo, Panama Canal Giveaway, p. 12. 8 Joseph A. Califano, Jr., then assistant secretary of defense in the administration of President Johnson in a public statement, 1964, cited in Lazo, Panama Canal Giveaway, p. 12. * Lazo, Panama Canal Giveaway, p. 12. 302 Secretary of War William Howard Taft soon after the treaty was signed. Panama itself has not directly raised the issue of titular sovereignty ; instead, some of its administrations have claimed at various times and under various circumstances that Article 3 preserved the republic's sovereignty over the zone. The issue of residual or titular sovereignty has been discussed on many occa- sions in the United States since 1903. Secretary of State Hay never conceded the validity of the theory, and termed the concept at best a "barren scepter," ^° Taft, then secretary of war, discussed the theory in a long statement presented to the Senate Committee on Interoceanic Canals on April 18, 1906. He noted that Article 3 "gives rise to the obvious implication that a mere titular sovereignty is reserved to the Panamanian government," and continued : "Now, I agree that to the Anglo-Saxon mind a titular sovereignty is like what Governor Allen, of Ohio, once characterized as a 'barren ideality,' but to the Spanish or Latin mind, poetic and sentimental, enjoying the intellectual refinements, and dwelling much on names and forms, it is by no means unimportant." Taft later explained that titular sovereignty really meant, in pragmatic terms, that if, at some future time, the United States decided to abandon the canal, it would turn it over only to Panama, which had ceded it to the United States originally, and to no other nation. Later, as President, Taft visited Panama, and told the Panamanians that they had given the United States sovereignty and jurisdiction over part of their country. Still later, in 1930, when he was chief justice of the United States, in the case of Luckenhach Steamship Co. v, Vnited States he noted that the theory of titular sovereignty was "the subject of diverging opinions." But in the same opinion, he cited as one of the precedents the case of Wilson v, Shaiv, a unani- mous Supreme Court opinion of 1907 which interpreted the 1903 treaty as having "ceded" title over the zone to the United States, Taft quoted the 1907 opinion, which stated : "It is hypercritical to contend that the title of the United States is imperfect, and that the territory described does not belong to this nation, be- cause of the omission of some of the technical terms used in ordinary conveyances of real estate " ^ Throughout the decades various secretaries of state and attorneys general of the United States have declared in unequivocal terms that the United States holds full sovereignty and title over the Canal Zone, In 1923, Secretary of State Hughes vehemently insisted the United States had full and sovereign rights to govern and regulate and control the Canal Zone, He added — ironically in view of recent developments : "It was an absolute futility for the Panamanian Gov- ernment to expect any American administration, no matter what it was, any President or Secretary of State, ever to surrender any part of these rights which the United States had acquired under the Treaty of 1903." " And as recently as the early 1970s, the Supreme Court let stand a U.S. Fifth Circuit Court of Appeals ruling, referring to both the 1903 and 1936 treaties, which declared that the "Canal Zone is an unincorporated territory of the United States over which Congress exercises 'complete and plenary authority.' " " History and the law appear to indicate in no uncertain terms that there is no merit whatsoever to the concept that the treaty of 1903 vested so-called titular sovereignty or residual sovereignty in Panama. The wording, to repeat, is clear and unequivocal : "The Republic of Panama grants to the United States in per- petuity the use, occupation and control" of the Canal Zone. "The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned . . . which the United States would possess and exercise if it were the sovereign . . . to the entire exelusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." (Italics added.) 1" ITonso Subcommittee on the Panama Canal of the Committee on Merchant Marine and Fisheries, Panama Canal Finances, p, .398. '1 T])id, r>. 402. This sf)urce includes some of the most thorouprh discussions of the povorelfjnty issue in the public record. Particularly important are the T>i?res cited, which include a memorandum written in 1059 from Governor W. E. Potter of the Canal Zone to th« Honorable Plorbert C. Ilonner, chairman of the Committee on Merchant Marine and Fisheries of the House of Representatives on the subject "Sovereignty over the Canal Zone." '2 Luckenbach Steamship Co. v. Fnited States, 280 U.S. 173; 50 Sup. Ct. 148. Wilson v. Shaw. 204 U.S. ; 27 Sup. Ct., 233. 23.'.. " TTouse, Subcommittee on the Panama Canal of the Committee on Merchant Marine and Fisheries. Panama Canal Finances, p. 400. ^* Statement by Alfred T. Schwep])e. The Panama Canal Treaties, p. ni71.?. See also Don.ild Dozer. Panama Canal Series, no. 1, p. 4, a National Education Project, Emergency Committee to Save the U.S. Canal Zone, PO Box 300.'54, Santa Barbara, California: The case cited Is U,S. v. Husband R, Roach, 406 U.S. 935 (1972). 303 The State Department's current contention that the treaty does not mean what it says (a complete reversal of its interpretation of the treaty during our first forty to fifty years in Panama) is in flat contradiction with its attempts to negotiate a new treaty. What is being negotiated is a transfer of sovereignty. One cannot transfer sovereignty unless one exercises it. The United States has, and will retain until Congress decides otherwise, complete sovereignty and con- trol over the Canal Zone in perpetuity. The myth of U.S. exploitation The other argument, that the United States has exploited Panama, is obvious nonsense. Panama had been no more than a pestilential swamp in 1903 ; it is a potentially prosi>erous little nation today almost entirely because of Uncle Sam's munificence and the golden flood of dollars that poured into the region because of the Canal. In addition to the approximately $2 billion spent by the United States in acquiring, building, maintaining, and improving the canal and its supporting infrastructure in the Canal Zone, the United States has spent, over the years, some $6 to $7 billion on the military defense and security of the canal, much of which has found its way into Panamanian pockets. To offset these expendi- tures, about $1,125 billion has been paid back into the U.S. Treasury in tolls and other revenues, leaving the U.S. taxpayer in the hole over the seventy years of our hegemony in the zone to the tune of almost $8 billion. These figures are in themselves an index of U.S. policy. The United States has regarded the Panama Canal as a major strategic asset but also as an interna- tional utility of great benefit to the world. Tolls have been kept low purposely, and the canal has been open impartially to the ships of all nations, in accordance with the Hay-Pauncefote Treaty with Britain. There is no question that it is the canal and its efiicient operation and the tre- mendous economic stimulus provided by direct and indirect U.S. grants that have made little Panama, with its 1.7 million people, a viable, if restless, entity. The canal, to Panama, is the goose that laid the golden egg. The country could not exist without it. Consider some figures : In 1975 Panama received — including an annuity which now totals $2.32 million per year — some $236.9 million from the United States, of which about $103 million was paid in wages and retirement and disability benefits to Panamanians employed in the zone. About 10.000 people, 72 percent of the total work force of the Panama Canal Company and the Canal Zone govern- ment, are Panamanian nationals; other thousands work for the U.S. military. The canal is larger than any other single source of employment in Panama. Be- tween 1946 and 1973, according to House Appropriations Committee hearings, Panama was the recipient of $342 million in total U.S. aid, more per capital than any other country in the world. Net income to the Panamanian government ori- ginating in the zone totalled about 12.5 percent of the gross domestic product of Panama in 1975. In addition to these direct economic infusions Panama has received all sorts of benefits from literally hundreds of projects. A bridge and highway across the canal were built at U.S. expense to link the two parts of Panama ; the coun- try's deep-water ports are U.S. built and operated ; its principal international airfield was U.S. built and its transisthmian road and railroad were U.S. con- structed or operated. It water supply comes largely from reservoirs and purfi- cation systems constructed by the United States. Its sanitation system was largely a product of U.S. organization and equipment ; until some years ago. when by mutual agreement the responsibility was transferred to Panama, the United States collected the garbage in the terminal cities of Panama and Colon and directed the mosquito elimination program which safeguarded the health of residents in Panama and the Canal Zone alike. U.S. -owned merchant ships, flying Panama's flag of convenience, add to the revenues in Panama's coffers, and tourism attracted primarily by the canal provides a stream of dollars, particularly for the merchants in Panama City, a free port. U.S. private capital has invested fairly heavily in hotels and other projects or in direct loans to the Panamanian government, and a number of the largest U.S. banks have established branches in Panama City. AH of this golden stream has made Panama — despite its unstable governments, mismanagement, and a greedy elite — one of the most favored nations in Latin America. If "poor little Panama" has been exploited, none of the economic, heiilth, or social statistics show it. It has one of the highest GNPs per capita among all 304 nineteen Latin American nations ; it had, from 1960 to 1974. a per capita growth rate surpassed only, and barely, by that of Brazil : until 1975 it had one of the lowest inflation rates in Latin America ; thanks to American medicine, infant mortality has been the lo\A'est in all Latin America and the mortality rate, sec- ond lowest. Panama's literacy rate is considerably higher than most in the re- gion, and its life expectancy has been fourth among all the Latin American nations. Far from being exploited, it is quite clear that Panama has derived benefits from the American presence in the Canal Zone that have made it fortunate iimong nations. The canal is Panama's single greatest revenue source. Tlie ex- ploitation myth is just that — a propaganda ploy fosted by Panama's politicians, by Castro's Cuba, and by the Soviet bloc to help force the United States out of the zone. It has no basis in fact. THE VIEW FROM LATIN AMERICA These two completely groundless arguments for giving away the canal are often supi>orted by two others — usually advanced by Panama — that have made some impression, at least in the public media, in the United States. First, the Latin American nations are unanimously in favor of the transfer of the canal, it is said : and second, if the United States does not how to Panamanian demands, it will face gunfire and disruption in the zone (as in 19G4), sabotage of the canal or zone installations, or even guerrilla warfare. Both arguments should be ers of the Torrijos administration to promise bloodshed unless Torrijos gets control of the canal. He told a student audience a few months ago that members of the guard would be the first to fall. Much of this rodomontade can be dismissed as breast-beating machismo, but not all of it. When addiessed to volatile people are particularly to fanatics, it is deliberately inflammatory, and it is intended as psychological blackmail. Unfor- tunately few U.S. newspapers have rei)orted the excessive rhetoric of Torrijos and his associates or the instances of internal repression and terrorist activities : thus, the impression, seemingly fostered by the State Department, that there is a stable- government in Panama has been reinforced. The silence encourages more harass- ment and repression and an extension of terrorism. A more serious form of terrorism would be sabotage against facilities in the zone, including pumping stations, power plants, dams, the Gatun spillway, and the lock gates. Modern explosives and the ease of procuring them (with help from Cuba and the Soviet T'nion). the large numbers of Panamanian citizens who work on the canal or in the zone, and the very openness of the zone to such attack would facilitate the task. There are. in most places, no fences or obstacles to access ; the zone is just across the street from Panamania territory and no docuniputs are required for entry. Sal)otage could be a serious threat. And yet there are ameliorating consider- ations. A successful blockage of the canal, particularly if Gatun Lake were- drained or both sets of locks put out of commission, would kill the goose that laid the golden egg. Panama's relative prosperity is entirely dependent upon 309 the canal. If the canal were closed, thousands of Panamanian employees would be thrown out of work, and they could well represent a dissident force within Panama. Economic conditions would deteriorate in Panama to a point of no return : Torrijos juid his regime would almost certainly he finished regardless of what else hapi)ened. And sabotage on a sufficient scale to paralyze the canal is not easy to accomplish ; it was prevented during World War II, Korea, and Vietnam. But the incitement of street mobs led by what Ambassador Ellsworth Bunker described in 1964 as "persons trained in communist countries" is a tactic which is entirely possible, easy to arrange, and hard to prevent. A mob rampag- ing from the National University or the slums of I'anama City could threaten and perhaps overrim parts of the Canal Zone, particularly if U.S. troops w^ere held in barracks or were ordered to hold their fire. It could conceivably bum, loot, and destroy U.S. property in the zone and perhaps injure or kill U.S. citizens. The seriousness of any such action would depend almost entirely upon the sup- port given "the street" by the Panamanian National Guard and/or by infil- trated Cuban or Soviet forces, operating covertly. The National Guard is seem- ingly rather formidable in size — some 8.000 men. though less than 2,000 of them combat-trained and equipped — and armed chiefly with modern U.S. infantry weapons (including some armored cars, which the State Department, in its iri- scrutible wisdom, allowed to be sold to Panama recently). But it has no staying power: the guard — ^a paramilitary police force — is well trained in riot control but has virtually no heavy weapons and its supplies and communications and stocks of foofl and fuel could sustain it in any actual paramilitary or combat situation only for a few days. Nevertheless, if the guard participated in any numbers in an attack on the zone or stood aloof, as it did in 1964, there is no doubt that blood, and perhaps considerable amounts of it. would be shed on both sides. Such action, if obviously supported by the Panamanian government, w^ould represent a self-defeating threat to that government even more than a threat to U.S. sovereignty over the canal. Still another possibility is the gradual institution of a kind of guerrilla war- fare — nit-picking, perhaps, but persistent and drawTi-out. This seems unlikely if only because the Panamanians are in no way similar to the Yietcong in tempera- ment; discipline, or resolution, and in any case, the fragile structure of the gov- erment and the establishment in Panama would be incapable of standing the protracted strain of such an effort. PEACE AT ANY PRICE? Nevertheless the distinct possibility of a physical confrontation — perhaps an armed one — must be faced. This does not mean that w^e must cut and run. The avoidance of bloodshed is devoutly to be desired, but for some things we must be prepared to fight. If we establish as our goal peace at any price — if, faced with the threat of force, we continuously concede and compromise — we shall lose the world. Since the Bay of Pigs the United States has been in retreat. The commu- nization of Cuba, the defeat in Vietnam and the loss of southeast Asia, the administration's promise to withdraw U.S. troops from South Korea, the triumph of African, Cuban, and Soviet Marxism in Angola, the fumbling American policies in Africa, and the siren slogan of "no more Vietnams" have all lent substance to the gloomy Spenglerian-Solzhenitsyn vision of decline and fall. Somewhere the line must be drawn — this far and no farther. Sometime the resolution and will of the American people must be made manifest. Panama is the place and now the time. Throughout the world, Soviet communism has tried to secure control of, or influence over, the global maritime choke points. For a considerable period the Soviet Union was dominant in Egypt and the Suez Canal, and a pro-Soviet Communist underground, smashed just in time, came close to making that dominance permanent. Now, rebuffed in Egypt. Soviet commu- nism is highly influential on the Horn of Africa, which gives access to the Red Sea and the southern approaches of the Suez Canal, and it is jockeying for posi- tion to threaten the Strait of Bab-el-Mandeb, through which most of the world s oil traffic from the Persian Gulf flows. In Indonesia, on the flank of the Malacca Strait, it came within a hair's breadth, in Sukarno's day, of assuming power. In West Africa, Nigeria and j\ngola. notably provide facilities for Soviet naval vessels close to the important South Atlantic shipping routes. In Southern Africa, a vital geographic area "3 Lazo, Panama Canal Giveaway, p. 12. 310 which dominates the important shipping routes around the Cape of Good Hope, Moscow has been making slow gains. It is, therefore, no accident that the Panama Canal has been the object of so much Soviet and Communist attention. A Communist Panama, in control of the canal and dominated or greatly influenced and supported by Havana and Mos- cow, would indeed represent another major defeat for the United States and a strategic victory for communism, this time in an area vital to the United States, If we will not stand fast in our own backyard, if we compromise and equivocate and retreat about an issue as vital as the Panama Canal and an area as strategic as the Caribbean, where will we stand? Alexander Solzhenitsyn, is his book Wanilng to the West, sums up the dilemma, the crisis, of which Panama is a part : We are at "a turning point in history," he says facing implacable Commu- nist enemies, who are united in one aim — the destruction of capitalism and of the social order of the West. The myth of control without sovereignty The answer from those who advocate retreat evades the issue. American sup- porters of a transfer of sovereignty to Panama try to make the shift seem a minor adjustment which will ensure happy relations with a friendly and stable Panama and stress that "control" of the canal would remain in our hands. In the 1976 campaign, Jimmy Carter ducked the sovereignty issue, but said unequivocably, "I would never give up complete control or practical control of the Panama Canal Zone. . . Yet control without sovereignty is doublespeak. Torrijos has stated that withdrawal of U.S. troops and the complete elimination of the American presence — including management and operational personnel — from the area is his goal. Control without sovereignty has inevitably led, in all instances where it has been attempted, to loss of control. To cite but two examples out of many : A government changed in Libya and the great air base there, built entirely with U.S. dollars, was closed to us. Greece and Turkey quarrelled over Cyprus, and U.S. bases in those countries, some of them highly important to U.S. security, were closed or limited in their operations simply because we were not sovereign — that is, in paramount control. United States sovereignty simply means that within the paramaters of U.S. law, the United States holds supreme power over the region in question, unchal- lengeable by any other power. Our sovereignty over the Canal Zone has been untainted and absolute, but how we operate the Panama Canal has always been subject to the provisions of the Hay-Pauncefote Treaty with Britain — which requires equality of treatment for the shipping of all nations. Colombian treaty rights would also be involved in any treaty revision ; as Congressman Daniel J. Flood has said, the projected transfer of sovereignty would open a "Pandora's box of difficulties." Without sovereignty it is clear that we shall not be able to carry out the terms of the Anglo-American treaty, nor shall we be able, regardless of the word- ing of any attempted compromise solution, to "control" the canal. If we transfer sovereitinty over the canal to Panama — an act that seems to be, under the Hay- Pauncefote Treaty, legally questionable unless Britain agrees — we should leave the isthmus, lock, stock, and barrel ; our "control" would be completely ineffective, probably after protracted wrangling, unending disputation, and perhaps repeated clashes. Again, to quote Congressman Flood : The operation of the Canal by the United States on an extra-territorial basis in a land of endless intrigue and turmoil could only result in endless conflicts and recriminations. Besides, it would result in the removal of an island of stability on the isthmus that has often served as a haven of refuge for Panamanian leaders seeking to escape assassination. One of the most recent Panamanians to seek refuge there was Senora Torrijos, the wife of Panama's chief of government, during an attempt to depose her husband while he was out of the country." If we are to retain the canal, there cannot be any compromise on the issue of sovereignty ; if we are going to scuttle and run, let us do it completely, with no double talk. We must not retain responsibility without authority. \ew York Times, Octobpr 8. 1976, p. A18. ^ Spooch l)v Congressman Flood before the National Aviation Club, Washington, D.C., April 22, 1974. 2« Ibid. ?>11 FACING THE PROBLEM Thus, we have foUoAved a long straight road to a point of no return since the days when Christian Herter, alarmed by student rioiting, persuaded President Eisenhower to allow the Panamanian flag to fly, along with the stars and stripes, in the Canal Zone. Ever since that day, American Presidents, supported by State Department policies of concession, have greatly encouraged Torrijos and his predecessors to press for the transfer of sovereignty. We face, therefore, a dilemma of our own making, from which there is no escape. If Panama's hopes of sovereignty are dashed — as they must be — frustration, coupled with emotional volatility, may well lead to a brief explosion of violence. What should we do? We must face the problem head-on. Rejection of any treaty transferring sovereignty is not enough. Washington must officially announce that the United States is — and will remain, in perpetuity — sovereign in the Canal Zone. Within that parameter, there is, however, room for maneuver on less impor- tant problems. A third set of locks and a deeper waterway — the construction of which was started but suspended in World War II — may well be required by world trade in the next century ; as early a resumption of this project as economic conditions permit should be a high priority and would have a beneficial effect on Panama's now stagnant economy. The annuity paid to Panama — now $2.32 million annually — might be increased somewhat to provide for in- flation. Some profits from the canal operation, when the canal operates in the black again, might be passed on, in recognition of improved productivity, to Panama Canal employees regardless of citizenship. Many of the personnel prob- lems that are irritants to good relations must be solved. Most important should be a well-organized public relations campaign by Washington to correct, in this country, in Panama, and elsewhere, the distorted image of the ugly American which has grown up around the Canal Zone. Morale in the Canal Zone Partly because of our own mistakes, partly because of the growth among some American canal employees of a "colonial ghetto" mentality, partly because of the sheer contrast between the neat middle-class order of the Canal Zone and the slum misery that lies cheek-to-jowl with it just across the street, but largely because of skillful and heavily financed Panamanian and Communist propaganda, the Canal Zone's American population have come to be unfairly identified in too many minds — particularly in the minds of the liberals — as coloninlist exploiters. The image is flawed ; most of the Americans who work in the zone are simple, average people living in a simple, low-middle-class style, willing to be friendly, wanting to be liked. It is true, however, that over the years the close contacts and friendly relations of the first generation of "ditch-diggers" with the in- digenous population have been weakened. Some of the sons and daughters of the first generation live in claustrophobic insularity ; too few of them speak Spanish or take an interest in the culture of Panama. Similarly, there is far too little effort within Panama or elsewhere in Latin America to advertise the better aspects of U.S. culture. Nor have the Panamanian workers in the Canal Zone been unfairly treated, as is to often claimed. They are subject, along with U.S. citizens, to U.S. minimum wage laws. Until 1955, when at the request of the Panamanian govern- ment the privilege was in large part revoked, they were able to shop at U.S. commissaries and stores in the zone, at prices considerably lower than those that prevailed in Panama. A good many of them lived in the zone in U.S.- fumished quarters. Their rates of pay are considerably higher than those in Panama — in some cases two to four times as high. Their children attend U.S.- supported schools in the zone, some of which teach in Spanish a curriculum emphasizing Spanish and Latin American culture. Many objective observers be- lieve the Panamanian employees of the canal live in the best of both possible worlds. Yet there are flies in paradise. Most U.S. citizens employed in the Canal Zone have received a 15 percent "tropical differential" not paid to Panamanians. (This is now to be largely but gradually phased out.) Higher-paying, so-called security positions are reserved for U.S. citizens. Two school systems, one for Panamanians and one for U.S. citizens, and two systems of housing allocation, have prevailed ; they are now being merged. The Panamanian employees of the 99-592—78 21 312 canal, despite the benefits tliey receive, expect and are demanding througli their unions exactly the same benefits the U.S. employees receive. Little things loom large in today's Canal Zone and they affect U.S. employees even more than the disgruntled Panamanians. The U.S. employees have resisted what they believe to be a gradual but persistent erosion of the benefits they have enjoyed; they feel strongly that with inadequate and insufficient housing in the zone, U.S. citizens should have preference; many of them object strongly to what they believe will prove to be the destruction by merger of the U.S.- supported school system. They have other gripes. Wage freezes, cuts, and reductions all along the line, some of them forced by the recession and the necessity of reducing costs, the elimination of some medical and hospital serv- ices, reclassification of jobs, and the prospect of future cuts and reductions have angered them. They see their jobs threatened by Panamanian replacements, and above all they face the uncertainty of the future — perhaps the complete elimination of all jobs held by U.S. citizens in the zone. The reaction on both sides is natural and understandable. The concessions made to Panamanian employees have merely made them want more. The several thou- sands of U.S. citizens employed by the canal have seen those concessions as a threat to their own standard of living, and this, along with the uncertainty of the future, has depressed their morale to what Governor of the Canal Zone Harold Parfitt described recently as the lowest point in history. So low, indeed, that the canal has been closed twice — in 1973 and 1976 — by "sick-outs" or strikes of its Americans employees, actions which hurt their own cause but dramatized their grievances. In 1973 the canal's 80 pilots (only a handful of them Panama- nian) walked off the job; in 1976, about 700 essential employees, all American, closed down the canal. Both events — indicative of the tremendous deterioration in the "legacy of pride" the canal workers once held — symbolize the insecurity and instability in the zone itself. These problems are a direct product of the long drawn-out, off-again-on-ngain treaty negotiations ; the entire area has been living in a limbo of uncertainty and frustration for a decade. Until the United States finally and unequivocally rejects the transfer of sovereignty there will be little stability in the zone or in Panama. When that is done, some of the ancillary problems can be settled. Reactions at home In the United States, there has been little organized effort devoted to present- ing the case for U.S. sovereignty. Polls indicate that some 80 percent of the people want the United States to retain the canal, but the results are far from specific. Ignorance about the canal, its past and its present and above all its strategic importance, is profound, and indifference is apparent. Into this partial vacuum Torrijos and his Communist supporters have moved. In .lanuary 1977, Panama's United Nations mission signed a contract with a New York firm — Public Affairs Analysts — to conduct a nationwide public relations dnve to influence the U.S. public to back a new treaty transferring sovereignty. Former politicos including former Democratic National Chairman Lawrence F. O'Brien and campaign aides of Senator Barry Goldwater and Senator Hubert Humphrey are connected with Pu])lic Affairs Analysts. The firm pl;ins to send protreaty information to a list of thousands of influential people. It will also monitor, it said, the activities of the score or more of organizations that have publicly opposed a new treaty, though it will not — ^a fine line, indeed — lobby or engage in propaganda. Perhaps even more influential than this campaign will be the activities of an organization called the Council of the Americas, comprising more than 200 major T^.S. corporations with investments in Latin America, and the quiet private influ- ence of some U.S. banks with outstanding loans in Panama. These organizations, which have considerable clout, operate undoubtedly from a sense of self-interest : the C'f)uncil of the American states that a new treaty would have a "very positive imi)act" in Latin America, and some of the banks are said to believe the only way Panama can pay interest on its loans is by achieving control of the canal and raising the transit rates. These organizations will undoubtedly be supported bv a sales campai.gn promoted by both the State Department and the White House if a treaty can be arranged that saves face for President Carter and ostensibly permits U.S. control without sovereignty. Thus, the lines are drawn for a pos- sible battle in the Senate which may shape, and will certainlv influence, the future of the United States. 313 It is conceivable that the senatorial battle might be preempted by events in Panama ; Torrijos's throne is propped up by bayonets and his position and the economy and social structure of Panama are unstable. But whatever the specific course of events in Panama, the argument that the transfer of sovereignty would promote stability, insure a friendly Panamanian government, and secure vital U.S. strategic interests seems groundless in the light of existing conditions. CONCLUSION In considering the vital issue of the future of the Panama Canal, two funda- mental questions should be asked. (1) Can the Republic of Panama operate, maintain, improve, and defend the canal without external aid and with equitable treatment for all shipping? The answer, to anyone who has studied canal problems, is clear. Panama could undoubtedly physically operate the canal, with the help of sizable numbers of the present American employees. This initial period of operation might cover several years, during which U.S. employees would be gradually replaced and out- side aid phased out. But Panama clearly does not have the economic or techni- cal capability to maintain — much less to improve and modernize — the canal with- out massive external financial and engineering aid. Unless it has complete au- thority (which means sovereignity) over such expenditures, the United States should not provide such aid. •'Internationalization ' of the canal, a term which has a beguiling ring, would be, in reality, a cover for some fonn of collectivized con- trol or consortium, with Communist and/or Third World influence probably pre- dominant. The canal, U.S. -owned and operated, is an asset to our strategic interests. But the canal, controlled and operated by a nation or nations actively or potentially hostile to our way of life, is a menace to our security. And, given the ideological instability of past Panamanian governments and the example of the Suez Canal, it seems highly unlikely that, with Panama nominally sovereign over the canal, the "big ditch" would be truly and perpetually neutral or its long- term operation eflicient. (2) Would transfer of sovereignty to Panama impair the U.S. strategic position in the Caribbean? Again, the answer is clear. U.S. control and U.S. influence in this vital back- door area — already impaired by the extension of Communist power and influence outward from Cuba and by our past defeats and retreats around the world — would be fatally weakened. We cannot insure control without sovereignty ; the mere phrase is doublespeak. We cannot provide military security for the canal without sovereignty ; to attempt it would be to accept responsibility without authority. [From the Congressional Record, Sept. 21, 1977 — S15314] The Panama Canal Treaty Mr. Thurmond. Mr. President, I have before me a news article written by John Cliamberlain for publication in The Florida Times-Union and published in the August 19, 1977, edition. Mr. Chamberlain's analysis of the terms of the Panama Canal treaties is informative and one with which I totally agree. The Panama Canal is vital to our national security and economic well-being. President Carter is attempting to persuade the American people to put both in jeopardy in order that Panama be appeased. In view of the importance of this issue to the U.S. Senate and the American people, I ask unanimous consent that this excellent analysis by Mr. Chamberlain be printed in the Record. There being no objection, the article was ordered to be printed in the Record, as follows : [From the Jacksonville (Fla.) Times-Union, Aug. 19, 1977] GUANTANAMO SURRENDER XexT (By John Chamberlain) The Carter Administration pulled a fast one when it divulged the major points of its proposed new Panama Canal Treaty during a Congressional recess. This meant it would be days before the opposition, including Democrats as well as Republicans, could form its lines for putting pressure on 17 more or less undecided Senators who are still needed to block the treaty, which must have 67 votes to pass. There must also be House of Representatives concurrence, a requisite for treaties that dispose of U.S. property. The treaty, as set forth by our negotiators, contains its superficially resassuring features. We do not propose to relinquish all control of the canal until the year 2000. By then the present Panamanian dictator, Omar Torrijos. will be over- thrown or dead. We can be sure the face of the world will be changed almost unrecognizably in 23 years. Brezhnev will be gone, Jimmy Carter (if the fates are kind to him) will be sitting on a porch in Plains, Ga., shelling peanuts. Ronald Reagan may still be riding a horse but be will no longer be a political force unless Geritol develops some unsuspected properties. By 2000 there may not be much Alaskan oil left to put in big tankers that can't get through the canal anyway. So why, since many of us won't even be around in 2000 A.D., isn't it the mark of expedient wisdom to leave the long-term future of the canal up to our chil- dren, along with the six trillion of debt obligations that we have already bequeathed to them? The reason why this is a stupid question is that Marxists of every stripe regard the figlit over the treaty as a test of will in a struggle that is not going to be postponed to 2000. The Panamanian Marxists have already made blackmail claims on us to com- pensate for artificially low canal fees. Our willingness to give up sovereignty over the su})lime engineering feat that our technology (and our tropical medical hygiene) made possible where the French canal builders had failed will not be lost on Fidel Castro, who will surely be raising the question of our Caribbean base in Gunntanamo. The Jamaican Prime Minister, Michael Manley, who has welcomed thousands of Cubans to his country to run such things as a "people's militia," will be putting in more phone calls to Hanava. The Washington-based Council for Inter-American Security, which has excellent correspondents, speaks of Jamaicans staring with awe at closed circuit television replays of Panamanian youth being trained in (314) 315 warfare, singing and shouting Marxist slogans. This is the sort of thing that dictator Torrijos look:s upon with complaisance, even if it is "unoflacial" insofar as his government is concerned. It makes it look as though we were quitting the canal out of fear. Some of the still officially undivulged terms of the Treaty which I saw circulating last week at an Inter-American Symposium at the University of Miami in Florida would seem to indicate that many of the attributes of Canal Zone sovereignty are scheduled to be relinquished to Panama long before 2000. U.S. citizens working for the Department of Defense or whatever authority will be operating the canal will be required to have Panamanian visas on ID cards. U.S. Customs employees will lose their jobs immediately. There could be a five-year rotation plan for canal employees recruited in the U.S. for "noncritical" jobs (pilots and marine engineers would, fortunately, be another matter). PX and Army commissary privileges would be discontinued after five years, with no compensatory cost-of-living subsidy from the U.S. government. In short, the treaty would make it unpleasant for U.S. citizens to take jobs in the Canal Zone. With U.S. police jobs being turned over to Panamanians, who knows how many Castroites would be telling Americans where to park their cars or when to put out their lights? We are told that the Canal Treaty must be accepted if Latin America as a whole is to be appeased. This is arrant nonsense. There is only worry in the West Coast Latin countries (Chile and Peru with their copper, Ecuador with its bananas) lest a Panamanian-owned canal, presumably "nationalized," should hike the canal tolls. When Brazil and the Argentine complain of Yankee "im- perialism" these days, they have Carter's selective statements on "human rights" in mind, not the U.S. engineers who kept watch on the Canal's Gaillard cut and Gatun dam. The Senate, if it is seeking to know the truth about Latin American opinion, should find some means of conducting honest polls all the way from Guatemala to Cape Horn. An honest poll might disclose a yearning for a "users' control" of the Canal after 2000. Everyone knows what happened to the Suez Canal when the "users" lost sovereignty there. [From the Cougressional Record, Sept. 22, 1977— S15399] The Panama Canal Mr. Ckanston. Mr. President, I urge all within and without the Senate to read the remarkable statement on Panama just made public by our esteemed ■colleague from South Carolina (Mr. Hollings). Senator Hollings was one of the numerous Senators who in the last Con- gress cosponsored the resolution that warned the State Department against negotiating a treaty with Panama. He was one of the numerous Senators who copsonsored the resolution in the last Congress who has refrained from cosponsoring the resolution in this Congress. And now, after reading, thinking, listening, asking, studying, and traveling to Panama to make a penetrating examination of all the factors at close hand. Senator Hollings has come out for ratification of the Panama Treaty. He set forth a careful, detailed and thoughtful dissertation of all the steps and stages he went through as he came to his decision, and the reasons and thought processes that led him to his conclusions, in his September newsletter to his constituents. I ask unanimous consent that Senator Hollings statement be printed in the Rec ord, and I urge that it be read with care equalling the care with which it was written. There being no objection, the statement was ordered to be printed in the Record, as follows : The Panama Canal Do you want to give the Panama Canal away? NO! I don't either. Nor does Prt^idcnt Carter. If President Carter's treaty is not giving it way, what is it doing? Keejting it to use! Given the pre.'^ent circumstances, the two new treaties are the only reliable and fair way for the United States to keep the Canal to use. We all start by agreeing that the Panama Canal is important to the United States, both from a commercial standpoint and from a strategic standpoint. We all start Ity agreeing that the Canal should be continuously open and continuou.sly in use. The debate centers on how best to keep it open and operating, so that our commerce can flow and our Naval fleets can remain mobile. After looking at this question from every angle, listening to both sides over the years, and visiting Panama for another first-hand look, I join all our recent Presidents, tlie Joint Chiefs of Staff, and a bipartisan group of political leaders in supporting Senate ratification of the treaties. They are the best safeguards for an r)pen Canal, and they guarantee America's continued access and continued freedom of transit permanently. Tf tliis treaty prevented our ability to use or defend the Canal, it would he different. But it does no such thing. On the contrary, the United States con- tinues to oi)erate and defend the Canal until the year 2000. After 2000. we re- tain the right to intervene to guarantee the Canal's accessibility to U.S. shipping. Let's ]»e practical. The Canal is like an aii*plane — it is no good \mless it can l)e used. We can go out and squat in the airplane, but unless we can fly it, the i)lane is of no use. So title to the Canal is not the issue. The problem is the unimpeded right to use it. Does the treaty give the TInited States the per- mjineiit, unimpeded right to use the Canal? Are we guaranteed freedom of tniii^it <'V('n after 2000? A few days ago in Pannmn when President Demefrio Lnkns wns nsked tliose qnestions. lie nnswered "Yes" to both. Returning home and cbcrking. Article IV of the treaty provides it. and Dictator Torrijos states in Wasliington. "we are agreeing to a treaty of neutrality which places us under the i)rotective umbrella of the Pentagon." Why. then, all the hubbub? Two main reasons. First, we have not yet fully learned the lesson of Vietnam. A decade tliere should liave convinced us that (316) 317 people do not like foreigners in tlieir country. Tlie Vietnamese did not like it. The l*anamanians do not like it. But failing to recognize this, the treaty opi)o- nents see no problem. They think the whole thing is a scheme of the State De- partment, and all we need to do is prove title or sovereignty and the treaty will be defeated. Secondly, we feel frustrated. The cry is, ''We lost in Vietnam ; we lost in Angola ; we are pulling out of Korea ; we talk about abandoning Taiwan. We have given away too much and 'detented' too much, and just once we should stand up and say — 'NO !' " This was exactly my reaction ten years ago when former Secretary of the Navy Robert Anderson came before our Com- merce Committee to testify on a proposed new treaty for the Canal. "We bought the Zone, we built the Canal, we paid for it all. Why should we want a new treaty?" Secretary Anderson said quietly, "We made a bad treaty. The people of Panama have never accepted it and now they are ready to lay down their lives for their country." "Baloney" was the reaction. America's sovereignty must l)e protected at all costs. In 1967 in Vietnam, it was becoming difficult to ex- l>lain to next-of-kin how their sons were being sacrificed for U.S. sovereignty. But in Panama — it could be explained easily. This feeling permeated a glowing newsletter about U.S. "sovereignty" five years ago. But the legal opinions to support sovereignty were not forthcoming. President Lyndon Johnson had conferred with former Presidents Eisenhower and Truman and the three Presidents agreed we needed a new treaty. When President Nixon and President Ford also endorsed the idea, everyone began to wonder. Nixon had ignored the State Department and Ford would like to have ignored State if his conscience would allow him. Ronald Reagan was giving him a fit and it would have been a lot easier for Ford if he could just stand up and say "No" on the Panama Canal. My conscience hurt — and in another newsletter last year, it was pointed out that we did not have sovereignty, and the need was emphasized to rid ourselves of the vestiges of the "Ugly American" in the Canal Zone by relinquishing separate courts, the commissaries, special stores, etc. But, the newsletter com^luded, the United States should make sure ". . . that we will be in charge of the Canal both five years and 50 years from now." Previously, I had joined in the Panama Canal resolution putting Plenry Kissinger on notice. We never knew what he was up to and it was thought healthy to let him know that some of us in the Senate were watching. In Janu- ary of this year, with Henry gone, there was no need to co-sponsor the resolu- tion. Today I am better informed — reading "The Path Between the Seas" by David McCulIough — a 698 page historical account of how we created the Republic of Panama after Colombia, the sovereign, refused to ratifiy our treaty. Talking and listening at length to Ambassador Bunker and Ambassador Linow^tz, who was President Johnson's Ambassador to the Organization of American States — hear- ing the joint Chiefs of Staff, including General Brown, the Chairman, and (General Jones, head of the Air Force — talking more recently with Army Sec- reary Alexander after his return from a trip to the Canal Zone — traveling to Colombia, Argentina, Peru and the Canal Zone, meeting with their Presi- dents — talking in Brazil to the Foreign Minister and the President of tlie Brazilian Senate and with many other oflicals — talking with the Economic Min- ister and Secretary of Commerce in the Republic of Panama — meeting with a group of Zonians, people living in the Canal Zone — lunching with American busi- ness leaders who had lived from two to twelve years in Panama City — outside the Zone — traveling with the U.S. Governor of Panama over the entire Canal — being briefed all along by Lt. General Dennis P. McAuliffe, the U.S. Commander of the Canal Zone — spending an evening with the U.S. Ambassador to Panama Jorden, meeting with a former prisoner of the Bay of Pigs in Cuba. With the exception of some of the Zonians, they agree to a man that the Senate should ratify the treaty. Even the Zonians emphasize that the treaty ought to be "modernized." There must be a good reason for all of these leaders plus six American Pres- idents to favor a new treaty. The good reason, of course, is an appreciation of the true character of America. Some think our strength lies in our military might alone. But America's power lies in its solid stand on the principle of self-determination. Having lost 56,000 for this principle in Vietnam, it is ap- l)alling that some would suggest we now lose? Americans to deny the principle in Panama. Much is proclaimed about building the Canal — ^but so little said about build- ing the Republic of Panama. If ever a country should be stamped, "Made in 318 the USA," Panama is the country. We created it 70 years ago — and today it is a stronghold of American free enterprise. Seventy major U.S. banks operate in Panama City — those which refuse to operate in Communist countries. Recently, when Panama needed increased revenues, she took the Chamber of Commerce approach — a value-added tax rather than an increase in income tax. Dictator Torrijos' economic team are all U.S. trained and educated. President Lakas — six years in the United States, a graduate of Texas Tech. Planning Minister Nicholas Barletta, a classmate of Governor Hunt of North Carolina — both graduates of N.C. State. The Guardia Nacional, or army — U.S. trained. Like many other heads of state in Latin America, Torrijos has visited with Castro. But Panama does not recognize the Soviet Union and Panama refuses to recog- nize Red China — she recognizes Taiwan instead. In a population of 1.700,000 — there are reportedly 600 Communists — but none in the government. Tlie govern- ment is patterned after the United States with three branches — legislative, executive and judicial. And they have an American system of education. Now the important point of all this is that we have taught them one American trait — patriotism. The Republic of Panama has developed a nationalism of its own. The people are proud, they are patriotic. They have learned the cardinal prin- ciple of government — the right of the people to determine their own destiny. The ten-mile strip of foreign occupation in the heart of their country is viewed the same way as if the French had retained a five-mile zone on either side of the Mississippi. Every Panamanian schoolchild is taught the wrong that the United States did in obtaining the treaty in 1903. Everyone in the city and countryside of Panama feels it and as they showed in 19C4. they are willing to die for it. But most importantly, in this section of the world where the Ignited States lacks strong friends, the Panamanians are friends of the United Stares. Everything they feel or know comes from the United States. Pointing out to President Lakas the feeling that existed in the United States, that the people were tired of being pushed around, that somewhere, sometime we had to stand up and say "No" — the President responded quietly, "But why do it to a friend." Let me touch briefly on the certain aspects of the Panama Canal controversy : 1. SOVEREIGNTY 1. Legally, we don't have sovereignty ; 2. Morally, we don't have sovereignty : 3. Realistically, we don't need, we don't want sovereignty. Legally — Article III of the 1903 treaty grants to the United States certain rights as . . if it were the sovereign of the territory," This retained sovereignty in Panama. President Roosevelt's Secretary of War William Howard Taft, later to become President, said in a 1905 report : "The truth is that while we have all the attributes of sovereignty, the very form in which the attributes are conferred in the treaty seems to preserve the titular sovereignty over the Canal Zone in the Republic of Panama." The Supreme Court decisions cited by treaty opponents are like the 1896 Plessy v. Ferguson segregation decision — totally untenable in this day and age. The real test is how the Government of the United States or Con- gress treats the Canal Zone — and it has not been as sovereign. If the Panamanian couple gives birth to a child in South Carolina or Louisiana or Alaska, under the Constitution that child is a U.S. citizen. If the same couple gives birth to a child in Guam or the Virgin Islands, then the child becomes a citizen, because Congress has treated these two areas as under our sovereignty. But if the same Pana- manian couple gives birth to a child in the U.S. Canal Zone, that child does not become a citizen. So while the treaty said we could act as if sovereign, we were not and we did not. Morally — No question, the United States rooked Panama back in 1903. We actively supported the revolution against Colombia by its Isthmus section after Colombia refuscfl to ratify the treaty we wanted. We sent ships and troops and this guaranteed the outcome. Tlien we signed the treaty hurriedly before the official delegation objecting from Panama could even arrive in Washington. Sign- ing for Panama was — not a Panamanian — but a French citizen who had not been in Panama for 17 years, and who returned to France immediately after the ratification. Further, it was made known that our military might would be with- drawn from the fledgling revolution in Panama unless ratification was promptly forthcoming. Such withdrawal would have left Panama at the mercy of a far stronger Colombia. This congeals hundreds of items, but it is interesting to note that the majority of the U.S. payment was retained by a New York bank and 319 invested in real estate in the City of New York. At the time, Teddy Roosevelt's Secretary of State commented. "You and I know too well how many points there are in this treaty to which a Panamanian patriot could object." Said Woodrow Wilson, who would soon be President, "Our acquisition of the Panama Canal Zone has been a scandal since the day of the fake "revolution" of November 3, 1903. ... In every country to the south of us we are distrusted, feared, hated." Today this diplomacy is characterized by conservative columnist James Kil- patrick as a "national shame." Don't want sovereignty — After spending our history destroying colonialism from the beginning in 1776 thru to the Philippines, Cuba, World War II, Korea and Vietnam, let's not insist on colonialism in Panama. If there is one thing that President Carter and the United States have going for us in the world today, it is our stand on human rights — the right of people to determine their own destiny. We finally are getting the Soviets and others on the defensive about their denial of human rights, and things are beginning to move our way. Are we now going to say, "Yes, human rights for everyone — except the people of Panama. 2. DEFENSE Flying up and down the length of the Canal in a helicopter, Lt. General Mc- Auliffe was pointing out the strategic points to be defended — the lakes, the power facilities, the bridge and most important, the dam at Gatun Lake filling from the Charges River. This lake is 25 miles across, the largest man-made lake in the world. The locks are filled by gravity flow taking 52 million gallons of water for each ship that goes through. If the dam was blown at any point emptying the lake, it would take two years to refill. "It would take 80,000 to 100,000 men to de- fend key points," said General McAuliffe. "This does not mean wall-to-wall cover- age of the entire length, only the key places. And this would not include the hundreds of inspectors necessary to examine each ship going through — an almost impossible task." Guantanamo Bay in Cuba is a tip of land — easily defended. But the Panama Canal is open to ships from Cuba, Russia — all nations — and a lunch box of explosives could put it out of commission. 3. COMPETEXCF Can the Panamanians learn to operate the Canal efficiently? Presently there are 12.000 Panamanians helping to operate the Canal efficiently. Can they take over the jobs of pilots, engineers, etc? Yes. This could be done in short order. The Pan-American Airlines manager in Panama City, having operated in seven- teen countries, said the best management and operating team of the seventeen was right now in Panama. Another friend, the Latin American manager of Inter- comsa handling 85% of the communications from Latin America, came two years ago with an operating team of twenty-two U.S. experts. Already, he has sent back air but three to the United States — the Panamanians are doing the job. Let's remember the Egyptians readily learned to operate the Suez Canal. 4. TOOLS AND PAYMENTS Can the Canal operate without further appropriations from the Congress? This year the Canal will operate at a $7 million profit. But for the past several years, the Canal has been subsidized by the American taxpayer. The first ship with Alaskan oil went through the Canal on August 30. This increase in traffic will per- mit the Canal Company to pay the added 30(^ per ton plus the $10 million required annually under the treaty. Tolls will have to be increased from $1.29 a ton to ap- proximately $1.70. But if a pipeline connection for Alaskan oil is made from the West to the East Coast, then further increases in tolls could be counterproduc- tive. This plus the loan guarantees may require us to subsidize again. Treaty opponents cry, "Ifs bad enough to give it back, but ichy do we have to pay them to take it?" Spain : $685 million for base rights for five years. Greece : $700 million for base rights for four years. Turkey Demanding $1 Billion for base rights for four years. Philippines Demanding $1 billion for base rights for five years. We have had a free ride in Panama for 74 years. Now Panama, like other allies, wants compensation for the military installations in her country — Fort Kobbe, Fort Amador, Howard Air Force Base, Fort Clayton, Albrook Air Station, Fort 320 Davis, Fort Gullick, Fort Sherman, the Jungle Warfare Range, etc. We are not paying to take the Canal back — we're paying for these installations. And most of the payments will be coming from toll revenues. 5. NEW CANAL A new sea-level canal will probably be built by Panama and the United States before the year 2000. An estimate in 1970 reported the cost at $2.7 billion. With inflation today that cost would be $5.7 billion. With hindsight now we realize that rather than working for thirteen years to renegotiate the old treaty, we should have insisted on a new sea-level canal. This would have been wide enough for all cur wai'ships as well as the largest oil tankers. Then the sovereignty, sabotage and other problems would have been moot. What is unexplainable is the provision that forbids us to negotiate a new canal anywhere but Panama. 6. IMPORTANCE OF THE CANAL The Panama Canal is important to the commerce and defense of the United States. It is especially important to South American countries such as Columbia, Peru, Chile, Ecuador and Nicaragua. Colombia, for example, drills its oil on the Pacific side and refines it on the Atlantic side. The Canal is Colombia's lifeline. Over % of Nicaragua's trade passes through the Canal. The list goes on. I re- cently heard the statement that all Latin American nations wanted Panama to control the Canal. False. They feel that Panama should have sovereignty over its own territory, but time and again different leaders in South America told me that the United States is the only power in the Western Hemisphere strong enough to protect the Canal. They are worried about toll increases. They are worried about freedom of transit for their countries. They feel that the neutrality treaty is ideal in that Panama regains sovereignty and they all have freedom of transit — with a U.S. guarantee. Finally, they are worried about communism. More so than are treaty opponents, because attempts have been made on these leaders' lives. They all oppose any communist takeover of the Canal. 7. COMMUNISTS IN THE CANAL Treaty opponents feel that once the treaty is ratified then in a couple of years the Canal will be turned over to the communists. No one knows or can guarantee what will happen in the years to come. All studied opinion holds firm that com- munism will have no issue upon which to take root if the treaty is ratified. How- ever, they all feel that if the Senate turns the treaty down, then the communists will have a controlling issue not only in Panama but all over South America. Right now the communists in Panama are in the streets agitating against this treaty which they know will deprive them of their big issue. The best way to keep it from the communists in the future is to validate the neutrality treaty. And the best way to keep it from the communists today is to ratify the new treaty. 8. TORRIJOS No question about it — he is a dictator. But not "tin horn" like opponents con- tend. Every head of state emphasized this fact — Torrijos is a man supi>orted by his people. Previously, rulers of Panama were from the city, educated in Europe. But as President Lopez-Michelsen of Colombia said, "Torrijos is not a patrician. He is first and foremost a man of his people." Torrijos is from the countryside. He was educated in Panama and trained at Fort Sherman and the U.S. Army School of the Americas. He came to power after the uprising in 1964. At the time he was a major in the National Guard — and had the bitter task of subduing hi» ^>wn people. After the riots, he took over pledging to rid the Canal Zone of foreigners. When asked if the Senate's failure to ratify the treaty would weaken or strengthen Torrijo«, all national leaders in South America plus the American business leadership in Panama City said it would strengthen him. Several im- mediately replied : "It would make him a hero." What happens if the Senate ratifies the treaty — There is no guarantee that this would solve all of our problems in Panama or in Latin America. Brazil particu- larly has a chip on her shoulder. They favor the treaty but the Brazilians want the Uniteected to pass on its own recommendations to the full Senate for final consideration and judgment. SEEK OUT IXFORMATIOX All of us have a responsibility to become as well-educated as possible on all aspects of the Panama Canal issue. Xow that the treaty drafts are available for in.spection, we should actively seek additional information and advice from a variety of sources. A well-informed public can provide guidance during our de- liberations, as well as support for our decision once it is made. Because I believe the American people deserve the opportunity to hear the full range of arguments for themselves, I have already suggested to the majority leader that Senate de- bate on the Panama Canal treaties be televised. Television coverage would place the treaty issues before a far greater number of our citizens, and enable them to better understand and participate in the decisionmaking process. At all times during the weeks ahead, we. in the Senate. miLst attentive to any new developments which may bear upon the treaty issue. I am thinking at tliis moment of reports last week that surveillance activity may have taken place during the treaty negotiations. The Senate Intelligence Committee, after conduct- ing hearings on the matter, concluded that our treaty negotiators had not been compromised in any way l)y the disclosures. But I raise tliis matter to make a point : No matter what our predisposition toward the treaties may be, all of us sbould remain receptive to updated information on the treaty matter as it be- comes available. During the past several weeks, I have made an active effort to familiarize my- self with all points of view on the matter. I have discussed the treaties with President Carter, former President Ford, and Governor Reagan, and I received a (322) 323 detailed briefing on both treaties by the State Department. I have deliberated upon the provisions of both treaties and consulted with respected members of the academic and professional community. Having now had the opportunity to carefully consider the background, the context, and the details of the treaty proposals, I have arrived at certain conclusions. In order to express my obser- vations and concerns about the treaties, I will today introduce several proposals for their modification. TREATIES UXACCEPTABLE I cannot support the two Panama Treaties in their present form. Both the basic treaty, and the treaty concerning permanent neutrality contain omissions and defects which make them unacceptable, in my opinion. In order to focus attention upon these weaknesses, particularly for the benefit of forthcoming Senate hearings, I am proposing two reservations and six amendments to the treaty language at this time. The U.S. Constitution gives this body the power of "advice and consent" over international treaties concluded by the President with foreign heads of govern- ment. As such, we have the constitutional obligation to scrutinize these treaties for their impact on our national interest, and to identify the defects or omissions. On 16 occasions in our Nation's history, the U.S. Senate has directly rejected treaty proposals submitted by the President. In 38 other instances, the Senate has attached reservations or amendments which ultimately led to the demise of proposed treaties. The modifications I propose would, in my opinion, better protect the Nation's vital interests and substantially improve upon these documents. Hopefully, the Senate Foreign Relations Committee will solicit testimony on each of these points, and the full Senate will later have an opportunity to consider them. NO RESTKICTIONS OX LOCATION OF NEW CANAL My first amendment will insure that the United States is not committed in advance to refrain from constructing a new sea-level canal, at some point in the future, in a country orher than Panama, article XII of the basic Panama Canal Treaty would, in fact, bind the United States to construct such a canal in Pan- ama if it should be determined that a modernized canal is desirable in Central America. Yet, there is no commitment on the part of Panama to agree to permit construction of the canal ; we are only prevented from constructing one elsewhere. I do not suggest that we rush right down and build a new canal in Central America. That project may or may not be vital to U.S. defense and economic interests at some point in the distant future. Tlie President has been talking a good deal lately about a new sea-level canal, but I suspect that the vast major- ity of American people will want to know first why we are giving up one canal in order to build another, which I understand may cost as much as $7 billion. This very logical question acquires all the more significance when we talk about building a new canal in the same country that is now demanding possession of the old one. Whether or not Panama is the best location for construction of a sea-level ca- nal is really not the immediate issue. The central question is whether the United States should bind itself, by this treaty, to foreclose all options with respect to a new canal. We have no idea at this point how cooperative the Panamanian Gov- ernment will be in observing the provisions of the present treaty. We have no idea what the nature of a future Panamanian Government may be. Because this is a question that could bear directly on American defense and economic interests, it is vital that it be given careful attention. My amendment will strike that section of article XII which would foreclose our options, and substitute in its place a clause specifically rejecting any restrictions on U.S. nego- tiations with other countries for the right to construct a new canal somewhere in the Western Hemisphere. In my opinion, it is absolutely necessary that this freedom of choice is maintained. REDUCE PAYMENTS Probably no other aspect of these treaties causes as much concern among so many Americans as the payment provisions outlined in article XIII of the basic treaty. This "pay-away" plan is an enigma — are we providing rent, ransom, or "conscience" money? 324 The Unitecl States currently pays the Panamanian Government an annuity of S2.3 million. Article XIII would raise those payments to between $70 and $80 million per year — a windfall by any standard, particularly when we consider the value of real estate and equipment that will be transferred without charge to the Panamanian Government under the treaty terms. In addition, our Gov- ernment agrees to negotiate an economic loan package amounting to as much as $84."i million. According to calculations by Panama's own economic policy minister, the total amount of anticipated U.S. financial aid may reach as high as $2.26 billion over the next 23 years, amounting yearly to more than 20 percent of Panama's annual national budget. CUT PAYMENT IX HALF The amendment I am proposing would reduce the payments provided in article XIII by more than one-half. First, it would reduce Panama's share of the canal's annual operating revenues from 30 cents per net ton to 15 cents per net ton for each vessel transiting the canal. Second, it will eliminate altogether the biennial adjustment of this rate according to changes in the U.S. wholesale price index, which, frankly, I have never totally understood why that was a pro- vision in any event, but it is mandated in the treaty. Finally, my amendment will strike that provision supplying Panama with "up to" $10 million per year depending upon revenues. Although this provision is billed as contingent upon the profitability of the canal in any given year, it in fact guarantees payment of the full annuity "from operating surpluses in future years'' whenever annual revenues are insuflScient. With implementation of this amendment, the Panamanians are still provided a fixed annual annuity of $10 million, plus an equitable share of canal revenues, l)lus eventual receipt of U.S. loans and zonal property. No one can seriously dis- pute the generosity of this arrangement. Yet, it is far more rational and equitable in terms of compensation for our continuing primary role in using and operat- ing the canal until the year 2000. NO PAYMENT IF CANAL IS CLOSED In addition, my amendment provides that the fixed annual annuity shall cease during any period in which the canal is inoperable. It would be unfair and irre- sponsible to continue that payment during a time in which the canal is closed, whetlier due to natural catastrophe, functional breakdown, or international sabotage. We almost certainly would be expected to bear the major economic burden of reopening the canal in any such instance, and it simply does not make sense for us to continue paying Panama for a passage route that is tem- porarily nonexistent. The present treaty makes no provision for such a contin- gency, and the United States must be protected on this point. EXTENSION OF TKANSITION PERIOD FOR JURISDICTIONAL ARRANGEMENTS In accordance with the intent of article XI of the basic Panama Canal Treaty, to provide for an "orderly transition" of jurisdiction over the Canal Zone, my amendment would extend the period for transfer of certain jurisdic- tional arrangements. This treaty is being marketed by the administration as a "23-year" transition document, with the superficial implication the United States will maintain principal control over the Canal Zone and canal until the year 2000. In fact, a careful reading of the treaty provisions suggests that this concept is largely fictional. In effect, this is not a 23-year transition treaty: It is a 30-month transfer of title. Article XI provides that tlie Republic of Panama shall regain full jurisdic- tion over the Canal Zone as soon as the treaty enters into force, and a complete transfer of U.S. judicial, administrative, and regulatory authority will be accom- plished witliin 30 months. After that, U.S. citizens will be subject to Pana- manian law. and subject to Panamanian civil and criminal justice as well. I believe that a transfer of this magnitude in such a short period of time will not constitute "orderly transition." In effect, the provision will tend to drive Americans out of Panama. We may see a mass exodus of U.S. engineers and other canal personnel within the next 2Y> years. In order to provide for a more gradual phaseout of U.S. authority over Ameri- cans employed in the area, my amendment would permit the Panama Canal 325 consultative committee to study the issue after the treaty takes effect and, with tlie benefit of actual experience, make a recommendation as to when the IH^riod of transition should formally end. However, in no case will this be prior lo January 1, 1990. This date coincides with transfer of the administration of the Panama Canal Commission from United States to Panamanian leadership. It is only logical that primary U.S. authority over both the canal and the Canal Zone should expire at approximately the same time. By the same token, we will allow for a more orderly and gradual phase-out of American employees in the area, and of judicial and administrative control over them. The amendment would not alter the theoretical return of "sovereignty" over the Canal Zone to Panama on the date the treaty comes into force. However, it would provide for the more practical arrangement of gradually phasing out U.S. jurisdic- tion over its own citizens in the former Canal Zone area. HUMAN RIGHTS For an administration which has made the subject of human rights a basic element of its foreign policy, particularly toward Latin America, the White House has been remarkably silent on the issue with respect to the Panama Canal negotiations. Yet, I believe this is an issue that should not be ignored. In the interest of moral principle, as well as consistent policy, it is important that we address the subject of human rights observance within Panama for both Pana- manian and United States citizens. There are several very important reasons why we have the obligation as a nation to pursue this point. First, U.S. employees will remain for a time in what was formerly the Panama Canal Zone. Under the terms of the treaty proposed by this administration, American citizens will become subject to both civil and criminal jurisdiction of the Panamanian Government at the end of a 30-month transition period. We have a responsibility to see that their basic rights are at all times strictly observed and fully protected. Second, we are effectively expand- ing the territory under the direct control of Gen. Omar Torrijos and his regime. In ratifying this treaty, we are strengthening the political and economic power of the Torrijos government. As such, I think we have both a responsibility and a right to insist upon a better observance of the basic human rights of Pana- manian citizens, as a condition of this treaty. The Carter administration has not hesitated to exercise this condition with regard to aid proposals for Brazil. Argentina, Uruguay, and other Latin American nations to the point of straining diplomatic relations. The Acting President pro tempore. The Senator's 15 minutes have expired. Mr. Dole. May I have 2 additional minutes? Mr. Robert C. Byrd. Mr. President, who is the next Senator to be recognized under the special order? The Acting President pro tempore. The Senator from Rhode Island (Mr. Chaffee). Mr. Chaffee. Mr. President, the Senator from Kansas is certainly entitled to have 2 minutes of my time. The Acting President pro tempore. The Senator may proceed for 2 minutes. Mr. Dole. I thank the Senator from Rhode Island. Interestingly enough, the State Department itself has refused to give the Panamanian regime a clean bill of health with regard to the observance of human rights. In a report prepared by the Department and submitted to the Senate Subcommittee on Foreign Assistance in March of this year, the State Department shed light on the repressive conditions in the country. The report notes that "Political opposition is not tolerated. The media are monitored by the Government." We are told Panamanians "generally" are assured of judicial re- dress where criminal charges are concerned, but "the guarantee of a fair trial might not be observed in a case with important political considerations." A human rights survey conducted by "Freedom House" in New York is con- sistent with these observations. On a scale of 1 to 7, with 7 representing the lowest level of observance, the Government of Panama ranks 7 in extent of political rights, and 6 in extent of civil rights. In its comparative survey of freedom issued in January of this year, Freedom House characterizes the nation of Panama as "not free" and indicates the outlook for a change in these repres- sive conditions is unlikely. Why, then, have we ignored the human rights issue altogether while confront- ing the persistent demands of General Torrijos? The Latin American corre- spondent for the Chicago Daily News recently reported that the response she 326 received to this question by a high ranking State Department oflScial was — "Of course, we are not going to challenge human rights in Panama because we want the treaty." I am concerned about these authoritative reports of political repression within Panama, as I know many of my colleagues are. I am concerned as well about additional allegations of torture, murder, and severe punis^hment communicated by concerned groups of Panamanians. My amendment would insist upon Pana- manian protection for the human rights of all those living and working in the former Canal Zone. My reservation would condition treaty ratification on the understanding that the Panamanian Government will make "significant progress" toward observing the human rights of all its citizens during the basic treaty period. Both modifi- cations will als^o encourage onsite investigations of alleged repression by re- spected international organizations. TRANSFER OF CAXAL ZOXE PROPERTY My second reservation would reaffirm the constitutional responsibility of the House of Representatives to participate in transfer of ownership of the Canal Zone territory. Article IV, section 3. paragraph 2 of the U.S. Constitution reads : •'The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States ; and nothing in this Constitution shall be so construed as to prejudice any claims of the United States, or any particular State." U.S. title to the Canal Zone property has been atfirmed on several occasions by the highest courts in our land. In 1907, the Supreme Court, by unanimous decision, confirmed our clear title to the Canal Zone property : "It is hypercritical to contend that the title of the United States is imperfect, and that the territory described does not belong to this Nation because of the omission of some of the technical terms used in ordinary conveyances of real estate. (Wilson v. Shaw 204 U.S. 24). That unanimous Supreme Court decision aflSrming U.S. sovereignty over the Panama Canal Zone still stands as a law of our land, and was reaffirmed by the U.S. Court of Appeals decision in 1971 United States v. Hushand R. Roach, 453 F. 2d 1054, 1057, where the court said : "The Canal Zone is an unincorporated territory of the United States." Both of these cases clearly reaffirm the fact that the Canal Zone is "territory" of the United Statei=;. Consequently, not only two-thirds of the U.S. Senate but a majority of the U.S. House of Representatives must approve the proposed treaties as well. As a footnote to the issue of whether or not the United States can clearly claim title to tiie Canal Zone territory, it should be pointed out that our Govern- ment actually made payment to individual property owners at the time the original treaty was promulgated. Besides the initial payment of $10 million to the Panamanian Government, the United States paid approximately $4 million for acquisition of property from ownerships that existed in the Canal Zone area. We paid over $300,000 to the French for land rights they already possessed in that region. So I think there is little question that we currently have clear title to this territory. As such, both Houf^es of Congress must participate in its transfer, and ray second reservation will make this a precondition to enforcement of this treaty. TJXILATERAL U.S. Mn.TTARY INTERVENTION I propose to amend article IV of the treaty concerning the permanent neu trality and operation of the Panama Canal, by adding a provision specifically guaranteeing our authority to intervene militarily on behalf of the canal wiien- ever we determine its neutrality to be threatened. In my opinion, this amendment is absolutely necessary to the protection of our national security interests. We cannot count on Panamanian concurrence in every instance where we may perceive the operation of the canal to ])e in jeopardy. For all we know, the Panamanian Government itself may be consciously or unconsciously a part of that threat at some point. The administration has sought to reassure the American people that this treaty, by implication, assures that the United States can unilaterally intervene in the defense of the canal whenever necessary. I see nothing in article IV or in any other section of the treaty which specifically guarantees that prerogative. 327 In fact, in a Panamanian radio broadcast on August 24, Panamanian negotiator Escobar Betbancourt maintained just tlie opposite : 'Tbe pact does not establisb that the United States has the right to intervene in Panama. This word has discussed and eliminated, and wliat is stated is that Panama and the United States will maintain the neutrality of the canal. What is the meaning of "will maintain?" In practice, the meaning of "will maintain" is that, if neutrality is ever violated, Panama on one hand and the United States on the other, or the two countries jointly, will determine how they will guard the canal against such a violation * * * the neutrality pact does not provide that the United States will say when neutrality is violated." If this is, in fact, what the article says — and I would say that Panamanian in- terpretation is at least 50 percent of the definition — then this is an unacceptable accord and should be either modified or rejected by the U.S. Senate. Regardless of how the State Department may choose to interpret this or that clause in the treaty, the point is that U.S. authority to intervene should be made crystal clear to the Panamanians within the treaty itself. My amendment would provide the necessary modification. GUARANTEE U.S. WARSHIPS PRIORITY PASSAGE This amendment relates to article VI of the treaty concerning the permanent neutrality and operation of the Panama Canal. The article guarantees that United States and Panamanian vessels of war will be entitled to transit the Panama Canal "expeditiously" at all times. At face value, this is a reassuring provision given the importance of the canal to our national security interests. We can assume that the term was included because our negotiators recognized the vital security implications of the canal and felt it important to imply a special right of passage. Now, some proponents of the Panama Canal treaty have tried to convince us that the canal is no longer vital to our national security interests. I do not agree with that point of view, and we have certainly seen some persuasive comments from those most knowledgeable about our naval operations that support the canal's continuing importance. It just seems to me that, by including the term "expeditious passage," the treaty drafters admit to an immediate defense interest by our Government. But, it is imperative to get a precise interpretation for that term. To be more specific. I have to wonder why the treaty negotiators did not use term "priority" or "privileged" passage for United States and Panamanian w^ar- ships, if that is in fact what the concept is supposed to be. My skepticism on this point was heightened recently when I became aware of a Panamanian radio broadcast on August 24, in which the Panamanian Minister of Information and chief negotiator, Escobar Bethancourt, gave the Panamanian Government's Interpretation of the term. Senor Escobar explained that : "Expeditious passage does not mean privileged passage. As a matter of fact, the concept of privileged passage was rejected * * * jf after examining the pro- vision the gringos with their warships say, "I want to go through first," then that is their problem with the other ships waiting there. We cannot go that far." It is readily apparent, then, that the Panamanians do not understand expe- ditious passage to mean that U.S. warships would receive priority, even during a period of crisis. In effect, the Panamanians intend to interpret the concept in this way : If there is a line of ships waiting to pass through the canal, the U.S. warships must get in line with the others and wait their turn. I do not be- lieve that America's security can, or should, depend on trafllc circumstances on any given day. Our naval defense could be thwarted by a bottleneck. My amendment would specifically amend article VI to stipulate that, during a period of crisis, American vessels of war and their auxiliary vessels w-ill be en- titled to privileged passage through the canal. I believe this is an equitable ar- rangement, and certainly the only one that our country can accept in con- sideration of national defense, Latin American defense, and defense of the free world. POINTS OF CONCERN The foregoing represents some of my principal concerns about these treaties. Specialists on the subject have identified these aspects as among the greatest weaknesses in the treaty proposals, although there are a number of other de- 99-592 — 78 22 328 ficiencies that can and should be addressed. The forthcoming Senate committee liearings are intended to shed some light on all of these problems. There is no question in my mind but what a number of modifications will eventually be pro- posed by various members of the Senate, and I may offer additional amendments or reservations myself after further analysis of the treaties has been conducted. Furthermore, the specific concerns expressed by our constituents should be fully represented at every stage of deliberation on the treaties. NO APOLOGIES In closing, I want to say that the people of the United States owe Panama no apologies for our involvement with the canal. The generosity of our Govern- ment in building tlie canal, in operating and maintaining it for 65 years, and in thereby enhancing the standard of living for Panamanians, requires no remorse on our part. Free of any implications of guilt, we should proceed to analyze these treaties in an objective and responsible manner. But the Panamanian Government officials must know that we will never re- linguish our presence in the Canal Zone because of veiled threats or direct pres- sures. They must know that we reserve all rights to intervene when the security of the canal is threatened, and that we expect priority passage for our ships dur- ing periods of crisis. And they must be told that we expect to see substantial progress in the area of human rights in which they rate so poorly. Above all, we do not intend to pay exorbitant amounts of money for the purpose of turning over control of the canal and Canal Zone. My amendments and reservation will ef- fectively communicate these messages, at the same time that we consider the basic merits of the treaties themselves. We should settle for nothing less. Mr. President, I ask unanimous consent that the texts of my amendments and reservations be printed in the Record at the conclusion of my remarks. The Acting President pro tempore. Without objection, it is so ordered. (See exhibit 1.) Mr. Dole. As I say, Mr. President, we have no apologies to make. The United States does not owe Panama or anyone else any apologies for our involvement with the canal. We have been generous ; we have operated and maintained the canal for 65 years ; and we have enhanced the standard of living of the Pana- manians. Certainly there are areas of agreement and disagreement, and it may be modifi- cations should be made. I just suggest that the amendments and reservations offered by the Senator from Kansas be carefully considered. As indicated, there will be others, but I hope I have responsibly addressed some of the major defects in the treaty submitted to Congress. I yield back the remainder of my time. Exhibit 1 Amendment No. 1. (Exec.) 95-1 Paragraph 2(b) of article XII is amended to read as follows : (b) During the duration of this Treaty, the United States of America may negotiate with any third State for the right to construct an interoceanic canal through such third State on any other route in the Western Hemisphere. Amendment No. 2 (Exec.) 95-1 In article XIII, paragraph 4, strike out subparagraphs (a), (b), and (c), and insert in lieu thereof the following : (a) An annual amount to be paid out of Canal operating revenues computed at a rate of fifteen hundredths of a United States dollar ($0.15) per Panama Canal net ton, or its equivalency, for each vessel transiting the Canal, after the entry into force of this Treaty, for which tolls are charged. (b) An annuity of ten million United States dollars ($10,000,000) to be paid out of Canal operating revenues and as an expense of the Panama Canal Com- mission, except that such sum shall be reduced by the proportion which the num- ber of days during the calendar year the Canal is not navigable bears to the calendar year. 329 Amendment No. 3 (Exec.) 95-1 III the second sentence of the first paragraph of article XI, strike out "for thirty calendar months" and insert in lieu thereof "until such date as is agreed upon by the members of the Panama Canal Consultative Committee, but not before January 1, 1990." In paragraph 2 of article XI, amend subparagraph (a) to read as follows: (a) The authorities of the United States of America shall have the primary right to exercise criminal and civil jurisdiction over employees of the Panama Canal Commission who are citizens of the United States and their dependents, and members of the United States Forces and civilian component and their de- pendents, in the following cases : In paragraph 2(a) (i) of article XI, strike out "offense committed" and insert in lieu thereof "act or omission". In paragraph 2(a) (ii) of article XI, strike out "offense committed" and insert in lieu thereof "act or omission". In the text following clause (ii) of paragraph 2(a) of article XI, strike out "offenses committed" and insert in lieu thereof "acts or omissions". In the annex entitled "Procedures for the Cessation or Transfer of Activities Carried out by the Panama Canal Company and the Canal Zone Government and Illustrative List of the Functions that may be Performed by the Panama Canal Commission", strike out paragraph 4(b) and insert in lieu thereof the following: "(b) Upon termination of the transition period provided for under article XI of this Treaty, governmental services such as : "(i) Police ; "(ii) Courts ; and "(iii) Prison system.". Amendment No. 4 (Exec.) 95-1 At the end thereof, add the following : Article XV human eights 1. The United States of America and the Republic of Panama agree on the im- portance of maintaining and properly observing internationally recognized hu- man rights, including civil and political rights, in the former Canal Zone and commit themselves to maintaining, observing, and protecting such rights during the duration of this Treaty. 2. The Panama Canal Consultative Committee shall report annually to the national legislatures of the two Parties on the maintaining, observing, and pro- tecting of such rights. 3. The two Parties agree to permit unimpeded investigations of alleged viola- tions of internationally recognized human rights, including civil and political rights, by appropriate international organizations including, but not limited to, the International Committee of the Red Cross, Amnesty International, the Inter- national Commission of Jurists, and groups or persons acting under the authority of the United Nations or the Organization of American States. In article V, strike out the second sentence. Amendment No. 5 (Exec.) 95-1 At the end of article IV, add the following : "Nothing in this Treaty may be construed to prevent the United States of America, in accordance with its con- stitutional processes, from intervening militarily to maintain such regime of neutrality when determined to be seriously threatened by the President of the United States of America or, through the adoption of a concurrent resolution, by the Congress of the United States of America". Amendment No. 6 (Exec.) 95-1 Before the period at the end of the first paragraph of article VI, insert a comma and the following: "except that the Republic of Panama shall, upon request, afford privileged passage through the Canal to such vessels of the United States of America during any period in which the United States of America is at war". 330 Reservatiox No. 1 (Exec.) 95-1 Before the period at the end of the resolution of ratification, insert a comma and the following reservations : '•(1) that the Republic of Panama demonstrate, during the duration of this Treaty, significant progress toward observing the internationally recognized human rights of its citizens, including the right of free speech and the right to a fair trial ; and "(2) that the Republic of Panama permit unimpeded investigations of alleged violations of internationally recognized human rights by appropriate interna- tional organizations including, but not limited to, the International Committee of the Red Cross, Amnesty International, the International Commission of Jus- of the Red Cross, Amnesty International, the International Commission of Jurists, and groups or persons acting under the authority of the United Nations or the Organization of American States". Reservation Xo. 2 (Exec.) 95-1 Before the period at the end of the resolution of ratification, insert a comma a ad the following: "and subject to the reservation that before the date of entry into force of this Treaty, the Congress has adopted appropriate legislation to transfer the Canal Zone to the Republic of Panama, in exercise of the power of Congress under article IV, section 3, clause 2 of the Constitution, relating to the disposal of territory or other property belonging to the United States". The Acting President pro tempore. Under the previous order, the Senator from Rhode Island (Mr. Chafee) is recognized for not to exceed 13 minutes. [From the Congressional Record, Sept. 23, 1977 — S15510] The Panama Canal Treaties Mr. Harry F. Byrd, Jr. Mr. President, the able syndicate columnist, Henry J. Taylor, a former U.S. Ambassador to Switzerland, raised some serious charges concerning Cuban intervention into Panama and the possibility of guerrilla infiltration from Costa Rica and Colombia. I have no way of knowing if these charges are accurate, but I believe that they should be thoroughly investigated during the Senate hearings which will soon be held on the matter of the proposed Panama Canal treaties. I ask unanimous consent that excerpts from Mr. Taylor's column be printed in the Record. There being no objection, the excerpts were ordered to be printed in the Record, as follows : Communists Welcome Panama Canal Treaty (By Henry J. Taylor) President Carter has foolishly laid his prestige on the line for ratification of the new Panama Canal treaty. This blunder may not be as great as, say. Hitler attacking Russia, but it will do for openers. The real question is not the surrender of U.S. control of the Canal versus Communist control. The real question is U.S. control versus Communist control. It should be debated on that basis — for this is the stark reality. The global strategic importance of the Panama Canal in U.S. hands is self- evident. Our Joint Chiefs of Staff, beholden to President Carter, have been corralled behind the proposed treaty. But six former Chiefs of Naval Operations [the No. 1 men in our Navy] publicly oppose this give-away. .Vs for Latin America, a full 80 percent of Peru's and Chile's imports and ex- ports pass through it. The dependency is equivalent along the entire Pacific side of the South American continent ... The Latin American Communists welcome President Carter's new treaty with the forebearance of a hungTy shark. Fidel Castro's guerrilla fleet is moving armed fighters into Panama from La Colma, Cuba. Air deliveries are from a heavily guarded air base at San Julian, 90 miles southeast of Havana. The progaganda support is sparked from Castro's powerful Russia-built radio station on Cuba's Kay peninsula. Costa Rica borders on Panama. Castro has installed there Havana-based Costa Rican Communist Julio Sunol. And Castro's resident agent in Panama itself is Communist Thelma King. She won her spurs in 1964 when four U.S. soldiers were killed in the riot in our Canal Zone. Thelma King herself led the rioters into the U.S. Canal Zone and boasts of killing these U.S. soldiers. Nicaragua except for the U.S. 10-mile- wide Zone, is the only zone of stability in the entire area. President Anastasio Somoza Debalye told me that Castro had made 22 armed attempts to invade Nicaragua. Moreover, the Republic of Panama is directly threatened on its two frontiers by Communist guerrillas. How can President Carter ignore the fact that Panama borders on chaotic Costa Rica and Colombia? Is it news to President Carter that imported Red guerrillas are active in nearby El Salvador? Can he forget the Red-instigated insurrections in neighboring Guatemala and Honduras? The Republic of Panama itself is a political jungle. Demagogues' tirades light a contrived fuse under Panamanian emotions and sei-ve to distract the Panama- nians from so much that should be done. Panama is blessed with an amazing amount of rich, arable land — as rich as Iowa's best farmland. But less than half is under cultivation. Panama's true need is for better agriculture, animal husbandry and light industry. It's easy for nearly any politician to roar against the United Stiites, "Yankee Imperialism," "The Yankee Dollar," etc. — and bite the only hand that feeds Panama. (331) [From the Congressional Record, Sept. 29. 1977 — S159601 Panama Canal Issue Mr. Mathias. Mr. President, we are in the process of posing questions to the Carter administration on its proposed Panama Canal Treaty. Whether or not we ratify this treaty will depend largely on how effective the President is in making his case to us and to the country. As a very useful contribution to the on- going debate, I should like to insert in the Record an editorial by the Cleveland Press together with the very useful response written by one of my constituents, Reed I. Irvine of Silver Spring, Md. I ask unanimous consent that this article be pointed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows : Panama Canal Issue After bloody riots in the Canal Zone that left 25 dead in 19^ and after tortu- ous negotiations since then, the United States and Panama at last have agreed ''in principle" on the future of the Panama Canal. In a historic and sensible step toward decolonialism. the Carter administration wishes to yield control over the waterway and the 533 square mile Canal Zone to Panama in the year 2000. The negotiators no doubt feel they have accomplished a difficult feat, but the hardest part lies ahead : to convince the required 67 U.S. senators that it is in the national interest to ratify a new canal treaty . While we may change our mind after word-by-word reading of the treaty — it has not yet been written — the outlined agreement seems fair to both sides and we hope the Senate approves it. The Panamanians made major conces.sions : Letting the Americans run the canal for 23 more years; accepting a U.S. military presence until 2000; agreeing that U.S. forces could return after that date to defend the canal, and scaling down their annual rental demands to $50 million, which can be covered by canal tolls. Unfortunately the canal issue is an emotional one in this country and a violent debate can be expected. Ronald Reagan and other conservatives are fond of declaiming, "We bought it. we paid for it, we built it and we ought to keep it." In fact, "we built it" is about the only accurate part of the statement. We didn't buy it; Teddy Roosevelt used to admit proudly that he "took" the Canal Zone and all but blackmailed Panama into ratifying the one-sided 1903 treaty giving the United States rights there "in perpetuity." However, it is pointless to argue about ancient history. What this country got away with in an era of imperialism is not what it should practice today. It makes more sense to argue about the canal's value, which is much exaggerated by its admirers. Diplomatically it is a handicap. It is seen throughout Latin America as proof of "Yankee imperialism" and thus harms the nation's interests in the hemisphere. Strategically it is obsolete. Big aircraft carriers large naval vessels and modern tankers cannot fit through it. That is why this country built a two-ocean Navy. Also, the canal is indefensible; in wartime one Soviet submarine could close it with one nuclear missile. Economically the canal is overrated. It now carries only 2 percent of this country's coast-to-coast trade. And by the year 2000 its military and economic value will be less than toerations have sent a joint letter to the President in which they say : "As long as most of the world's combatant and commercial tonnage can transit through the Canal, it offers inestimable strategic advantages to the United States * * * Under the control of a potential adversary, the Panama Canal would become an immediate crucial problem and prove a serious weakness in the overall U.S. defense capabil- ity, with enormous potential consequences for evil." These experts note that all naval vessels except the largest (13) carriers can transit the Canal. Modern tankers carrying Alaskan oil are now transiting the Canal. Only huge supertank- ers cannot make the passage, and the U.S. does not have ports that can accommo- date supertankers. 3. You say that the Canal is overrated economically. The Xew York Times says that it saves $1.5 billion on the prices for our exports caused by higher transpor- tation cost could drive our already excessive trade deficit even higher, as our ability to compete with other countries weakened. The Canal is of even greater economic importance to several Latin American countries, who use the Canal for the majority of their shipping. 4. You say the Canal "was stolen" from the Panamanians. Rubbish ! How could we have stolen the Canal when it was we who built it? As noted above, we paid a high pric-e for the land, and Panama was delighted that we built the canal there and not in Nicaragua. They have reaped enormous benefits from it, includ- ing the attainment of a per capita GNP of over $1,000 a year. Reed Irvine. [From the Congressional Record, Oct. 4, 1977 — S16288] Ratification of the Panama Canal Treaties Mr. Sparkman. Mr. President, today the Committee on Foreign Relations con- tinued its hearings on tlie Panama Canal treaties hearing as witnesses Senators Thurmond, Hollings, and Allen, ^ and Congressmen Stratton, Flood, and Commis- sioner Corrada from Puerto Rico. For the information of the readers of the Record, I ask unanimous consent that the prepared statements of the witnesses be printed in the Record. Senator Hollings did not have a prepared statement but his remarks will be available for reading in the transcript in the committee offices. There being no objection, the statements were ordered to be printed in the Record, as follows : Statement by Senator Strom Thurmond Mr. Chairman : I am here this morning to present to the Committee and the American people my reasons for opposing the treaties with Panama. My interest in the Panama Canal is longstanding. Over the years I have intro- duced several bills to modernize the Panama Canal. In the 94th Congress, I offered a resolution signed by 38 other Senators opposing the surrender of this waterway to Panama. Last August, I visited the Canal Zone for briefings and study to ascertain any changes since my previous visit several years before. While I recognize the need for some adjustments with Panama concerning the Panama Canal. I see the retention of U.S. sovereignty as basic to continued "practical control" of the Canal, which even the President has expressed himself as being necessary. My 1976 resolution was more than sufficient warning to botli the Ford and Carter Administrations relative to the Senate's conceni in this matter and to warn the government of Panama that the treaties would be scrutinized closely. Yet the treaties have been signed with great fanfare, and the threats from Panama strongly suggest either we ratify or pay the consequences of violence and disruption in the Canal Zone. In fact, Panamanian chief negotiator Escobar Bethancourt went so far as to say * * * This country (Panama) will take a course of violence" if the treaties are not ratified. At not time in my memory have such threats and pressure been exerted on the Senate as is the case with these treaties. In making our decision, however, we must rationally decide what is in the best interest of our Nation, irrespective of the pressures and throats directed toward us. importance of canal I disagree completely with Ambassador Linowitz's statement to this Committee last week that the Canal has become "economically obsolescent." This statement is designed to denigrate the importance of the Canal and thus make the proposed treaties more palatable. The Canal is one of a very few vital world waterways. It permits rapid two- ocoan commerce very beneficial to our Nation. In 1975 about 14,000 ships transited the Canal. Approximately 70 percent of the traffic originated in the United States or was bound for the United States. It is estimated that 45 percent of Ala.skan oil will be shipped through the Canal by 1980. Furthermore, its value from a national security stamdpoint is atte.sted to by heavy use during the Korean and Vietnam Wars. Approximately 98 i^ercent of our Navy can use this Canal. As an example, in FY 19f>8, about 70 i)ercent of U.S. Government cargo headed for Vietnam used the Canal. U.S. Government vessels passing through the Canal increased from 285 in 19(>4 to 1,504 in 1968; 1,376 in 1969 : and 1.068 in 1970 during the height of the Vietnam War. Also, we must not forget our Navy has declined from 900 ships to less than 500. Admiral Thomas Moorer, immediate past Chairman of the Joint Chiefs, states 1 S«-p fi. 2. (334) 335 we no longer have a two-ocean Navy. All of our current major war plans are contingent on the interchange of ships between the Atlantic and Pacific Oceans. Ships of tlie Third and Seventh Fleets in the Pacific may have to bolster the Second Fleet or even the Sixth Fleet. All of our military services — Army, Navy and Air Force — depend on logistical support which transits the Canal regularly. Four former Chiefs of Naval Oi^erations have attested to the strategic impor- tance of the Canal in a personal letter to the President. These four great naval strategists, Admirals Anderson, Burke, Carney and Moorer, have retired from the active service and speak from great experience. In their letter to the President, they warned : "Loss of the Panama Canal, which would be a serious setback in war, would contribute to the encirclement of the U.S. by hostile naval forces, and threaten our ability to survive." Xow that we have clearly established the importance of the Canal, I want to reject outright the slogan that "Use of the Canal is more important than owner- ship." A more sensible slogan would be "Ownership assures control." As a mat- ter of fact, it can be argued that our giving up ownership of the Canal would diminish our chances for having free access to the Canal, particularly when we consider, for example, Panama's historic instability. Once the U.S. gives up sovereign and effective control of the Canal Zone and Canal, it will be. in effect, an outsider with highly questionable authority to intervene if the neutrality of the Canal is threatened. This Country would be in a very difl^cult position in- ternationally and domestically if it had to resurrect "gunboat diplomacy" and in- tervene in Panama after we surrender sovereign rights. WHY OPPOSED.^ In an effort to be brief and avoid rei^etition of prior testimony, I will attempt to list my reasons for opposing the treaties. /. 'Nature of Panamanian Government I do not believe we should negotiate on such a vital issue with a government leader who deposed an elected President by military force and over a period of 9 years has not provided the people of Panama free elections. In this period, the Torrijos government has pushed the national debt from $167 million to over $1.5 billion. Today, about 39 percent of the Panama budget goes to service this national debt. Furthermore, this government of 1.7 million people has promoted close relations with Cuba and the Soviet Union, two expansionist powers un- friendly to our Country. I seriously question why we should make national heroes out of government officials who have virtually eliminated all political and civil rights of their people. The documented human rights record of the Torrijos government is one of the worst in the world. One might ask, once sovereignty is given to Panama, will that government re- main friendly to the U.S.? Does the Panamanian government have the ix)litical strength or will to resist outside interference? Does it have the economic vital- ity to maintain and protect one of the world's vital waterways? What will we be paying after the year 2000 to keep the Canal open? If Panama finds it is unable to cope with the complex operation of the Canal, to whom will they turn? If to us, it means great outlays of cash. The only other great power to which it could turn would be the Soviet Union, through its figurehead Castro. Mr. Chairman, I wish to point out that in the prepared statements of Am- bassadors Bunker and Linowitz, Secretary Brown and General Brown, before this Committee, not one single time did any of these witnesses mention the name of General Torrijos. That should tell the Committee something about the nature of the Government to which we are being asked to turn over an approximate $8 billion national and world resource. //. Sovereignty surrendered I further oppose this treaty because it grants to Panama sovereignty six months after ratification, not in the year 2000. as the public has been led to believe. Once sovereignty is surrendered, control is lost for all practical pur- poses and control governs use. ///. Property surrendered. Six months after ratification of the Treaty, the Canal Zone ceases to exist and about 65 percent of the land and 10 of the 14 U.S. bases are given to Panama. 336 The remaining land adjoining the Canal itself is under limited U.S. control for the purpose of operating the Canal. We oblige ourselves to pay the Panama gov- ernment huge sums in various ways, totaling up to nearly $1,5 billion over the next 22 years. By the year 2000, we will be turning over an investment valued at approximately $9.3 billion. IV. Military pact rejected Our negotiators sought but failed to obtain a military pact with Panama for minimal base rights which would have greatly enhanced our ability to assure the Canal's neutrality after the year 2000. Negotiator Bethancourt stated in his address to the Panama Assembly on August 18 the U.S. desire for defense forces after the year 2000 "created a deadlock in the negotiations for some time because Panama opposed signing of a military pact." Instead, we accepted an ambiguous neutrality pact. V. Foreign troops allowed? While U.S. negotiators claim the Neutrality Treaty allows only Panama to maintain troops on its own territory after the year 2000. the Treaty is silent on I)rohibiting foreign troops prior to the year 2000. There is nothing to prevent Panama from introducing Cuban, Soviet or troops of any other nation into those areas of the Canal Zone we surrender six months after the proposed ratifica- tion of the treaty in 1978. Changing political events could prompt Panama to take such a step. In my judgment, a prohibition on foreign troops prior to the year 2000 was one of the many errors made by our Canal negotiators. VI. New canal prohiMted Another part of the Treaty with which I find fault is the provision prohibiting our construction of a sea-level canal prior to the year 2000, except in Panama or only with the permission of Panama. In this instance, we have surrendered an option which may be forced upon us. While I feel a sea-level canal is unneces- sary, why have we foreclosed this option? In doing so, we place ourselves at the mercy of the government which controls Panama. VII. Privileged passage The right to priority passage is also denied us in Article VI of the Neutrality Treaty, Instead of "priority passage" through a canal we built and have main- tained for tlie world's benefit, we are promised only "expeditious passage." Mr. Bethancourt has stated privileged passage sought by our negotiators was spe- cifically rejected. The differences in statements made by the negotiators on the two sides make it unclear what our rights would be in a given situation, although priority passage through the Canal could be vital to our national security in an emergency or war. VIII. Unfriendly ships assured passage Presently, as a result of our control of the Canal, we could deny passage to adversary ships as a practical matter in time of an international crisis or war. Under the Treaty we surrender this right as it cannot be exercised once practical control of the Canal is surrendered. This means ships aiding an enemy of the U.S. could transit supplies through the Canal. IX. Neutrality treaty One of my most significant concerns is the ambiguity contained in the Neutral- ity Treaty. Ambassador Linowitz and others have maintained that no limits were spelled out in the Treaty, so we will be free to take whatever steps are necessary to protect the neutrality of the Canal. These remarks miglit be reassuring to tlie American public, except for the comments made by Chief Negotiator Bethan- court on the.se provisions to the Panama Assembly on August 19. He stated: "Those people believe that the right to intervene is granted, but nobody grants the big powers the right to intervene. They intervene wherever they damn well please with or without a pact." (applause) Additionally, in an August 24, 1977 radio broadcast, Mr. Bethancourt is quoted as saying : "The pact does not establish that the United States has the right to intervene in Panama. This word (intervention) was discussed and eliminated * * *." 337 liater he stated : "* * * the neutrality pact does uot provide that the United States will say when neutrality is violated." Indeed, Mr. Chairman, Articles IV and V of the Neutrality Treaty are so ambiguous as to lend themselves to various interpretations. This reason alone is sufficient to reject the Treaties. BROAD CONCERNS Mr. Chairman, these are some of the specific concerns I have relative to these Treaties. There are other broader issues involved. Will our ratification of these treaties be seen as a pattern of withdrawal in view of our retreat in Korea, Southeast Asia and possibly Taiwan? This misguided direction of our foreign policy engenders consternation on the part of our Allies and audacity on the part of our adversaries. This type of audacity has even been highlighted by the reckless and provoca- tive statements of Mr. Bethancourt and others about violence. We cannot hope to deal effectively with other Nations as a world leader if we yield to blackmail. That is the only word to describe the threats of violence and sabotage which treaty proponents are broadcasting far and wide, and using as their chief argument for ratification. If the Senate were to ratify a treaty in the face of such threats, it would show the world a new policy alien to our na- tional character and our history and which would invite further exploitation. While I will leave to others the history of our acquisition of this property, no one can deny its benefits to Panama. BENEB'ITS TO PANAMA Between 1^6 and 1973, according to the House Appropriations Committee hearings. Panama was the recipient of $342 million in total U.S. aid, more per capita aid than was granted to any other country in the w^orld. Benefits to Pana- manians in 1975 alone amounted to $29 million in direct purchases in Panama by U.S. agencies; $108 million in wages to non-U. S. citizens; and $39 million in expenditures by U.S. employees. We have not exploited Panama ; rather, our aid has enabled its people to enjoy one of the highest GNPs per capita among all 19 Latin American nations, and the highest per capita income in Central Amer- ica. Panama has from 1960 to 1974 a per capita growth rate surpassed only, and barely, by Brazil. Furthermore. U.S. private investments represent 50 percent of the capital investment in Panama. POSITIVE ALTERNATrV'ES Mr. Chairman, I am not opposed to a new arrangement with Panama, but strongly opposed to this treaty. In the past, I have supported the Terminal Lake- Third Lock Modernization Plan. This would provide for approximately $2.5 bil- lion in capital investments over a 5 to 10 year period. Such a major step will provide an opportunity between the people of the United States and the people of Panama. Under no circumstances, however, can we afford to cede sovereignty over the Canal to Panama. Stability for the Canal can only be maintained by U.S. con- trol. Without sovereignty, we have no control. No provision of the treaties is more detrimental to our National interest than the provision which relinquishes sovereignty and control. In conclusion. Mr. Chairman, neither our interests nor the interests of the people of P^mama are served by the treaties. The only outcome of ratification can be danger ahead. [From the Congressional Record, Oct. 4, 1977 — S1G350] The Panama Canal Treaties Mr, Thurmond. Mr. President, earlier today I testified before the Foreign Relations Committee on the provisions of the pending treaties that would give the Panama Canal Zone to the Republic of Panama. During my testimony opposing these treaties, I raised the point that Panamanian officials are putting a differ- ent interpretation on some of the treaty provisions from those interpretations expressed by U.S. officials who support the treaties. I have now been handed a wire from the American Embassy in Panama to the U.S. Secretary of State. It was obtained by Senator Robert Dole and corrobo- rates my statement this morning about Panamanian interpretations of the treaties differing from those expressed by proponents in this country. Mr. President, I ask unanimous consent that a news release on this matter by Senator Dole and the wire to the Secretary of State be printed in the Record. There being no objection, the news release was ordered to be printed in the Record, as follows : Dole : "Confidential"' Cable Proves Panama Canal Treaty Flawed Washington, D.C. — Senator Bob Dole today released the text of a Confidential State Department cable which he said proves "beyond a doubt" that U.S. and Panamanian officials have far different interpretations of key defense provisions in the proposed Panama Canal Treaties. Dole has requested comments from Secretary of State Cyrus Vance on the contents of the cable, which the Senator received a copy of on Monday of this week. "This document demonstrates beyond a doubt the vast difference in interpretation of the most important part of these treaties — that portion which bears directly on our vital national defense inter- ests," Dole said. Senator Dole, who is due to testify before the Senate Foreign Relations Com- mittee Wednesday morning, said that the Senate "must clarify our defense rights by Amendment not by weak 'understandings' that have no legal and binding effect." Senator Dole is the only Senator to have introduced Amendments and Reservations to change the language of the Canal Treaties proposed by President Carter. The State Department cable was received from the American Embassy in Panama last Thursday, September 29, and described Panamanian negotiators as "disturbed" over testimony by Secretary of State Vance and U.S. Ambassadors Ellswortli Bunker and Sol Linowitz before the Senate Foreign Relations Com- mittee last week. One Panamanian negotiator confirmed that the U.S. would have no military intervention rights under the Treaty, and there would be no "preferential passage" for U.S. warships through the Panama Canal. Secretary Vance, along with several other Administration witnesses, indicated in his testi- mony last week that such American rights were "understood" within the language of the Treaties. Senator Dole said it is "essential" that the United States retain unilateral authority to step in and defend the Canal militarily at any time it is threatened. He said it is also essential to have clear-cut rights to priority passage through the Canal during wartime. Senator Dole has already introduced Amendments to the Treaties which would guarantee both rights to the United States permanently. In other remarks prepared for the Committee, Dole said defects and omissions in the Treaties must be corrected by Amendment or Reservation, both of which would be legally binding, rather than by Understanding or Declaration, which have only an interpretive purpose for the party that makes them. Dole described in detail his six Amendments and two Reservations which, in addition to those described above, would cut U.S. payments to Panama in half; guarantee the U.S. right to construct a new interoceanic canal anyplace in the Western hemisi)here ; extend the transition period for transfer of U.S. jurisdic- tion over the Canal Zone; insist on human rights observance in Panama for U.S. (338) 339 and Panamanian citizens ; and give tlie House of Representatives a right to act on the Treaty proposals. STATE DEPARTMENT CABLE Subject : negotiator's concern over hearings : 1. The political counselor called Carlos Lopez Guevara on another matter this morning and found him disturbed over some of the testimony before the Senate Foreign Relations Committee — particularly the first day. Two matters seemed to trouble him most : A. Interpretation of the expeditious-passage clause that U.S. war vessels get "preferential" treatment or that they may "go to the head of the line". Lopez Guevara said that Royo and Escobar tentatively accepted preferential treatment for us and Panamanian war vessels, but in a later session this was specifically rejected by Panama and the word "expeditiously" was substituted. B. Assertions that the treaty gives the U.S. any right to "intervene" in Panama. He said that Article IV means nothing more than what it says. "Intervention is simply forbidden by international law," he said. "Panama cannot agree to the right of the U.S. to intervene." He urged that U.S. officials stop using the term "intervention" in describing its rights under the treaty. He also expressed the view that those testifying before the committee on Monday had made too much of General Torrijos' statement that Panama w^as under the umbrella of the Penta- gon. "The general was stating a fact, not giving the U.S. any right to intervene." He said he had no way of knowing what Torrijos thought of the testimony, but he, Lopez, personally was disturbed with many of our interpretations. He prom- ised to "set the record straight" in a speech he is to make tonight. 2. The political counselor pointed out some statements which Panamanian negotiators had made which do not accord with our understanding of the neutrality agreement. He said that, on balance, the positions on neutrality given by Escobar and Boyd, while not identical with our interpretation, were moderate in the Panamanian context. However, certain statements taken by themselves and out of the overall context, have proved difiicult to explain to skeptical Sena- tors. He pointed out that most of the difficulties in the Senate so far have come from uncommitted Senators such as Baker and Stone, rather than hardline treaty opponents. He suggested that it might be useful if the Panamanians would estab- lish a standard position, rather than speak extemporaneously on this delicate question, 3. Lopez Guevara said he understood the difficulties which U.S. negotiators face and asked for copies of some of the offending remarks. However, he cautioned that, no matter how necessary in the American process, there were some things that no Panamanian Government could accept. 4. Comment : As the negotiators are aware, Lopez Guevara, though a moderate and reasonable man, is relatively inflexible on some questions. As he pointed out, he was at the head of those who did not accept the concept of priority passage for U,S. war vessels. He is considered a technician within the government, but he is influential. As we talk with other negotiators and ofiicials who are cam- paigning for the treaty here, we will urge caution on any statement concerning U.S. rights under the neutrality treaty. But we are likely to be faced with increas- ing irritation over — and perhaps public disavowals of — our interpretations. Any assertion which deems to claim a right to intervene in Panama's domestic affairs is almost sure to be challenged here. — Gonzalez Mr. Harry F. Byrd, Jr. Mr. President, will the Senator yield? Mr. Thurmond. I am pleased to yield to the able Senator from Virginia. Mr Harry F. Byrd, Jr. Mr, President, I have seen the wire to which the distinguished Senator from South Carolina refers. It is a wire from the Ameri- can Embassy in Panama to our State Department, It is a very significant statement, I am glad the Senator has put it in the Record, Earlier today, I inserted in the Record the testimony given by the Senator from South Carolina before the Foreign Relations Committee today. In that testimony, the Senator from South Carolina brought out many facts which I think are very important for the Senate to know. Mr. Thurmond. I thank the distinguished and able senior Senator from Virginia. [From the Congressional Record, Oct. 5, 1977 — S16453] Panama Canal Treaties Mr. Pebcy. Mr. President, our distinguished colleague from Virginia (Mr. Scott) has made a detailed study of the proposed Panama Canal Treaties and indicated a number of concerns with regard to various provisions contained in them. Senator Scott testified today before our Committee on Foreign Relations and, in light of his well-researched presentation, and also in viewing the fact that he testified in the afternoon when some of our colleagues had scheduled conflicts, I ask unanimous consent that the statement made by Senator Scott be printed in the Record. There being no objection, the statement was ordered to be printed in the Record, as follows : Statement by Senator William L. Scott Mr. Chairman, I appreciate this opportunity to appear before the Foreign Rela- tions Committee and to express my personal views on the important matter now under consideration. I am aware that the administration in urging ratification has stressed the long period of negotiations under four presidents, emphasized the support of Latin American countries and the need to yield to world opinion to relinquish the Canal Zone to Panama. However, in this country sovereignty resides in the people and not the president or the ofl3cials who negotiated the pro- posed treaties. Therefore, it would seem that the will of the people should be reflected in our decision. There is little doubt that the American people are op- posed to the ratification of the treaties, and I have great faith in the collective will of the majority. My own mail is roughly 5 percent in favor of the treaties and 95 percent in opposition, and I expect each Senator's mail is quite heavy. So per- haps in the final analysis rather than the White House educating the American people, the President and the Department of State may receive an education in American Government. I would certainly hope that this will prove to be the case. My views are based not only on mail from constituents, but upon two recent trips to Panama and South American countries, a thorough reading and rereading of the treaties and background information, independent investigations, listening to testimony before the Subcommittee on Separation of Powers of the Senate Judiciary Committee and studies made by the Library of Congress. There appear to be many objectionable provisions in the canal treaty which should be eliminated or clarified, such as the prohibition against the United States constructing a new canal anywhere within the isthmus without the consent of Panama, and the doubtful interpretation of "expeditious passage". However, the beginning of article I of the Panama Canal Treaty, to my mind, is by far the most objectionable feature because it provides for the abrogation of all prior treaties with the phrase, "This treaty terminates and supersedes" the treaties of 1903, 1936, 1955 and "all other treaties, conventions, agreements and exchanges of notes between the United States of America and the Republic of Panama concerning the Panama Canal." Under the 1903 treaty we guaranteed the independence of the new country of Panama, paid $10 million and agreed to an annual payment of ,$250,000 and ob- tained both title to the canal zone and sovereignty over it. Other actions taken by our government to perfect our title included the purchase of the French canal properties for $40 million ; what was tantamount to a quitclaim and recognition of our title from Columbia for the sum of $25 million ; and the purchase of private rights from owners and squatters expressly excluded from the 1903 treaty. All tliis, however, would be vitiated by the first sentence of article I of the present canal treaties. It is true that under numbered paragraph 2 of article I, the Republic of Panama grants to the United States for the remainder of this century "the rights neces- sary to regulate the transit of ships through the Panama Canal and to manage, operate, maintain, improve, protect and defend the canal." But we would be (340) 341 managing operating, maintaining, improving, protecting and defending property belonging to the Republic of Panama rather than American property as the situation is today. . x.. w Mr. Chairman, as you know, a valid contract must contain consideration. \Ve speak of something of value flowing from one party to the other, mutuality but in my judgment these treaties are for the benefit of Panama alone. I find no new benefits for the United States. It does not appear, Mr. Chairman, that there is serious concern withm the executive branch of government to the role of the Congress under article IV of the Constitution. As you know, the second paragraph of section 3 of the article provides : "The Congress shall have power to disix)se of and make all needful rules and regulations respecting the territory or other property belonging to the United States ; * * *" To determine the proper role of the House under article IV, I requested a study be made by the Congressional Research Service which responded with an excel- lent and objective legal memorandum dated August 4, 1977, concluding that prece- dent indicates Congress has exclusive power to dispose of property in the Canal Zone. I ask, Mr. Chairman, to include a copy of this memorandum in the Record. Attorney General Bonaparte, in an opinion dated September 7, 1907 (26 Att'y Gen. 376), stated that sovereignty over the Canal Zone was not an open or doubt- ful question and applied what he stated was the first rule of construction, "that plain and sensible words should be taken to mean what they say." The Attorney General added: "the omission to use words expressly passing sovereignty was dictated by reasons of public policy, I assume ; but whatever the reason the treaty gives the substance of sovereignty, and instead of containing a mere declaration transferring the sovereignty, descends to the particulars 'all the rights, power and authority' that belong to sovereignty, and negatives any such 'sovereign rights, power, or authority' in the former sovereign." Now, Mr, Chairman, I realize that some of our people in the executive branch are attempting to convey the impression that we do not possess either title or sovereignty but this is contrary to the opinion of Secretary of State Hay in 1904 who stated, "that the grant accomplished by the treaty was a grant of land and sovereign right thereover, and not a mere concession or privilege, is shown by the granting clauses and also by the references to the grant in subsequent clauses of the treaty ; * * *" Later he said : "it cannot escape observation that the legislative branch of the government of the Republic of Panama by legislative enactment declared the zone to be 'ceded to the United States,' and dealt with accordingly." And still later he stated : "the United States at all times since the treaty was concluded has acted upon the theory that it had secured in and to the canal zone the exclusive jurisdiction to exercise sovereign rights, power and authority." Mr. Chairman, I ask that this entire letter of Secretary Hay be inserted in the Record. The Supreme Court in the case of Wilsoti v. Shaw, 204 U.S. 24 (1907), stated that we hold a valid title to the canal zone and compared our title with the then Territory of Alaska. The court added : "It is hypercritical to contend that the title of the United States is imperfect and that the territory described does not belong to this Nation because of the omission of some of the technical terms used in ordinary conveyances of real estate." Mr, Chairman, I ask that a copy of this uanimous opinion by the Supreme Court also be included in the Record. In 1971, the Fifth Circuit Court of Appeals in U.S. v. Hushand B. (Roach) 453 F. 2d 1054, cert den. 406 U.S. 935 (1972), stated: "The canal zone is an unincor- porated territory of the United States." So, Mr. Chairman, the first article of the canal treaty is attempting to transfer United States property and sovereignty over the canal zone. These are opinions of both cabinet officers and our highest court made near the time we acquired the zone and the exhaustive study of authorities made by the Library of Congress in its paper dated August 4, 1977. The only rationale I know for persons presently holding positions within the executive branch of government to deny that we hold title or sovereign rights in the canal zone is to close ranks in support of a treaty signed by the President. I wonder if each Senator early in his school experience didn't learn that the United States acquired the canal zone, rid the area of disease, constructed the canal and has operated it under the American flag since the beginning of this century. At a time when world domination is being sought by a form of govern- ment entirely different from our own, it appears untenable to give away this vital 342 artery of commerce, to pay Panama for taking it and to commit ourselves to defend it. This view is shared by Admiral Thomas H. Moorer, chairman of the Joint Chiefs of Staff from 1970 to 1974, who testified before the Senate Subcommittee on Separation of Powers. Toward the end of his testimony on July 22 of this year, Admiral Moorer made these statements : "Surrender of U.S. sovereignty over the canal zone would inevitably lead to the transformation of the entire friendly character of the Caribbean and the Gulf of Mexico. Everything would depend on the attitude of those who held sovereignty and ownership ... I might say that in military affairs there is no substitute for ownership of the territory and the ability to control or to deny the waters and the airspace." Of course, Mr. Chairman, Admiral Moorer retired as our number one military officer and is in a position to candidly express his opinion at this time and I be- lieve we can well understand the hesitancy of some active members of our mili- tary forces publicly disagreeing with their commander-in-chief. We need only to reflect on General Singlaub being called back from Korea and being reassigned because of a candid statement made by him and the rebuke of General Starry by the Secretary of the Army to realize that active duty officers and even civilian government officials are not entirely free to express opinions contrary to the administration's position. Before these rebukes, however, on March 11, 1977, during a closed session of the subcommittee on manpower and personnel of the Committee on Armed Serv- ices, Admiral Maurice Weisner, presently Commander-in-Chief, or in other words, the commander of all of our armed forces for one half of the globe, with head- quarters in Hawaii, responded to specific questions regarding the importance of the canal to the United States. This testimony is reported at page 2378 of the hear- ing on military procurement for the fiscal year 1978 and I ask unanimous consent, Mr. Chairman, to include the page in the record. He was asked for his views as to the importance of the Panama Canal ; whether there would be any adverse effect on his command if the Panama Canal was not under the control of the United States. Let me quote his response : "I can see adverse effects, Senator Scott. It takes considerable time to move items by sea from the east coast to the Pacific. Without the Panama Canal, you are adding 3 weeks' time in shipping critical items such as ammunition from an east coast port rather than from a west coast port." Then I asked the admiral if he would see a need for an increase in our naval •strength if we did not control the Panama Canal. Admiral Weisner responded : "Yes ; we would have to put these critical items being shipped by sea over a greater area." This, of course, is a response of an active duty military commander before the Singlaub affair. Returning briefly now, Mr. Chairman, to the conclusion of the testimony by Admiral Moorer before the Judiciary Committee, he states, and I quote : "Anyone in this country who thinks tliat Soviet Russia is not staring down the throat of the Panama Canal is very naive, and I think it says something to note that the Soviets understand the importance of the Panama Canal apparently far more than many in our own country." On September 8th of this year, retired Admiral John S. McCain, Jr., also testi- fied before our subcommittee on separation of powers and I am quoting this 4-star admiral : "From my combined military experience which includes Europe. Asia, the Pacific, the Caribbean and the United Nations, it is my conviction that U.S. interests are best served by keeping the canal, by retaining undiluted sovereignty over the U.S. Canal Zone." He added, and again I quote: "Finally, I would like to re-emphasize the importance of the June 8, 1977 letter of the four greatly dis- tinguished chiefs of naval operations to the president that was quoted in the testimony of Admiral Moorer. Their conclusions reflect a vast background in- cluding combat experience, and are more pertinent today than ever. Retired mili- tary officers are completely free to voice their innermost convictions. Active duty oflicors have an obligation to support the policies of their commander-in-chief." T would hope, :Mr. Chairman, tliat this committee will call more retired military officers in whom you have confidence and who are free of constraints from their commander-in-chief and ask their candid, personal opinions on the dangers of our government parting with title to the canal and the gradual turnover of full control to the republic of Panama. Mr. Chairman, we sometimes hear that Latin America favors the transfer of title and control of the canal zone from the United States to Panama but I have taken two trips to Latin America this year and have had the opportuntiy to talk 343 with chief executives and other principal oflBcials of a number of Latin American countries, with embassy personnel, with intelligence officers, with American citi- zens, as well as foreign nationals within the countries visited. In Colombia I learned that because of kinship with an adjoining Latin country, Colombian officials do favor the transfer of the canal but are very much concerned about the contemplated increase in tolls, stating that the only practical way to transfer material from one part of their country to another is through the canal. Brazilian officials didn't seem to have any real concern regarding the proposed transfer, referring to it as a matter between the United States and Panama. Per- haps this is because Brazil fronts on the eastern coast of the South American continent and is not among the prime users of the canal. In Argentina, officials indicated that they did not make extensive use of the canal but expressed fear that it might come under Communist control. Chilean officials were even more concerned of the possibility of Communist in- fluence or control of the canal indicating that 95 percent of their commerce used the canal and that they could not afford an increase in tolls or to have this vital artery subject to direct or indirect control by Communists. Chilean officials in- dicated that our contemplated action in giving up the canal appeared to be con- trary to the best interest of the world community and they would much prefer that we retain complete control of the canal. In Peru, we again heard that Panama was a neighboring country and because of this they favored the transfer to Panama. However, officials indicated their country would suffer greatly if the tolls were raised as appears to be inevitable if the treaties now under consideration are ratified. Contrary to .some suggestions, officials of every South American country visited indicated that there would be no repercussions from their country if the Senate failed to ratify the treaties. Within the canal zone itself, we heard the strongest opposition and the greatest fear of Communism. American citizens complained of violation of human rights, they spoke of lack of expertise and management ability, of the differences between salaries within the zone and the Republic of Panama. Many indicated that they would not continue to work within the canal zone if it came under the control of Panama. I inserted a detailed statement of the Panamanian trip in the August 4, 1977 Congressional Record and included a statement by the heads of various civic groups within the Canal Zone. Should any Senator have any doubt about the feeling of American citizens living in the Canal Zone, he might want to refer to this statement. It concludes, and I quote: "for ourselves as U.S. citizens living and working thousands of miles from our homeland, we can say 'pack us up to- morrow. We're ready to go.' But for the sake of U.S. commerce and the U.S. na- tional interests in general in the western hemisphere we urge you to examine the proposed treaty in minute detail. We urge you to visit here for more than three days, to observe the situation with your own eyes and not to depend solely on briefings by U.S. or Panamanian government officials. The new treaty with Pan- ama will have long-range repercussions that coming generations will have to live with ; we urge you not to ratify a new treaty solely because the State Department says that a treaty is the cure-all to problems with Panama. The Russia-Cuba axis and the American electorate are waiting to see which way the treaty goes. A hasty decision on the part of our Congressmen without giving deep and thought- ful study to the question would please the former and infuriate the latter." Now, Mr. Chairman, on this question of Communist influence, Mr. Charles Con- neely, a member of the professional staff of the Armed Services Committee, and myself talked privately in a number of Latin American countries with embassy officials, with military intelligence officers, with CIA officials, with both American citizens and foreign nationals about the possibility of Communist influence. We first visited in Panama and were somewhat skeptical, or thought perhaps Ameri- cans living within the zone might tend to exaggerate the question of Communist influence. Yet, the .statements they made were verifled in private conversations with the American intelligence community in various Latin American countries. In acting upon this treaty we may well be considering not only future control of the Canal Zone but future control of the Caribbean. Therefore, it would seem important enough to the defense of our own country and that of the free world to have military and civilian intelligence officials, both active and retired, to testify under oath in closed sessions regarding Communist influence, within Pan- ama and other nations of Latin America. Time after time we heard tlie names of leading political figures in Panama identified as Communists and were told that there were strong Communist influences throughout the Panamanian government. 99-592—78 23 344 I call these statements to the attention of the committee because of their repeti- tion by so many people during our South American visit and suggest that the com- mittee endeavor to ascertain the truthfulness or falsity of these allegations. I believe the committee and the Senate will want to consider these factors in determining whether to advise and consent to the treaties. My own opinion, Mr. Chairman, is that these treaties should be defeated. But I would hope that the administration could then be encouraged to negotiate an arrangement for joint control by the United States, Panama and a limited num- ber of Latin American countries but with ownership of the Canal Zone remain- ing in the United States. [From the Congressional Record, Oct. 6. 1977 — S16461] The Pa>ama Canal Treaty Cable Mr. Dole. Mr. President, I want to take just a few minutes to comment on a matter of grave concern to me and — I hope — to many of my colleagues. That is the question of ju-st how far this administration is prepared to go to protect itself from embarrassment over the proposed Panama Canal Treaties. On Monday of this week, I was handed a copy of a September 29 State Depart- men cal»le which gave me great cause for concern. The cable contained informa- tion — previously unavailable to either the Senate or the general public — which conflicted with te.stimony presented by key administration witnesses on the canal treaties last week. That was testimony on American rights under the proposed treaties to protect our defense interests. The cable verified what many of us suspected all along: That American and Panamanian negotiators have far different interpretations of just what rights we would keep under the permanent neutrality treaty provisions. Since this viral question bears directly on the Senate's decision as to whether the treaties should be ratifie;tly, and located in areas where no harbors to accommodate deep draft vessels were available. The third non-Panamanian route. No. 25 through Colombia, was selected by the Commission as feasible only if nuclear excavation were employed. Otherwise it would be prohibitively expensive. But the Commission also rejected nuclear excavation as both technically and politically unacceptable. Consequently, they also rejected Route 25 as not viable. Of the remaining 4 Panamanian routes, the Commission narrowed its choice to Routes 10 and 14, giving first nod to Route 10. (See Map 4.) Tliis preferred route involves relatively small excavation quantities; retains the full Panama Canal capal)ility at minimum risk during construf^tion and for as long as desired after construction ; and has good supporting facilities available. It lies approxi- mately 10 miles west of the existing canal, just outside the present Canal Zone. Construction of a canal on Route 10 would not require a shift in Panama's metropolitan centers. SUMMARY Taken together, the military and foreign policy values, the savings from re- tnininir exisf inir enoriry d^liverv infrastructures. r\n(l the reduced transportation costs o-f a sea-level canal would appear to justify such a project even in the absence of strict financial feasibility, which, as we have seen, is not itself obvi- ously lacking. But there is even one further advantage of a sea-level canal. It has the potential of defusing the controrersy over the present canal. 359 The United States — ^perhaps in conjunction with other interested parties such as the State of Alaska, the international oil companies, Japan, Mexico, Vene- zuela, and countries on the west coast of South America — could guarantee the bonds to finance a new sea-level canal fully owned and operated by the Pana- manians. It would be strictly a business arrangement with a Panamanian guar- antee of access and reasonable tariffs as the only quid pro quo. This would pro- vide Panama the economic control over her resources she demands, and would at the same time defuse the present controversy. The United States, for her part, would obtain the economic advantages already pointed out, and would achieve her ultimate goal of a defensible canal available to all at reasonable rates. These advantages which would accrue to the United States through construc- tion of a sea-level canal make it well worth our while to maintain the good will of the Panamanians, which I feel certain can be done if we ratify the treaties now before us. TABLE 4.— TRANSPORTATION ALTERNATIVES ALASKAN CRUDE WEST COAST SURPLUS (JANUARY 1977) Transport costs by routed Projected Capital Project Thruputi start-up investment2 Chicago Houston Trans-Guatemala 1, 200 Transmountain 165 Northern tier: Phase! 600 Phase 1 1 800 Sohio: Phase I 500 Panama transshipment. Cape Horn 1/81 934 2.52 2.16 1/79 115 2.30 1/81 1,630 2.78 1/84 U18 1/79 472 2.29 2.06 (5) 2.83 2.46 (5) 3. 53 3. 14 1 Thousands of barrels per day. 2 Millions of dollars. 3 Dollars per barrel. * Incremental. 'Immediate. CHART 2 SEA-LEVEL CANAL SAVINGS Cost of transportation i Total per day 2 Total per year Total for 5 yr Total for 10 yr Existing canaL $2.46 $1,230,000 $448,950,000 $2,244,750,000 $4,489,500,000 Sea-level canal 1.75 875,000 319,375,000 1,596,875,000 3,193,750,000 Savings .71 355,000 129,575,000 647,575,000 1,295,750,000 Sohio line.... 27o6 1, 030, 000 375, 950, 000 1, 879, 750, 000 3, 759, 500, 000 Sea-level canal 1.75 875,000 319,375,000 1,596,875,000 3,193,750,000 Savings. .31 155,000 56,575,000 282,875,000 565,750,000 1 Dollars per barrel. 3 At 500,000 bbl/day rate. Statement of Senator Laxalt Mr. Chairman, I am pleased to appear before this distinguished Committee to offer my views on the proposed Panama Canal treaties. Let me say at the outset that I oppose these treaties and I intend to vote against ratification when they are submitted to the Senate. My objections range from what the treaties represent to specific problems with what they actually say. In addition, I am quite concerned about how the Carter Administration is going about "selling" them to the American people. what the treaties represent The proposed treaties pose a grievous risk of loss within 22 years and consti- tute a certain loss after that time of a vital strategic and economic asset for the United States. To my mind, they also set a defeatist one for our overall foreign policy which is unworthy of our people. 99-592—78 24 360 For me, the crucial question to be considered in assessing the treaties for possible ratification is one of trust. In hard practical terms, how much confidence .should we as one Nation put in even the most solemnly pledged word of another nation when our vital national security assets are at stake? And, in this case with respect to Panama, does the nature of its government and the character of its leader add credence to the proposed undertaking? Mr. Chairman, I suggest in this uncertain world that we need to be very careful in selecting those upon whom we rely in basic security matters. What is more, insofar as international partners are concerned, the present Panamanian government is hardly one in which I would repose a lot of confidence much less the guardianship of a vital U.S. asset. We must remember as we consider these treaties that in the international arena each sovereign state is the ultimate judge of its own actions. We can and we should discuss in detail precisely what is in the treaties. But, we also need to look beyond the treaty language. We need to evaluate above all the credibility of the present Panamanian government. How close is General Torrijos to Havana and Moscow? How secure is his tenure? Is he likely to demand rapid renegotiation before the ink is dry on these pacts? Would his potential successors? As a law-abiding Nation, we tend too frequently to assume that the word of other nations is as good as our own once pledged. Many times it is. But memories of Yalta, Potsdam, and Suez, should teach us to look beyond the specific language in international negotiations to the character of our potential partners before trusting them with important assets under even the most tightly written treaty. I suggest, Mr. Chairman, that Gen- eral Torrijos' Panama will fail to withstand this test if this Committee chooses to apply it with its customary rigor. As important as the credibility of the Torrijos regime in assessing the context of the treaties is the message which Senate acceptance of them would send to our allies and adversaries around the world. I agree fully with Secretary Vaiue who said in his statement opening these hearings. "How we respond to an issue such as the Panama Canal will help set the tone for our relations with the rest of the world for some time to come." Where I differ with the Secretary, of course, is in the kind of tone which I believe these treaties set for our foreign policy. In my judgment, the domestic debate on the acceptability of the treaties is between those who see them as an expression of historical generosity and those who view them as a rather abject lesson in capitulation. I am afraid that to me they represent much more of the latter and as such are decidedly unworthy of our people. Since the end of World War II, the United States has played an active role in maintaining the balance of power throughout the world. Out of a renunciation of prewar isolationism came ANZUS, NATO, bilateral relations with Japan, Taiwan, and Israel ; all of which have served our Nation very well. In my judgment, the great architects of post-war U.S. foreign policy. General Marshall, President Truman, and Senator Vanderburg, are owed a real debt of gratitude for this. They recognized that pre-war isolationism was not healthy either for this country or the world at large. They knew that our prosperity, our security, and even the future of our democratic institutions were all intimately bounded up with the fate of other democratic nations. I personally feel that the Panama Canal treaties pose a direct threat to the multilateral security structure created by these far-seeing visionaries. Not neces- sarily in isolation, but as part of a larger mosaic of U.S. hesitancy and with- drawal, serious questions will sooner or later occur to our allies and essential confidence will be impaired. Because it is this confidence which binds our security structure, that structure can only be impaired when serious discussion begins to "de-recognize" Taiwan, when proposals are made to abandon development of important strategic missile systems, and now when we propose to give away an imiKjrtant piece of real estate for the pure and simple reason that when push comes to shove, we do not think we can hold it? To me tliis is precisely what the proponents' position boils down to. They cite fears of sabotage, guerrilla warfare and the alienation of Latin American ()l)inion. The military leaders among them even draw distinctions between con- cepts of possession and use of the Canal. But, the essence of the proponents* position is that because the United States is not phsyically able to maintain its sovereignty over the Canal Zone, we should relinquish it before it is taken away frojn us. 361 This to me is a rather sorry spectacle. Although Santayana did say that those who do not learn from history are condemned to repeat it, I believe that we should not be frightened into giving up important strategic assets by scary specters of our own creation. The violence argument is thus worthy of detailed comment. Ambassador Linowitz stated it in perhaps the clearest way when he said in a Voice of America broadcast : "PCxpectations have been raised so high in Latin America that failure to get the treaties ratitied could l)ring a whole range of consequences including violence." I do not believe that the issue of potential violence should be ignored, but I do feel that we need to inquire closely as to its origins. To me, the treaties represent the worst possible way of dealing with potential security threats to the Canal from within Panama. The expectations of Panamanian extremists have certainly been raised by the prospect of taking over the Canal. But treaty proponents need to ask themselves wiiether those expectations will be satisfied by asking extrem- ists to wait 22 years, or w^hether violence and sabotage are now possible, irre- spective of Senate ratification, simply because of the atmosphere of heightened expectations which the treaties create without really satisfying. In view of this tinderbox situation, I see Senate refusal to ratify as providing .at least some deterrence to violance by demonstrating that the power of the United States remains behind its legitimate interests. Ratification of a half-way house treaty, on the other hand, because it represents a clear capitulation under threat of force without satisfying extremist expectations, would be a signal to jjotential rioters and saboteurs that they need not wait 22 years. All they need do is push just a little harder because the United States would have dearly .demonstrated its vrillingness to treat with violence. Then it would be open season tor extremists to attack not only the Canal but the property and persons of U.S. ,nationals throughout Latin America. The Administration's eagerness to conclude a Canal agreement, under these circumstances, is of serious concern to me. A fundamental decision was made at the end of World War II that the United States could not retreat into itself and ;naintain its security unilaterally for long. Granted, there is a certain weariness resulting from a prolonged laud war in Asia. But, that w^eariness has not occa- sioned any lack of will among our people to maintain U.S. sovereignty in an area much closer to home. Quite the contrary. Recent polls indicate that a vast major- ity of the American people favor keeping the Canal. In truth, the weariness is on the part of this Administration. I believe our people without being bellicose, do want to jilay an active role in the world. I believe our people do recognize certain areas beyond our borders as vital to our national interests. And. I think they will decisively reject a foreign policy which ifalls short of their standards. President Carter has promised to give this Nation a government as good as its people, but his Panama Canal treaties simply fail .to measure up. WHAT THE TREATIES SAY The terms of the treaties are no better than the overall tone which they set for American foreign policy. I am opposed to the frontend concessions of the key , principle of sovereignty. I believe the rapid turn-over of crucial support services to the Panamanians bodes ill for the effective operation of the Canal. I think the human rights of Americans left in the Zone and our ability to :guarantee the neutrality of the Canal are inadequately protected. And, it is to me an absolute scandal that we are proposing to pay the Panamanians to take ;the Canal off our hands. /. Sovereignty The main purpose of the treaty is hardly concealed. The preamble to the ,agreement opens by "acknov^ledging the Republic of Panama's sovereignty over its territory." Quite clearly at the very core of the nature of the present relation- ..'^hip between the United States and the Panama Canal is our own sovereignty oxer the Canal and Canal Zone. In my judgment, it would be bad enough if this new treaty confined itself to passing sovereignty to the Panamanian government. But, as I read the existing language, it recognizes that Panama already has isovereignty. Thus, the Panamanians could presumably exercise their right to expel the United Stntes from their country whenever they desire. Accordingly. we are not only u'iving away our Canal, we are asserting that we have never rbad it. 362 2. Effective canal operation Despite some obvious disputes over the running of tlie Canal, particularly reflected in demands by Panama over the year for more revenue and control of the Canal, nearly everyone agrees that the Panama Canal Company has operated an extraordinary safe, fair, and efficient operation. It has made a major contri- ution to the development of world trade and maintained our own security interests in the Western hemisphere. In scrutinizing the terms of the new agreement, I cannot help but wonder whether the operation will continue in the same equitable and efficient manner in the future. Article X requires that the American work force must "within five years ... be at least 20% less than the total number" of those working there at present. And, under section four of the same Article, now non-Pana- manian employees can only work for terms of five years duration (aside from some special circumstances). Thus, discrimination is mandated in the treaty against the very personnel whose qualifications are necessary for the continued operation of the Canal. Quite simply, Panama does not now have, and cannot have within the short period of time required, the skilled personnel to fill adequately the jobs of those who will leave their present jobs, whether voluntarily or under duress. Jobs such as the ships' captains that navigate the vessels through the Canal now require twenty years of training and experience. Panama does not have such qualified people. At present, only two out of the two hundred ships' captains are Pana- manians. Until recently, no school even existed in Panama to train ship's captains and the country has virtually no navy. Nonetheless, the treaty requires that Panama assume control of an increasingly large portion of the skilled jobs in the operation of the Canal. To make matters worse, the United States does not even have the option of building an alternative Canal if the proposed arrangement with Panama does work out in practice. Under Article XII, the United States is prohibited from negotiating "with third states for the right to construct an interoceanic canal . . . in the Western hemisphere" without the consent of the Panamanian government. Thus, regardless of how poorly this agreement may work out, Panama holds an absolute veto power over the United States pursuing an alternative route for the next 22 years. 5. Human rights The worst fears of the workers who now live in the Panama Canal Zone are fully realized under the terms of the proposed treaty. In all the discussion of al- leged grievances and rights of Panama, we have curiously ignored the rights of the American citizens who live in the Canal Zone. In the treaty, we consciously expand Torrijos' authoritarian rule to include the Zone without ever raising a question about the abysmal human rights record of this regime and its conse- quences for the Americans who live there. Under Article XI, section 2, Panama does permit the United States to continue to have the "primary right to exercise criminal jurisdiction over United States citizens employees" of the Canal, their dependents and other American military forces. But this protection is limited to only certain areas and. most importantly, lasts only for the transition period of thirty months. After this period of time, these people fall completely under Panamanian legal jurisdiction. The human rights question must be squarely faced. The Zonians have lived under the mantel of freedom provided by the United States in the Panama Canal Zone. Are they now to be abandoned? Simply in anticipation of the new agree- ment, many employees have already left the area and in a three year period this emigration could turn into a flood. One specific provision of the treaty reveals most conspicuously the rapid deteri- oration of the rights of Americans remaining in Panama. Under Article V, rather innocuously titled "Principle of Nonintervention," American nationals must "abstain from any political activity in the Republic of Panama as well as from any intervention in the internal affairs of the Republic of Panama." This re- quirement appears rather reasonable until one realizes that under the treaty the definition of I'anama includes the Canal Zone area where these people live and work. Naturally, the Republic of Panama will have the right to determine what constitutes intervention and thus the definition could easily be broadly construed to include even union activities and ordinary grievance procedures, or any kind of public or private meetings even in one's own home. 363 4. Security guarantees Presumably, to protect the United States' vital security interests, a separate treaty provides for the permanent neutrality of the Canal. Thus far, this entire section has been enveloped in a conflict of interpretations between American and Panamanian negotiators. If disputes have arisen before the agreement is even ratified, this certainly bodes ill for its prospective implementation. In the discussion thus far concerning American rights under the Permanent Neutrality Treaty, the Panamanians have made a much more convincing case for their position. Rather than a genuinely joint declaration, the Panamanians have insisted that since the main treaty acknowledges their sovereignty over the Canal, they alone can declare the neutrality of the waterway. And, under Article I for the second treaty, the language indicates only that "The Republic of Panama de- cleares that the Canal . . . shall be permanently neutral." Thus, if Panama alone can declare neutrality, then unless other specific language indicates otherwise, the United States has no right under the treaty to proclaim unilaterally a threat to that neutrality and intervene to thwart such a threat. In testimony before this Committee last week, Article IV of the neutrality treaty has been cited as a basis for the American right of intervention. This ar- ticle does allude to both the United States and Panama agreeing "to maintain the regime of neutrality established under this Treaty." The last four w^ords of this quote clearly mean the kind of neutrality that Panama has declared already in the treaty and not an American right to determine this. Thus, it is entirely un- eople. This compares with a total of 18,879 people with diplomatic immunity in the Washington, D.C. area, with a population of 3 million. If this treaty is ratified, the U.S. will become a co-conspirator to deny these employees the civil rights they deserve as Americans. Do our diplomats think that they are the only ones who need privileges and immunities while living in a repressive society? QUESTION XO. 8 : OUR POSITION IX THE WORLD It is often said that all of Latin America is demanding that we give back the Canal Zone to Panama, But the available evidence is rather scanty. Panama's immediate neighbors, and those Latin American countries given to Marxism, socialism, and expropriation of American investments have found the issue one more excuse to denounce the gringos. But I have been in several Latin American countries — some of the largest and most important ones in South America. I have talked to Presidents, Foreign Ministers, and Joint Chiefs of Staff. Without exception they all told me that they were deeply disturbed by the thought of the Canal going to Panama, not only for their economic interests, but because of Torrijos' Marxist leanings. They have told other of our colleagues the same thing. They are all disturbed by the lack of leadership and our apparent surrender of important international interests to a weak country. If we are so concerned about Latin America, why have we not consulted the Inter-American Defense Board with regard to this treaty? The lADB is the only independent multilateral organization concerned with the defense of the Western Hemisphere. It was organized in 1942. Would it not be wise to consult with Latin American defense experts before changing the status of a strategic defense installation? QUESTION NO. 9 : THE BY-PASSING OF THE ROLE OF CONGRESS The final question relates to the State Department's handling of the treaty negotiations. We have a situation where the overwhelming majority of the Ameri- can people are opposed to giving away the Panama Canal. It has also been clear that substantial portions of both houses of Congress are opposed and have been opposed. Yet instead of dealing honestly with the problem, the State Department has taken the position that Congress can be bypassed. Would it not have been better, given the political problem, for the State Department to have worked through Congress, rather than by-pass Congress? For example, on the Article IV, Section 3 issue, why did not the State Depart- ment go the last mile and seek Congressional authority to dispose of the Canal Zone, instead of denying that authority was needed? For example, why wasn't the Kissinger-Tack agreement submitted to Congress as a joint resolution? It would have required only a majority vote, and the negotiators would have had a clear mandate. Why is the Administration now stating that the House of Repre- sentatives need not play a role? Why is Panama being paid benefits out of tolls, by-passing the appropriations process? Why are major military and economic benefits being funnelled through military credits and loan guarantees, by-passing the authorization process? These techniques are not calculated to reassure the American people. They will continue to ask questions and to demand answers. [From the Congressional Record, Oct. 6, 1977— S16599] Panama Caxal Treaty Mr. Thurmo^-d. Mr. President, on October 4, I inserted in the Record a State Department cable \Yhich corroborated my earlier testimonj- on the numerous differences in the Panamanian and U.S. interpretation of treaty provisions. Today, I would like to call attention to an article appearing in the October a, 1077, edition of The Washington Post entitled, '"Canal Treaties Get a Jolt." reported by John M. Goshko. and also an article appearing in the October o, 1977, edition of the New York Times entitled, "Dole Says U.S. Cable Shows Dif- ferences With Panama on Treaties," reported by Graham Hovey. I ask unanimous consent that these articles be printed in the Record. There being no objection, the articles were ordered to be printed in the Record, as follows : [From the Washington Post, Oct. 5, 1977] U.S., PAXA:\rA Differences Cited : Canal Treaties Get a Jolt (By John M. Goshko) Tlie campaign to win Senate approval of the Panama Canal treaties was given a severe jolt yesterday by disclosure of a document indicating that Panama does not recognize U.S. claims to future military rights in the canal. A ccmfidential State Department cable made public by Sen. Bob Dole (R.-Kan.) revealed what appear to be major differences in U.S. and Panamanian interpreta- tions of the treaties' provisions for defending the canal. These provisions refer to the period after the year 2000. when the treaties would transfer control of the canal to Panama. At issue are questions of whether the United States will have the right to intervene militarily against threats to the canal and a right of priority passage for U.S. warships in time of national emergency. These questions have become crucial to the Carter administration's quest for the G7 votes — two-thirds of the Senate — necessary to get the pacts approved by that badly divided body. Several uncommitted senators have said their votes will depend on whether they are convinced that the treaties secure these rights for the United States. In testimony last week before the Senate Foreign Relations Committee, Sec- retary of State Cyrus R. Vance and the two U.S. treaty negotiators, Ellsworth Bunker and Sol M. Linowitz, said repeatedly that these rights are safeguarded by the language of the treaties. Specifically they said that treaty language pledging the United States and Panama "to maintain the regime of neutrality" over the canal gives Washington a permanent right of intervention if it considers the canal threatened. They also asserted that the provisions calling for "expeditions passage" for T\S. vessels in wartime mean that American ships would "go to the head of the line." The U.S. interpretation of these provisions was fully understood by the Panamanian government, they added. However, their testimony seemed to be contradicted by the cable released by Dole. It was a message sent to the State Department last week by Ray Gon- zalez, deputy chief of the U.S. embassy in Panama. It reported a conversation between the embassy's political counselor and Carlos Lopez Guevara, one of the Panamanian treaty negotiators. The cable describes Lopez Guevara as being disturbed by Vance's testimony about U.S. intervention rights, and quotes him as saying : "Intervention is simply forbidden by international law. Panama cannot agree to the right of the United States to intervene." Lopez Guevara also is quoted in the cable as taking exception to statements by Vance and other U.S. officials that Panama's military ruler, Gen. Omar Torrijos, tacitly recognized U.S. intervention rights when he said at the treaty-signing (379) 380 ceremonies that the agreements could place Panama under the defense umbrella of the Pentagon. The cable quoted Lopez Guevara as saying that U.S. officials "had made too much of Gen. Torrijos' statement . . . 'Th.e general was stating a fact not giving the United States any right to intervene.' " On the question of what the "expeditious passage" clause means, the cable said Lopez Guevara disagreed that it allows U.S. ships to "go to the head of the line." He is quoted as saying that Panama tentatively had accepted the idea of preferential treatment for U.S. vessels early in the negotiations, but later had rejected it specifically in favor of the word "exiieditioiis." The cable concluded by warning Washington : "We are likely to be faced vrith increasing irritation over — and perhaps public disavowals of — our interpreta- tions. Any assertion which seems to claim a right to intervene in Panama's do- mestic affairs is almost certain to be challenged here." That referred to the fact that the treaties have extremely sensitive domestic political implications in Panama as well as in the United States. State De- partment officials say privately that the language of the neutrality clause and other touchy points were deliberately left vague by both sides to protect the Torrijos regime from charges within Panama that it had surrendered too much to the United States. However, that has also enabled the treaties' foes in the United States to seize on these ambiguities. In hammering at this theme, the American critics have been aided by state- ments of high Panamanian officials — of which Lopez Guevara's remarks are the latest example — that appear to contradict Vance's assurances directly. That prompted several senators to warn Vance that the treaties' chances of getting past the Senate would be jeopardized unless the divergences in interpreta- tion are clarified. Several said yesterday that the Lopez Guevara statements are further proof of the need to establish that Panama's understanding of the treaties conforms to that stated by the Carter administration. That, some senators suggested, could be done by a public statement from the Torrijos government or by the Senate attaching legally binding amendments or reservations to the treaty. Although they have promised to seek clarification. State Department officials privately express unhappiness about both ideas. Torrijos, they note, would find it very difficult from a domestic political standpoint to come out publicly in agreement with the U.S. interpretations; and any amending of the treaties by the Senate would require reopening the negotiations to obtain Panama's consent. The State Department confirmed the existence of the cable, and issued a statement saying "We are assessing the effects of all these statements in the light of the treaty language and a statement of Gen. Omar Torrijos when the treaties were signed on Sept. 7, with the view to determining whether further clarification may be required." [From the New York Times, Oct. 5, 1977] Dole Says U.S. Cable Shows Differexces With Panama ox Treaties (By Graham Hovey) Washington, Oct. 4.— Senator Robert Dole, Republican of Kansas, made public today a confidential State Department cable.srram that he said demon- strated "vast differences of interpretation" between the United States and Pan- ama on key points in the new canal treaties. The cablegram, sent from the American Embassy in Panama last Thursday, re- ported that one of Panamas' negotiators took sharp exception to the Carter Administration's interpretations of the right of the United States to help defend the canal after 1999 and of the "'expeditious" passage through the waterway that would be guaranteed to American and Panamanian warships. Secretary of State Cyrus R, Vance and other officials, including military lead- ers, have told the Senate Foreign Relations Committee that under the separate neutrality treaty the United States could do whatever might be necessary to in- sure access to the canal and its neutrality indefinitely. They have testified that the "expeditious" passage guaranteed in that treaty meant that United States warships could when necessary "go to the head of the line" for transit of the waterway. According to the cablegram made public by Senator Dole, an opponent of the treaties "in their present forms." Carlos Lopez Guevara, a veteran Panamanian negotiator, took issue with the head-of-the-line thesis, insisting that expeditious passage did not mean "preferential" transit, which he said the American side had originally demanded. Mr. Lopez also said, according to the cablegram, that American officials should stop using the term "intervention" to describe this country's rights under the neutrality treaty. "Intervention is simply forbidden by international law," he was quoted as having said. "Panama cannot agree to the right of the U.S. to intervene." When Brig. Gen. Omar Torrijos Herrera, Panama's Chief of Government, said at the signing of the treaties in Washington Sept. 7 that the neutrality pact left Panama "under the Pentagon's defense umbrella," he was "stating a fact, not giving the U.S. the right to intervene," said Mr. Lopez, according to the cable- gram. Administration witnesses at the Senate Foreign Relations Committee hearings have repeatedly quoted General Torrijos's statement as confirmation of their claim that under the treaty the United States could always act to protect the neutrality of the canal. State Department specialists said today they believed Mr. Lopez had meant only to draw a distinction between the right to intervene in Panama's internal affairs, which Washington does not claim, and action to defend the canal's neutrality and accessibility. "This is a negotiated treaty," an official said. "There is an obvious differ- ence in approach to the same set of words. But I think this is natural and not fatal, and I believe the differences will promptly be narrowed." But Senator Dole, who did not disclose how he obtained the secret cablegram, said Mr. Lopez's interpretations meant that the Senate "must clarify our defense rights by amendment, not by w^eak 'understandings' that have no legal and bind- ing effect." The Kansan, who was the Republican Vice Presidential candidate in 1976, will introduce six amendments and two reservations to the treaties when he testifies tomorrow at the sixth day of hearings by the Foreign Relations Committee. Administration officials have warned that although "understandings" of treaty clauses, attached by the Senate to the instruments of ratification, might be accept- able, amendments or formal reservations would require reopening negotiations with Panama. (381) 382 Mr. Dole's disclosure somewhat overshadowed the fifth day of hearings, which were marked by heated exchanges about the integrity of Gen. George S. Brown, Chairman of the Joint Chiefs of Staff. Senator Strom Thurmond, Republican of South Carolina, leader of a coalition opposing the treaties, said General Brown and the other service chiefs, who have strongly endorsed the Panama treaties, were "under the gun," with tlieir careers at stake, and would be inclined to go along with the President whatever their personal opinions of the pacts. Senator Paul S. Sarbanes, Democrat of Maryland, a member of the Commit- tee, said with some heat that this constituted a denigration of the Joint Chiefs and an attack on the integrity of the opinion expressed by General Brown before the committee. It was "not a contribution to the debate," Mr. Sarbane-S said. [From the Congressional Record, Oct. G, 1977 — S1G607] The Panama Canal Mr. McGovERN. Mr. President, we have already read and heard a great deal of iniblie comment on the proposed new Panama Canal Treaty. Certainly there will be more to come. The issue is both controversial and emotional. Regardless of the position we take, every Member of the Senate will be obliged to weigh his posi- tion carefully and to provide detailed answers to his constituents. In that context, I think my colleagues might find useful a brief response writ- ten by Lawrence Brown, editor of the Nation's Center News, published in Buffalo, S. Dak., to a reader who wanted to enlist Mr. Brown and the New^s in the effort to prevent the giveaway of the Panama Canal. This is not one of the best known newspapers in the country, and Mr. Brown, who is in the sheepherding as well as in the news business, makes no claim to be- ing an authority on the subject. He does, however, make one argument that I liave not seen explained so lucidly or sensibly in all of the other commentary and official documentation I have seen on the subject. He writes : * * neither Panama, Russia nor any other country have any plans to move the canal to any other part of the world. So it is quite apt to remain where it is, and we still have the option to negotiate or fight our way through it regardless of whether we keep title or not." Mr, Brown then suggests that there just might be several more important issues on which South Dakotans could better spend our energies and talents. Because I think it will be helpful to my colleagues both in reaching a judgment on the Panama Canal issue and in explaining their positions. I ask unanimous consent that this exchange — both the reader's letter and the Nation's Center News response — be printed in the Record. There being no objection, the letter was ordered to be printed in the Record, as follows : [From the Nation's Center News, Sept. 16, 1977] Letters to the Editor Dear Lawrexce. I am writing concerning the proposed "give away" of the Pan- ama Canal to which I am totally opposed. To ratify this treaty the administration is going to need a majority vote in the U.S. Senate. Our two Senators must hear our voices regarding this insane abandonment of U.S. property. For this reason I am urging you to join me in the Citizen's Committee to Save OUR Canal. Our initial objective is to obtain signatures opposing the ratification of this treaty. I am enclosing for your effort, a petition to our Senators which I hope you will circulate in your area immediately and return it to me as soon as pos- sible. Also. \(m will find enclosed some facts that will explain my concern over the Canal s "give away." If you should want more information or need additional petitions please contact me immediately at the above number. Lawrence, the message we have simpiy got to get to those people in Washington is that regarding our canal, "we bought it, we paid for it, we built it, and we damned well intend to keep it." Let me hear from you soon ! Your friend in the cause of freedom. Dale Bell, Box 315, Tinton Rd., Spearfish, S.D. 57783. P.S. Lawrence, any amount of financial assistance you or any of the petition signers could help us out with will be most appreciated. Dear Dale, for the past 3 or 4 months there has been an article on one side or the other of this Panama thing in nearly every paper you pick up. I have never been to Panama and have no particular hankering to go now, so I'm certainly not an authority on the subject. But from what I have read, it appears to me that Panama is like an ole hound dog that u>^ed to catch rabbits but now, only wants to eat and bite at the fellow (383) 384 that owns it. If we give it away we haven't lost much, and if we keep it, we can expect more problems than dividends. The big new cargo ships can't go through the canal and its foreign trade im- portance to us has declined to 1 percent of our gross national product. Our own East Coast-West Coast trade is about 7 percent, and it is not a big strategic thing to our 2-ocean navy. Besides that neither Panama, Russia nor any other country have any plans to move the canal to any other part of the world. So it is quite apt to remain where it is, and we still have the option to negotiate or fight our way through it regard- less of whether we keep title or not. South Dakota and agriculture across the nation has an economic and strategic problem 10 times as big as Panama, and if we have time and desire to raise money and circulate petitions we should be working for our bread, butter and future. The nation has an energy shortage. American agriculture has a grain surplus that could easily be converted to energy via grain alcohol. What better food bank could this country have than maximum ag production with the surpluses going to alleviate as much of world hunger as the world is willing to pay for, and the balance going to alleviate our independence on overseas oil? Dale, in reply to your last paragraph I say, "To Plell with Panama. Let's do something for the industry that feeds this country the best and cheapest in the history of humanity and has the added ability to solve part of our energy prob- lem and serve some of mankind in other parts of the world." [From the Congressional Record, Oct. 7, 1977 — S16618] The Panama Canal Treaties Mr. Harry F. Byrd, Jr. Mr. President, the Senate has now begun hearings on the proposed Panama Canal Treaties and, Members of the Senate are hard at work studying the texts of the treaties and familiarizing themselves fully with the issues involved. Although the Senate will not vote on the treaties for several months, this kind of detailed and lengthy preparation is very important because the Panama Canal issue is closely tied to the economic and security interests of our Nation. The primary focus of Senate attention should be on the actual terms of the trea- ties and whether they provide adequate protection for U.S. interests. However, there is one issue outside of the terms of the treaties which should also be fully considered by the Senate — and that is the manner in which the trea- ties were negotiated. The negotiations leading to those treaties actually began in January of 1965 after serious riots in Panama against the U.S. presence in the Canal Zone. Ever since that time, negotiations have taken place under the cloud of renewed violence, and every administration since then has cited the prospect of violence as a reason for negotiating a new treaty which would give control of the canal to Panama. The Carter administration has relied heavily on this argument in Its efforts to achieve Senate ratification of the proposed canal treaties. Just last week in testimony before the Senate Foreign Relations Committee on behalf of the treaties U.S. negotiator Sol M. Linowitz used phrases such as "smol- dering dispute" and "troubling and festering presence" to describe the situation under the existing treaty. Mr. Linowitz said : "The simple fact is that if we do not agree upon treaties which are mutually agreeable and acceptable, the time may come when we may find ourselves in the position of having to defend the Canal by force against a hostile population and in the face of widespread condemnation by the countries of Latin America and even the rest of the world." These same kinds of arguments were made by earlier administrations. President Johnson, in fact, used the argument of impending violence extensively in seeking congressional support for draft canal treaties which were negotiated in 1967. Many Members of Congress were unimpressed with President Johnson's argu- ment and felt, instead, that the President was submitting our Nation to Panama- nian blackmail. Congressional opposition prevented those draft treaties from ever being submitted to the Senate for consideration. Now, with the completion of new treaties this year, charges are again being made that the United States has negotiated under duress and that the United States is responding to "blackmail." The Carter administration denies this stating that "the United States has not responded to pressure." Recently, this denial was echoed by a Member of the Senate who said there was no connection between the Government of Panama and threats of violence. In fact, he said that the specter of violence was "raised not by responsible Panamanians but by Americans." That Senator went so far as to say that Presi- dent Omar Torrijos had "specifically rejected violence." What are the facts? General Torrijos, the Panamanian dictator, as recently as May 7 of this year, was quoted in the Panamanian newspaper Matutino as saying that if peaceful efforts to reach an agreement fail, Panama has other nonpeaceful alternatives. On that same day the EFE wire service quoted General Torrijos as saying that if the negotiations do not succeed. North Americans in the Canal Zone will find themselves "without water, without light, and without a canal." One year earlier, on March 7, 1976, General Torrijos in an interview on Colom- (385) 386 biaii radio warued that the Panamanians "would have to resort to the violent stage"' if the treaty negotiations fail. The Panamanian dictator was quoted in May 30, 1976, Los Angeles Times as saying : "We are also prepared to follow the Ho Chi Minh route if necessary. That means terrorism, guerrilla operations and sabotage in a national liberation war to regain our territory." Going a step further, Torrijos said in a November 1975 interview in the Atlas World Press Review : "I told them (the Panamanian students) that if there were an uprising, if there were terrorism, I as commander of the National Guard would have two options : to crush them or lead them, and I can't crush them." Thus, by rejecting the alternatives of crushing an uprising, Mr. Torrijos was announcing his candidacy to lead one. These kinds of threats were uttered during the course of recent negotiations by other Panamanian officials as well. The Panamanian Ambassador to the United States, Nicolas Gonzales-Revilla, in an interview in the April 1977 edition of the American Legion magazine stated that — "It is a fact that the U.S. presence makes sabotage and violence inevitable." Even Panama's chief negotiator Romulo Escobar Bethancourt raised the spec- ter of violence in a speech before the Panamanian Assembly just 1 month ago. He said that if the U.S. Congi-ess does not ratify the treaties "this country will take another course. This country will take a course of violence. The threat of violence now seems to be the major argument of treaty propo- nents in the attempt to achieve Senate ratification of the treaties. These threats have come from Panamanian officials and they are being fer- vently repeated by treaty advocates in an effort to win Senate ratification. The American people should be aware of this. Without the si>ecter of violence, is it likely that the United States would ever have to come to the point that its negotiators would be willing to accept a treaty which gives away so much? Over the years, Panama has repeatedly pressured for changes in the 1903 treaty, but the United States maintained that it would not surrender its rights as conferred by the 1903 treaty. In 1923, when faced with Panamanian agitation for renegotiation Secretary of State Charles Evans Hughes stated to Panamanian officials that — "It was an absolute futility * * * to expect any American administration, no matter what it was, any President or any Secretary of State ever to surrender any part of these rights which the United States had acquired under the Treaty of 1903." Apparently Secretary Hughes did not foresee the give away philosophy now so prevalent in our Government. In the 1950's, the United States started making significant concessions to Panamanian demands. Now. just a few years later, we have come all the way to a draft treaty which relinquishes all of the United States rights acquired under the 1903 treaty and replaces them with very limited U.S. rights of a limited duration. Mr. President, the Senate must make a decision with regard to the treaties whicli have been submited by the President. That decision should be based primarily on the content of the treaties and an a.ssessment of how well they guard the interests of the United States. However, the Senate should not ignore the circumstances which have sur- rounded the treaty negotiations and should not be swayed by treaty advocate raising the specter of violence as a reason for approving the treaties. Furtliermore. the emphasis on threatened violence shows the real weakness of other arguments being advanced in favor of the treaties. I say that making concessions under threats of violence will only lead to more threats and more concessions — not just in Panama, but around the world. Mr. President, how much time do I have remaining? T'he Acting President pro tempore. The Senator has 3 minutes remaining. Mr. Harry F. Byrd, Jr. I yield back the remainder of my time. The Acting President pro tempore. The Senator from Virginia yields back liis time. Mr. Robert C. Byrd. Mr. President, Mr. Allen, I believe, has an order for 10 minutes. The Acting President pro tempore. That is correct. Mr. Robert C. Byrd. I ask unanimous consent that I may be allotted that time. The Acting President pro tempore. Without objection, it is so ordered. [From the Congressional Record, Oct. 7, 1977 — S1671S] The Panama Canal Treaty Should Be Amended or Withdrawn Mr. Dole. Mr. President, the morning papers carry a report tliat the State Department is seeking clarification of Panama Canal Treaty provisions from Panamanian officials. They are looking for public reassurances that the United States will have recognized defense rights under the treaty on permanent neutral- ity, and that we will have the right to priority passage during periods of crisis. It seems they finally woke up to the fact that the Senate is not prepared to ratify this treaty so long as these rights are ambiguous. ASSURANCES NOT ENOUGH But the Senate will not settle for verbal assurance on our defense rights under the treaty. We do not want pacifiers, we want protection. The treaty is a con- tract. And the only way to clarify a contract is to make its language as clear and precise as possible. I have followed the established procedure for doing this, in introducing amend- ments and reservations to an ambiguous treaty. However, if the State Depart- ment is unwilling to accept the idea of congressional modification, maybe they should withdraw the treaty now, renegotiate with the Panamanians, and then resubmit the document to Congress. It is specially troubling to me to think that if the State Department cable re- vealing serious disagreements between the United States and Panama over the meaning of the treaties had not been revealed, the Senate might have proceeded to ratify an agreement seriously damaging to U.S. security and economic inter- ests. We would have done so, ignorant of vital information hidden under a State Department security blanket. The State Department says it is maintaining a continuing dialog with Panama to seek clarification of differing interpretations of treaty provisions. While the department is looking for reassurances on U.S. rights to defend the canal and to gain priority passage through the canal, Panamanian statements to this effect will probably not be forthcoming until after the October 23 plebiscite in Panama. I have no doubt that words of reassurance will flow fast and free after the Panamanian vote is over. But that will not explain away the understandings that top Panamanian officials are attaching to the treaties today. If they say one thing now, and another next month, how can we place confidence in their verbal assurances? The proper course now is congressional modification. If the administration cannot accept this, then they should take the initiative and go back to the ne- gotiating table now. ( 387 ) [From the Congressional Record, Oct. 7, 1977 — S16729] Switch in Panama Canal Position of U.S. Shipping Mr. Thurmond. Mr. President, almost unnoticed in the Panama Canal debate has been the switch from a position of "yes" to a position of "no" on the Panama Canal Treaty by the influential Liner Council of the American Institute of Mer- chant Shipping. Mr. W. J. Amoss, Jr., a chairman of the council and president of Lykes Broth- ers Steamship Co., stated recently the proposed increased toll costs embodied by the treaty spell "sheer disaster for operators east of the canal." He is speaking of trade from Eastern seaboard States such as New England States, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North and South Caro- lina, Georgia, and Florida. Mr. Amoss explained that the higher toll costs envisioned to support payments to Panama would result in diversion of some shipping with the ultimate costs being passed on to the American consumer. He stated that shippers simply could not handle another 25 percent increase in canal tolls on top of the 45-percent increases added in the past 3 years. Mr. President, this is an important statement and deserves attention by the Congress. I ask unanimous consent that an article entitled "Canal Toll Plan Sours Lykes Chief" which appeared in the September 20, 1977, issue of the Journal of Commerce be printed in the Record. There being no objection, the article was ordered to be printed in the Record, as follows : Canal Toll Plan Sours Lykes Chief — Support fob Pact Dropped Because OF Toll Increase (By Anita Schrodt) New Orleans — ^A major U.S. steamship oflScial has withdrawn his earlier en- dorsement of the new Panama Canal Treaty and is now opposing it after learn- ing a 25 to 30 per cent toll increase is expected to be imposed immediately under the new treaty. W. J. AmoSvS. Jr.. president of Lykes Bros. Steamship Co. here, expressed his opposition to the treaty at a meeting here recently with Deputy Under Secretary of Commerce Anne Wexler. "I told her she could expect massive commercial resistance to passing the cost of diplomacy to canal users," Mr. Amoss told The Journal of Commerce. Mr. Amoss made it clear he spoke not only as Lykes president but also as chairman of the Liner Council for American-Flag Shipping (CASO), which the AIMS Liner Council is forming independently. Last Tuesday, based on an AIMS study which projected the treaty could be implemented without increasing canal tolls, Mr. Amoss publicly expressed his support of the treaty. However, upon receiving new communication from AIMS' Washington staff on Wednesday, Mr. Amoss reassessed his position. could be tolerated "We have leanied that negotiators, using as a basis a 19G9 study by Stanford Research, informed the governor of the Panama Canal Co. that an immediate toll rate increase of 25 per cent could be tolerated and would be invoked as soon as the new Panama Canal Commission contemplated by the treaty was estab- lislied, Mr. Amoss said. Further, the letter from AIMS President James Reynolds also informed Mr. Amoss of Sept. 8 testimony before the House International Relations Committee by Sol Linowitz, one of the treaty negotiators, that an in- crease of 25 to 30 percent in tolls would probably be necessary to meet the costs of the new treaty. "Commercial interests that use the canal, having already had a 45 percent in- crease in tolls in the last three years, topped off with reai-rangements of methods of billing that resulted in further increases, simply cannot accept another in- crease in tolls," he said. (388 ) 389 RECENT DEVELOPMENT '•The projection that another increase could be tolerated completely ignored recent developments brought by intermodalism and mini-landbridge," Mr. Amoss said, pointing out cargo now has an alternative route. "I told her it spelled sheer disaster for operators east of tlie canal and going westbound through the canal," he said, adding that "commercial interests would oppose adoption of the treaty if it would mean an increase in tolls to implement it." The treaty requires 30 cents on the dollar per canal net ton (with the current rate at $1.29 per canal net ton) be paid to Panama: that $10 million annual for services go to Panama and another $10 million annually go to the Canal Commission. Further, once those payments and the operating costs of the canal company are deducted, any excess yields in tolls up to $10 million are to be paid to Panama annually. TWO VITAL FACTORS Mr. Amoss said the AIMS study upon which he based his original support of the treaty could only guess at two vital factors — the operating costs of the canal company and the impact of Alaskan oil ships transitting the canal. "Apparently, the negotiators were more informed on these issues," he said. Lykes has already found it cheaper to divert three ships this year on their outbound New Orleans- Singapore voyage from the traditional canal transit to the Suez Canal and around Cape Horn. According to Mr. Amoss. the New Orleans-Singapore run via Panama totals 11,932 miles; via Suez, 11,517 miles; and via the Cape of Good Hope, 12,921 miles, or about 2 and one-quarter days longer than through Panama. "The only drawback to the Suez is the war risk insurance feature, which is an additional expense. But it still turned out cheaper," Mr. Amoss said. "Such a diversion away from the canal is not yet economically feasible on Far East runs which include northern x)orts such as Hong Kong or Tokyo," he said. 114 TRANSITS Last year, Lykes made 114 transits through the Panama Canal. Currently,, it is costing Lykes about $14,500 one-way through the canal with its Gulf Pacer class ships which serve the Far East trade. Mr. Amoss projected the cost for a one-way transit for a barge-carrying Seabee, comparable in size to a LASH barge ship or containership, would be about $30,000. Panama Canal tolls went up 19.5 percent in 1974 and another 19.7 percent in 1976. In addition, in 1974, additional ship space was judged to be susceptible to per-tou revenues. According to ]\Ir. Amoss, that increase represented about a 5 percent increase in tolls. "If you put it all together, the increase really comes to a total 52 percent right now, compared to 1973," he said. "The Panama Canal net ton is a space measurement approximately equal to ftbout 100 cubic feet of enclosed ship space." he added. Also at the meeting vrith Ms. Wexler Friday were Capt. J. ^Y. Clark, president of Delta Steamship Co. ; Edward S. Reed, director of the Port of New Orleans ; C. M. Keeney, president of Equitable Shipyards (which moves its products through the canal) ; Charles Richardson, vice president of the Marine Engineers Beneficial Association in the Gulf ; and C. Buck Hammond, president of Unit Rig. Inc. of Tulsa, manufacturer of mining machinery. COMMERCIAL ASPECTS "We all expressed our concern about the commercial aspects of increasing tolls and said we hoped some arrangement could be made whereby there would not be a toll increase," Capt. Clark told The Journal of Commerce. Although Delta does not presently transit the canal, it has in the past and is presently negotiating to purchase Prudential Lines' U.S. West Coast-South American service which does use the canal. Mr. Reed, who said the board of commissioners of the port would formally consider the treaty at a meeting Thurs- day, said he was concerned that the treaty contained no indication of controls over rates and charges of the canal. Noting that much of the U.S. grain is exported through the New Orleans area and much through the canal, with competitive pricing, he added : "Since grain exports are the U.S.'s best source of balance of payments loans, I think it is incumbent upon the Federal Government to closely scrutinize the possible effects of canal toll increases on the farm commodities exported from the U.S." [From the Congressional Record, Oct. 7, 1977 — S1G756] AXOTIIER PaXAMAXIAX NEGOTIATOR DeXIES U.S. IXTERVEXTIOX RiOIITS UXDER Treaty Mr. Dole. Mr. President, another Panamanian Treaty negotiator has spol^en ont to deny any U.S. rights of military intervention under the proposed Treaty on Permanent Neutrality for the Panama Canal. According to the Foreign Broadcast Information Service, Panamanian nego- tiator Diogenes de la Rosa said in Venezuela on October 6 that the United States will not have the right to intervene militarily in Panama when control of the canal passes to the Panamanians after 1990. Whether or not his com- ments are directed at U.S. rights to intervene militarily on behalf of the canal's neutrality is unclear from this report. However, the negotiator's remarks would certainly raise a question on that point. As such, it is still another in a series of public statements by Panamanian officials that focuses doubt on just what our rights under section IV of the Permanent Neutrality Treaty are supposed to be, and just how they are to be correctly interpreted. It is still another reason why language in this provision must be clarified, in order to assure our right to protect the canal. Mr. President. I aower to dispose of U.S. territory and property, then he has no authority whatsoever to dispose of the canal without action by both Houses of Congress. (391) 99-592— 7S 26 392 Second. If the Court rules that the President does have concurrent authority with Congress to dispose of U.S. territory and property, hut that Congress has already preempted the field, tlien he has no authority to repeal existing territorial legislation by treaty. The proposed Panama Canal treaty eliminates the Canal Zone Code and the U.S. District Court at Balboa. Third. Similarly, even if the President does have concurrent authority, he can- not exercise that authority in such a way so as to deprive U.S. citizens of their constitutional and statutory rights. A long line of court decisions have established that the President cannot exercise his foreign relations power to deprive U.S. citizens of their civil rights. Citizens now living in the Canal Zone v»'ould find their legal jurisdiction transferred to Panama, and they would lose their con- stitutional protections and the safeguards established by Congress for their benefit. Mr. President, I ask unanimous consent that the complaint of the plaintiffs and the motion for leave to file complaint by the States be printed in the Record. There being no objection, the material was ordered to be printed in the Record. as follows : [In the Supreme Court of the United States, No. — , Orig.l Jesse A. Helms, James A. McClure. Strom Thurmond, Orrin G. Hatch, Daniel J. Flood; State of Idaho, State of Iowa, State of Louisiana, State of Nebraska : William R. Drummond, and Theodore L. Sendak, Plaintiffs, v. Cyrus R. Vance and James E. Carter, Jr., Defendants CO:^rPLAINT Jurisdiction 1. The original jurisdiction of the Court is invoked under Art. Ill, Sec. 2, cl. 2 of the Constitution of the United States for declaratory relief authorized by Section 2201 of Title 28 of the United States Code. The suit prays for a ruling as to the exclusive authority of Congress to dispose of territory and property of the United States under Art. IV, Sec. 3. cl. 2 of the Constitution or, if such a right does not exist, a ruling that any concurrent disposal power lodged in the Executive branch as an implication from its acknowledged treaty power, (Art. II, Sec. 2, cl. 2) may not be so exercised by the President as to effect a repeal of existing territorial legislation or divest United States citizens residing in the Canal Zone of their recourse to Constitutional guarantees. Parties 2. Tlie States of Idaho, Iowa, Louisiana and Nebraska appear herein in their sovereign capacity and as representative of their citizens for the relief herein- after prayed, suing on their own behalf and for the benefit of all other States similarly situated. These four States are represented in Congress by eight Senators and eighteen Representatives. On information and belief they annually ship by water to other States and foreign destinations in excess of $10 billion in farm and manufactured products, a substantial proportion of which passes through the Panama Canal, subject to itia 'oils, 3. Plaintiffs Jesse A. Helms, James A. McClure. Strom Thurmond and Orrin G. Hatch are duly elected members of the Senate of the United States having their official residence in the District of Columbia. They sue on their own behalf and for the benefit of all Senators similarly situated. 4. Plaintiff Daniel J. Flood is a duly elected member of the House of Represent- atives of the United States, having his official residence in the District of Columbia. He sues on his own behalf and to preserve the voting rights of all members of the IIous->e of Representatives.* 5. Plaintiff William R. Drummond is a citizen and employee of the United States, is a resident of the Canal Zone, and President of Local 1798, American Federation of Government Employees, AFL-CIO. He sues herein as an individual and as representative of the class of all United States citizens having their per- manent residence in the Canal Zone. 0. Plaintiff Theodore L. Sendak is the Attorney General of the State of Indiana and has his official place of business at 219 State House, Indianapolis, Indiana. 1 On October 3, fifty-one other Representatives filed an action in the District Court for the District of Columbia for a similar declaration of their right of review. (Civ. No. 77-1733) 393 Pursuant to request of an Indiana Congressman and concurrent resolution of the Indiana legislature dated April 15, 1975, he sues under Indiana Code 4-6-1-6 to request prior Congressional authorization of any alienation of the Canal Zone. 7. Defendant Vance is the Secretary of State of the United States. He is the principal Executive Branch official charged with enforcement of the policies of the President in foreign affairs, and has supervis-ed negotiation of the proposed treaty with Panama, which defendants have submitted to the Senate for ratification. 8. The President is the head of the Executive branch and the responsible superior of Secretary Vance. By statute he exercises administrative and military control over the Canal Zone. The President possesses direct Constitutional au- thority as Commander-in-Chief of the Armed Forces of the United States and has the capability of authorizing unopposed Panamanian occupation of the Canal Zone at any time. THE CANAL ZONE 9. In June, 1902 an Act was approved (57th Cong. 1st Sess., Ch. 1302, Public No. 183, the "Spooner Act") whereby Congress authorized and directed the President to negotiate for the acquisition of a suitable strip of land across the Panamanian isthmus for the construction and operation of a transoceanic canal, the legislative requirement being that the agreement should provide perpetual control thereof under United States jurisdiction. 10. On November 18, 1903 the President, specifying that statute as his authority, entered into an agreement with the newly formed Republic of Panama (Isthmian Canal Convention, a/k/a the Hay-Bunau-Varilla Treaty, 33 Stat, at L. Pt. II, pp. 2234-2241) which included the stated Congressional requirements. The agree- ment was proclaimed on February 26, 1904. 11. In accordance therewith. Congress (a ) Appropriated from the Treasury and paid : $25 million to Colombia ; $10 million to the Republic of Panama ; $40 million to a French company which held the Canal concession ; $4 million compensation to individual land holders of the Zone; and $56 million in subsequent annuity payments to the Republic of Panama. (b) Expended in excess of $1.5 billion for construction and maintenance of Canal and Zone facilities. (c) Enacted legislation for the governance of the Zone, including the establish- ment of a judicial system, a bill of rights, and civil and criminal codes to be applied to resident United States citizens and nationals, (the Canal Zone Code, P.L. 87-845, 76 A Stat. 1, 48 U.S.C. §§ 1301 et seq.) (d) Created the Panama Canal Company (until 1950, the "Panama Railroad Company") to operate the canal, giving it "perpetual succession in its corporate name, unless dissolved by Act of Congress." ( 2 C.Z.C. § 61 ( b ) ) . ,(e) Directed the transfer of the Canal and its facilities to the Panama Canal Company (2 C.Z.C. § 73), which has since operated it. 12. Among the Courts so established by Congress is the United States District Court for the District of the Canal Zone (3 C.Z.C. § 10). It was made a part of the 5th Judicial Circuit (28 U.S.C. § 41) and this Court was given review juris- diction over its judgments (28 U.S.C. § 1252). The Court is presently without any judge and on information and belief no nomination of any judge has been made by the President. 13. On February 7, 1974 the then Secretary of State, Henry Kissinger, without legislative authorization, executed with Panama in the name of the United States a ''Joint Statement of Principles" pursuant to the terms of which the State De- partment promised to void the 1903 Convention, transfer the Canal and Zone properties to the Republic of Panama, and submit its re.sidents, including Amer- ican citizens, to the jurisdiction of the laws and courts of Panama. The current treaty proposal states that it is drawn in accordance with the 1974 statement. THE PROPOSED AGREEMENT WITH PANAMA 14. On September 7, 1977 the President signed an agreement to enter into a treaty with Panama which by its terms (a) Terminates the Isthmian Canal Convention of 1903, (b) Recognizes the Republic of Panama as territorial sovereign in the Zone, and grants it "plentary jurisdiction over the former Canal Zone". 394 (c) Dissolves "the Pannma Canal Company and the Canal Zone Government". (d) Transfers to Panama without charge "all right, title and interest the United States of America may have with respect to all real property, including non-removahle improvements thereon''. (e) Turns over the Canal to Panama '"in operating condition and free of liens and debts". (f) Grants to Panama "a fixed annnity of ten million United States dollars" plus an equal amount for services, plus a further 810 million if realized from Canal profits, plus .8(>/ton on all vessels transiting the Canal, (approx. .^43 mil- lion) or a total of approximately ."^TO million annually. (g) Extinguishes the jurisdiction of the United States District Court for the Canal Zone District and extends Panamanian civil and criminal jurisdiction over citizens of the Uniteil States resident in the Zone. 15. The proposed treaty is limited in time. Such time is referred to therein as a "transition period". It terminates on December 31, 1999 after which '"only the Republic of Panama shall operate the Canal and maintain military forces, de- fense sites and military installations within its national territory." IG. The described agreement between the United States and the Republic of Panama was submitted by defendants to the Senate for ratification as a treaty and on September 16. 1977 was referred by the Senate to its Committee on For- eign Relations (123 Cong. Rec. S. 15144) where it is presently pending. THE THREATEXED IXJURY 17. The proposed payment of approximately $70 million annually to the Re- public of Panama would result in an increase of more than 200% in the tolls now charged for the transit of goods shipped from the plaintiff States to the West Coast states and in their overseas trade and would thereby unreasonably in- crease the burden on such commerce. 18. Such an increase in tolls would not only cause a loss of trade to plantiff States, but would burden anticipated .shipments of oil from Alaskan or other Pacific sources to Eastern and Mississippi States, diminii^h the use of refineries now located in the South, and decrea.se the utilization of shipping facilities in seacoast ports, 19. Additionally, ratification of the said proposal as a treaty would deprive the plaintiff States of any consideration thereof by or vote thereon by their delega- tions in the House of Representatives and decrease the effective franchises of tlieir citizens. 20. The jdaintiff Senators would be injured by any ratification of the said pro- po.^al as a treaty in that they would thereby lose the benefit of any review by a Congressional conference committee and be deprived of its evaluation by the Senate Armed Services and Commerce Committees, which are resi)onsible bodies to evaluate Panama Canal legislation under Senate Rules 25.1(d) and (f). Further, the submission of the proposal in treaty form presents it as a moral com- mitment by the United States and the Senate consideration normally given to de- l)atable legislation would be diminished. 21. Under the Constitution (Art. IV, Sec. 3 cl. 2) Congress has an exclusive riglit to dispose of properties of the United States. By submission of the proposal in treaty form it will be considered only by the Senate and the plaintiff Repres^on- tativo ^ will be completely deprived of any opportunity to consider or vote on its terms. 22. Under the proposal as signed and submitted, plaintiff Drummond and all other citizens of the United States resident in the Canal Zone would, without a hearing, lose their Constitutional protections and their reliance on the bill of rights and civil and criminal laws enacted by the Congress for there benefit. 23. On behalf of the interests of the State of Indiana, plaintiff Theodore L. Sendak complain.s of the loss of votes to the delegation of that State in the House of Representatives and the consequent deprivation pro tanto of the franchise of Indiana citizens, the threatened burden on Indiana's commerce, and the adverse effect on the State's relative position in government which would result from any recognition of unreviewable property disposal powers in the Executive branch. Wlierefore. plaintiff's pray the Court to issue a judgment pursuant to 28 U.S.C. § 2201 declaring that 1. The Canal, the rights to the use of the Canal Zone and the improvements therein are properties of the United States ; 395 2. The CoDgress has au exclusive eoustitutional authority to direct their dis- position ; or 3. lu the event that the Executive possesses concurrent power under the treaty clause to dispose of such property, a further declaration that such authority may not be exercised (a) in contravention of existing legislation, or (b) so as to deprive citizens of the United States of their Constitutional and statutory recourse, Respectifully submitted, Wayne L. Kidwell, Attorney General of the State of Idaho. Richard C. Turner, Attorney General of the State of Iowa. William J. Guste, Jr., Attorney General of the State of Louisiana. Paul L. Douglas, Attorney General of the State of XehrasJca. Geo. S. Leonard, Attorney for the Individual Plaintiffs. October 13, 1977. f [In the Supreme Court of the United States, No. — , Orig.] State of Idaho, State of Iowa, State of Louisiana, State of Nebraska, Plaintiffs, v. Cyrus R. Vance, and James E. Carter, Jr., Defendants motion for leave to file an original complaint Pursuant to Rule 9 of the Rules of this Court and the annexed brief in support hereof, the States plaintiff invoke the Court's jurisdiction mider Art. Ill, Sec. 2, cl. 2 of the Constitution of the United States, and pray the Court's leave to file the attached complaints as an original action, upon the ground that the States which are parties to the suit appear herein in support of their sovereign interest to pre- serve their proportionate voice in Congress and avoid a threatened burden on their commerce. brief in support of motion for leave to file original complaint The issue Four States are parties plaintiff and allege an injury to themselves and to their citizens in a matter affecting their sovereign interest. Directly, and in their parens patriae capacity, they invoke this Court's original jurisdiction imder Art. Ill, Sec. 2, cl. 2 of the Constitution to pray a declaration that the federal oflScials named as defendants have exceeded tlie autliority of the executive branch of government to tJie injury of the States and their people by the threatened loss of the voles of their delegation in the House of Representatives and an unreasonably increased burden on their interstate and foreign commerce. Defendants have asserted the existence of an implied Constitutional foreign af- fairs authority (Art. II, Sec. 2, cl. 2) to alienate United States property, pur- suant to which they have executed and submitted to the Senate for ratification in the form of a treaty, a proposal wliich would dispose of the territorial rights and properties of the United States in the Canal Zone to tlie Republic of Panama and would cede civil and criminal jurisdiction over the United States citizens and na- tionals resident in the Zone from the courts established by Congress to the Pan- amanian courts.^ Plaintiffs in opposition claim that the Canal, the Canal Zone, its structures and the rights exercisable by the United States in the Zone are properties of the United States which may only be disi)osed of by the whole Congress under tlie authority of the property Clause, Art. IV. Sec. 3, cl. 2. Further, plaintiffs say that if in law tlie concurrent disposal powers claimed by the executive branch should exist, the many enactments of Congress previously approved by the executive for tlie gov- ernance of the Zone have forecloseeated in many cases. Golden v. Zivickler, 394 U.S. 103, 89 S. Ct. 956 (1969) Steffcl v. Thompson, 415 U.S. 452, 94 S.Ct. 1209 (1974), i2oe v. Wade, 410 U.S. 113. 125, 93 S.Ct. 705, 712 (1973), Aft&o« Laboratories v. Gardner, 387 U.S. 136, 148, 87 St.Ct. 1507, 1515 (1967), State of Florida v. Wei7il)erger, 492 F.2d 488 (5 Cir. 1974) and is concurred in by the writers, 3 Davis Adm. Law Tr. c. 21 (1958), Joffe Judicial Control of Administrative Action, C. 10 (1965). The question raised by the complaint is substantial in law. Apart from the property interest of the United States in the Canal, and supporting structures, housing areas, railroads, government buildings and the like, this Court in Wilson v. Shaw, 204 U.S. 24, 33, 27 S.Ct. 233, 235 (1907) held that the Zone is itself a possesvsion of the Ignited States, the 1903 treaty being described in 1948 as a lease '•extending until agreement for abrogation or unilateral abandonment by the United States", Vermilya-Broicn Co. v. Connell, 335 U.S. 337, 3S3-1, 69 S.Ct. 140, 144. Acc. U.S. v. Husband R. (Roach), 453 F.2d 1054 (5 Cir. 1971) cert. den. 396 U.S. 935 (1972), Lucas v. Lucas, 232 E.Supp. 466 (D.C.C.Z., 1964) Iluasteca Petro- leum. Co. V. United States, 14 F.2d 495, ( E.D.N. Y. 1926), 26 Op. A.G. 376 (1907). Starting at least with United States v. Fitzgerald, 40 U.S. 785, 15 Pet. 407. 421 (1841 ). it has many times been held that the power to dispose of property of the Ignited States is exclusively in the competence of Congress under the property clause, Osborne v. United States, 145 F.2d 892 (9 Cir. 1944) , Alabama v. Texas, 347 U.S. 272. 74 S.Ct. 481 (1951), Tugade v. Hoy. 265 F.2d 63 (9 Cir. 1959). The power so given to Congress is "unlimited". Sierra Club v. Hickel. 433 F.2d 24, 28 (9 Cir. 1970) aff'd. 405 U.S. 727, 92 S.Ct. 1361 (1972) and includes authority to prescribe the times, conditions, and mode of transfer and selection of the recipient Gibson v. Chontcau, 13 Wall. 92, 99 {1^12) , Irvine Y. Marshall, 20 How. 558 (1858) , Emblem V. Lincoln Land Co., 184 U.S. 660, 664, 22 S.Ct. 523, 525 (1902). As the allegations of the attached complaint show, the controversy is also sub- stanrital in a factual sense, in that it involves the rights of the United States in approximately three hundred and twenty-five square miles of land, title to im- provements whose replacement value is estimated to be in excess of three and a half billion dollars, the repeal by implication of the Canal Zone Code and other statutes which provide the laws for the Zone, the existence of its courts and the complex administrative organization which has heretofore been created by the Congress, and any Constitutional recourse by more than 3500 citizens resident in the Zone who will be involuntarily transferred to Panamanian jurisdiction. The issue also involves adverse legal interests in that question necessarily presents a choice between mutually incompatible interpretations of Constitu- tional authority by tlie branch of government represented by the parties plain- tiff and defendant. Plaintiffs assert an exclusive Constitutional disposal power in Congress. The defendants assert a concurrent Constitutional disposal power in the Executive, offering in principal support a summarization of authorities in an opinion of the current Attorney General, Op. A.G. , August 11, 1977^ to that effect. Of greater practical importance, however, to the question of adverse l(>gal interests, is that the agreement with Panama has now been signed by the President and has been sent to the Senate for ratification as a treaty. 3 Contra, 34 Op' A.G. 320, 322 (1924). 399 The final question is whether the current situation is also one of suflQeient immediacy and reality to warrant the issuance of a declaratory judgment at this time? Admittedly, three months ago it was judicially held that it was not. A prior action raised the same legal question in the United States District Court for the District of Columbia following President Carter's announcement that a treaty proposal to deliver the Canal and its citizenry to the Republic of Panama would be completed and presented to the Senate by June, 1977 ( Civ. No. 77-0083 ) . The District Court denied an injunction to maintain the status quo and dismissed the case without reaching the merits, holding that the action was premature, the nonstate plaintiffs lacked standing, and the issue was probably a political ques- tion. On appeal (Nos. 77-1226 and 77-1295) the District Court was affirmed on the stated ground that the matters presented were not ripe for consideration. On June 20, 1977, this Court declined review (No. 76-1576). The decisions of the lower courts are reprinted in that petition. The situation has now matured and the former areas of doubt have been re- solved by x>ublication of the proposed treaty language, (State Dept. Sel. Docs. Nos. 6, 6A, 6B). The signed agreement is now before the Senate for ratification, and that body has referred it to its Commitee on Foreign Relations for review (123 Cong. Rec. S. 15144. Sept. 16, 1977). The adverse positions of the parties have therefore been defined and the Senate is preparing to act on a treaty proposal which — if plaintiffs' contentions are valid — would be Constitutionally void regardless of ratification or rejection. Nor is it an objection to ripeness at this time that the proposed agreement does not become effective until six months after an exchange of ratifications. In a sim- ilar situation, as this Court pointed out in Buckley v. Valco, 424 U.S. 1, 96 S. Ct. 612 (1976), rii)eness exists where an "all but certain exercise"' of authority can be shown, 96 S. Ct. at 681. Conclusion A proper case for the exercise of the Court's original jurisdiction is presented. The interest of the States is sovereign in character, the issues are defined, the problem is immediate, the subject matter is justiciable and substantial, and the relief prayed is a traditionally appropriate judicial method of resolving the ques- tion. Leave to file the complaint under the Court's original jurisdiction should be granted. Respectfully submitted, Wayne L. Kidwell, Attorney General for the State of Idaho. RiCARD C. Turner, Attorney Gerieral for the State of Iowa. William J. Guste, Jr., Attorney General for the State of Louisiana. Paul L. Douglas, Attorney General for the State of NehrasJca. October 13, 1977. [From the Congressional Record, Oct. 10, 1977 — S17163] The Panama CA^-AL and Allegations of Drug Trafficking Mr. Dole. Mr. President, Panamanian strongman Gen. Omar Torrijos will be in Washington tomorrow to meet with President Carter. Reportedly, they will dis- cuss the proposed Panama Canal treaties, and the recent controversy circulating around differing interpretations of treaty language. There is another serious mat- ter which has just come to my attention, which I hope will also be clarified during Torrijos' visit, or soon afterward. This involves allegations of direct involvement by General Torrijos and other members of his family in drug trafficking in the United States and elsewhere, that the distinguished Senator from Alabama (Mr, Allen) alluded to with regard to one incident. Now, obviously the President of the United States cannot select the individual with whom he conducts his negotiations in international affairs. By the same token, however, our executive branch does have some choice in what is hidden or revealed to the public, \^'hich could bear upon those negotiations. It is my understanding that a number of documents now in the possession of the U.S. Drug Enforcement Administration have been "classified," which bear directly upon allegations of drug trafficking by General Torrijos. Those documents should be immediately turned over to the U.S. Senate for examination. I am told that there is presently within the files of the Drug Enforcement Ad- ministration a large volume of materials bearing upon this matter. I have been given a list of 44 specific file codes containing information on the subject. I am especially troubled to learn that an overt attempt was reportedly made to keep this information out of public purview by moving the intelligence files to another location for temporary safekeeping. I am advised that, just recently, perhaps to avoid embarrassment, these files were returned to the Drug Enforce- ment Administration's control office. Mr. President, I do not like to jump to conclusions, and I do not necessarily believe everything I am told. However, I do consider the source of this informa- tion to be sufficiently reliable to give me deep concern about the nature of the Panamanian deader with whom we are dealing. Suggestions that he — perhaps in conjunction with Fidel Castro — is involved in an illegal international drug oper- ation is cause enough for concern. The allegation that these drugs are being funneled directly into the United States, and that General Torrijos himself may be profiting directly from drug sales, makes the matter all the more serious. SENATE SHOULD HAVE INFORMATION At the very least, I believe the Justice Department — and the Drug Enforcement Administration in particular — should make its findings on tliis matter known im- mediately to the appropriate Senate committee or committees, which can then decide what effect the information might have on ratification of the Panama Canal Treaties. I believe the Subcommittee on Separation of Powers, of the Senate Judiciary Committee, would certainly be entitled to take a look at this material, along with the Senate Foreign Relations Committee, and perhaps others. Mr. President, I am calling upon the administration to address this serious matter immediately. I believe that President Carter should discuss these allega- tions with General Torrijos and request a full explanation. There is no better time for this than tomorrow. In addition, it would be useful for the President himself to examine the files in possession of the Drug Enforcement Administration, and approve their release to appropriate Senate panels for full investigation. If any iK)rtion of these allegations are found to be accurate, I hope that the necessary information will be made available to all Members of Congress, and to the American public before the Panama Canal Treaty ratification process is completed. (400) 401 Mr. President, as the Senator from Kansas indicated, tlie list containing DEA file references contains about 44 different references. In an effort to be totally cautious, and after making investigation as to whether or not the numbers them- selves were classified, and being told that i)erhaps they were not, but to be on the safe side, after having exi^erienced just last week with the State Department, the Senator from Kansas will not make public the reference numbers, but the Sena- tor from Kansas does believe it is appropriate, at the proper time, to turn these references over to the proper committee, and I would hope that, based on the in- formation available, the files could be subpenaed or otherwise brought before the approriate committees in Congress, perhaps in executive session, and looked into very carefully. But it seems to me that if someone were to ask, "How does this bear on the ratification of the treaties," the Senator from Kansas might state that if these allegations were true, it would have a great bearing on the ratification of the treaties, because it involves one of the principal participants and that individual's integrity. So I would hope, based upon the statement that, come tomorrow, the Presi- dent will discuss this matter, if he checks with the DEA, and finds the informa- tion to be accurate, with General Torrijos, Mr. President, I yield back the remainder of my time. Mr. Baker. Mr. President, I once again commend the Senator from Kansas for his diligence and care in pursuing aspects of this matter which is of so much interest to us. The remarks made by him today, and earlier by the distinguished Senator from Alabama, are in excess of the information available to me, but I would like to add to the record that part that I know, so that he will be seized with what I know, and can determine where to go from here. The majority leader is present and can corrO'borate what I am about to say, but I see no reason for not reporting to the Senate that the Attorney General briefed us in connection with certain matters in this respect, and he briefed the chairman and the ranking Republican member of the committee in certain re- spects. I have suggested to the Attorney General, and it is my understanding that he agreed, that the appropriate jurisdictional committees of the Senate be briefed on such matters as might be relevant to the subject of their consideration. Mr. President, the only reason I say this is to let the Senator from Kansas know that there has been a contact with the administration, and that it has been my insistence, and I believe that of the majority leader as well, that the Senate be informed on whatever aspects may be relevant, if any. I do not know the details of the transactions or the allegations. I cannot speak for their truthful- ness. But I thought, in view of the interest and importance of the matter, the Senate ought to be kept fully informed. Mr. Robert C. Byrd. Mr. President, the minority leader has correctly stated the situation as to our being briefed, and we have been assured we would continue to be briefed as to any further information which comes to the attention of the Attorney General upon this matter. Mr. Baker. Mr. President, I would only reiterate one part, to make sure it is entirely clear: It was at our insistence that the Department of Justice make sure that the relevant commitees of the Senate he fully apprised of whatever information might be relevant to our consideration of relevant matters. :Mr. Dole. Mr. President, I appreciate being informed that the matter is mov- ing along. Does that include information as to the allegation that the files may have been removed and then returned? Mr. Baker. No. I prefaced these remarks by saying that the Senator from Kansas had more information than I had, and it was to that that I was referring. Mr. Robert C. Byrd. Mr. President, I want to say that I have full confidence in the intention of the Attorney General of the United States to bring to our attention the full relevant information, as he has done, and I have no doubt that he will continue to bring to the attention of the joint leadership and Senate committees any information that he has bearing on this matter. Mr. President, I yield the floor. Mr. Thurmond. Mr. President, I commend the able Senator from Kansas for bringing this information to the Senate. It would be my hope that the files re- ferred to by him, that contain such information, would be made available by the administration to the Separation of Powers Subcommittee of the Committee on the Judiciary. I feel that these charges are too serious to be passed on lightly. I feel that this matter should be gone into carefully, and that there should be no action on the part of the administration to withhold files. I do not predict that 402 they will, but I feel very strongly that the information in these files should be made available to the Members of the Senate. Mr. Hatch. Mr. President, as ranking minority member of the Separation of Powers Subcommittee, I also would lilve to tliank the distinguished Senator from Kansas for his enlightenment of the Senate, and I think the country, today. I have had a lot of reports from various sources that the Torrijos regime has been participating for a number of years in drug trafficking. I have, for the most part, chosen to carefully watch those reports, but have not had any particular source that I was willing to rely upon, until today, to give me any indication or information that would lead to reliable or verifiable proof of such trafficking. We liave held some extensive hearings in the Separation of Powers Subcom- mittee, and we have tried to do everything in our power to bring out a variety of matters concerning the Panama Canal on both sides. I commend the distinguished Senator, and I do believe that the administration ought to provide us with these files, ought to provide us with the appropriate people who can testify, and let us know who they are, so that we can once and for all get this matter out in the open, and determine exactly what type of regime we are dealing with, and above all, what kind of a person we are dealing w^ith in Omar Torrijos. The chairman of the committee is here on the floor, and I do not mean to usurp his function by making this particular request, but let me just say this, for myself personally : I feel that it is a very reasonable request, and we ought to be able to look into the matter. I think for the benefit of all Members of the Senate, and certainly for the benefit of the country as a whole. As everyone knows, this Panama Canal problem has become one of the paramount problems of our day. There are differing viewpoints and differing sides to this question, but I would like to see both sides brought out, and not just one side. I am not sure we have had enough brought out on the impact of the treaty side to keep people properly informed. I think the people should know if there is evidence of drug trafficking, and if the evidence you have indicated can be obtained. I think we ought to see it. I thank the Senator from Kansas for his statement on the floor of the Senate, and certainly want to give any support I can to the committee and to the American people. [From the Congressional Record, Oct. 17, 1077--S17237] Panama Canal Poll Mr. Thuemond. Mr. President, the overwhelming opposition of the American people to the giveaway of the Panama Canal was amply proven in a recent poll on that subject by the weekly National Enquirer newspaper which, claims 15 million in circulation throughout the United States. Ninety-seven percent of those responding said "no" to the question "Should the United States turn control of the Panama Canal over to Panama?" The Enquirer took no position on the question, but offered to its readers argu- ments on both sides of the issue by two distinguished Members of this body. The newspaper pointed out that over 4,500 replies had been received in the poll to date with 4,376 against giving up control and 140 in favor. Mr. President, I ask unanimous consent that this article in the October 18, 1977 issue of the Enquirer, published in Lantana, Fla., be printed in the Record. There being no objection, the article was ordered to be printed in the Record, as follows : Poll: 97 Percent Say Don't Give Control of Canal to Panama An overwhelming majority of readers responding to an Enquirer poll say the United States should not turn over control of the Panama Canal to Panama. First results of our poll, announced in the September 27 issue, show that of 4.516 ballots cast, 4,376 or 97 percent voted "no" on the question : "Should the United States turn control of the Panama Canal over to Panama?" Casting "yes" votes were a total of only 140 readers, or 3 percent. As usual in our polls, The Enquirer took no sides on the question, but presented the pro and con views of leading spokesmen. Arguing against the Panama Canal Treaty, which is backed by President Carter and awaiting Senate ratification, U.S. Sen. Orrin G. Hatch (R.-Utah), warned that giving up the Canal under- mines U.S. security and well-being. Opposing this view, U.S. Sen. Mike Gravel (D.-Alaska) said that the new treaty is not only fair, it also protects American interests. "Watch for further results of this poll in future issues. Letter to Attorney General Bell With Regard to DEA Report on Gen. Omar Torrijos Mr. Helms. Mr. President, last Friday, I sent a letter to Attorney General Griffin Bell urging him to report to the American people on what steps the Drug Enforcement Administration of the Department of Justice is taking with regard to the investigation of Gen. Omar Torrijos and his family. There have been numerous allegations that General Torrijos and/or his family have been involved in drug trafficking. In particular the House Panama Canal Subcommittee reported that in 1973 one-twelfth of all cocaine and heroin entering the United States came through the Panama route. There is a considerable body of evidence that the general himself is or was involved in the trade, or at least has condoned it when engaged in by his brothers. It is now well known that the Drug Enforcement Administration has many files relating to these allegations. The distinguished Senator from Kansas (Mr. Dole) reported last week that numerous files were removed from the central office of DEA and transferred to another site, in an apparent effort to keep the public from knowing the extent of the Torrijos involvement. On Friday, I wrote to the Attorney General, asking him to report to the American people, and enclosing a copy of a DEA investigative report which made serious allegations against General Torrijos. Of course, the allegations in (403) 404 one report do not constitute proof. But when the files are as extensive as they appear to be, the American people deserve an explanation in detail of how thorough DEA's investigation of these allegations was, particularly when we have signed a treaty with one of the principles involved. Moreover, on Saturday, CBS Evening News carried a story alleging that the material in the files includes the following. Col. Manuel Noriega, the head of Panama's secret police, is described as the "bag man" for General Torrijos, and as the liaison between Torrijos and Castro. CBS also reported that the files con- tain allegations that General Torrijos and his associates planned to assassinate former Panama President Arnufo Arias, who was then in exile in Miami ; and that as late as 1975, Hugo Torrijos, brother of the Chief of State, was using Panamanian Air Force planes to transport drugs. These are charges that cannot be covered up. They must be answered, and answered directly. If these charges are groundless, then it will be a simple matter to bring out the facts and refute them. But if this administration is attempting a grand coverup, then the consequences for this Nation, both at home and abroad, will be profound. ]Mr. President, I ask unanimous consent that my letter to the Attorney General and its attachment be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows : U.S. Senate, Washington, B.C., October IJf, 1977. Hon. Griffin B. Bell, Attorney General, Department of Justice, Constitution Avenue, Washington, D.C. Dear Mr. Attorney General : I am enclosing what purports to be a facsimile of a Drug Enforcement Administration investigative report which contains serious allegations against General Omar Torrijos. It appears to be the same report which was mentioned this morning on the CBS Morning News. Inasmuch as the House Panama Canal Subcommittee reported in 1973 that as much as one-twelfth of all heroin and cocaine enters the United States through the Panamanian route — enough to destroy the lives of 20.000 addicts in the United States — the question of whether General Torrijos and his immediate family condone this trafficking or participate in it is of crucial importance to the American people. I therefore urge you to report to the American people on what steps DEA and the Department of Justice have taken to investigate these allegations. Several close associates of the Torrijos family have been apprehended and convicted of drug trafficking by U.S. Courts; moreover, your own Department has confirmed, according to press accounts, that a sealed indictment exists against Moises Tor- rijos, the brother of the head of state of Panama. Unless this matter is fully aired, the American people will never accept any agreement with the Republic of Panama which is tainted at the very source by such allegations. Once again, I urge you to explain this to the nation with full candor. Sincerely, Jesse Helms. Intelligence Report This report is for the confidential and exclusive use of law enforcement agen- cies only. Information contained herein is not for evidential use as contents were collected by sensitive sources. The information is for the purpo.se of suioplying investigative leads and contains neither recommendations nor conclusions. DETAILS 1. In early February, 1975, a confidential source, in direct conversation with Ramiro Rivas, owner of a cement block company located in Pedregal, Panama, learned that Rivas maintained a $750,000 bank account at the International Bank of Miami located at 627 S.W. 27th Av., Miami. Rivas stated that he was in part- nership with Omar Torrijos, a Panamanian General, in narcotics trafficking and was attempting to purchase a tran.sportation company that would provide a greater capability in moving narcotics through Panama for Torrijos. 2. Rivas stated to the source that Panamanian aircraft are currently being used to transport narcotics from Cuba, Peru and Colombia to Panama. After the nar- 405 cotics arrive in Panama, they are transported to the U.S. by aircraft, vessels, and in some cases, by vehicles overland to the Mexican border. Rivas did not specify the type of narcotics involved but implied that it was marijuana and cocaine. 3. Kivas further stated to the source that Hugo Torrijos, brother of Omar Tor- rijos. Genaro Barreras, Julio Arosemena, Samaniego, (FXU), (military intelli- gence stationed at Tocumen International Airport: "El Cholo" (NFI), (aid to Cohmel Antonio Noriega) ; and Edurado Guzman-Hiloa, and auditor of the Pres- idente Eemon Racetrack in Juan Diaz (Panama), are all involved with him and Torrijos in narcotics trafficking. 4. A check of MRO records reveals that Omar Torrijos is mentioned in GF-Pan- ama along with Hugo Torrijos, Rivas, Barreras, Samaniego, Arosemena, "El Cholo", Noriega and Guzman were negative. [From the Congressional Record, Oct. 17, 1977 — S17243] The Panama Canal Treaties Mr. Thurmond. Mr. President, late Friday evening. President Carter and General Torrijos issued an unsigned joint statement of understanding on differ- ing United States and Panamanian interpretations of the treaties. After reading press reports over the weekend, it appears the so-called under- standing is a very informal diplomatic document. It is not even a signed agree- ment as General Torrijos pointedly said on his return to Panama when he declared in a cavalier manner, "I haven't even signed an autograph." On the issue of intervention, the statement, in part, provides — "* * * each of the two countries shall in accordance with their respective con- stitutional processes, defend the Canal against any threat to the regime of neu- trality, and consequently shall have the right to act against any aggression or threat directed against the Canal or against the peaceful transit of vessels through the canal." In addition to this language, however, the joint statement provides — "This does not mean, nor shall it be interpreted as a right of intervention of the United States in the internal affairs of Panama." The point is that the canal becomes internal to the affairs of Panama 6 months after ratification of the treaties. Sovereignty and control pass to Panama, and any action taken by the United States will be subject to the above proscription. I am unable to determine who defines intervention or what the definition of interven- tion would be. The issue of expeditious passage also remains unclear. I am unable to discern who determines priority passage and what conditions constitute emergencies sufficient to bring about expedited treatment. This vague two-party statement has clarified nothing, and any further drafting should be approached as treaty amendments, not general statements subject to varying interpretations. The new "understanding" is merely an interpretation of the treaties by the current leaders of the two countries affected and the fact such an interpretation, was needed testifies to the ambiguities in the treaty itself. Only the treaties are permanent and only the treaty documents will serve as a basis for future decisions. Today the United States does not base its rights in Panama on what leaders of that period said it meant, but rather upon the bare words of the 1903 treaty itself. This same application will apply in future years to the Panama Canal treaties we are being asked to ratify today. Even if the statements were clear, which they are not : even if they were signed, which they are not : even if they were in the form of amendments, which they are not ; they still leave unsettled the central objection to the treaties — re- linquishing ownership and control of a vital commercial and defense asset to the unstable, left-wing dictatorship of General Torrijos. Again, the question comes to mind — Who can best operate, defend, and keep the canal open for the rest of the world — the United States or the Torrijos regime? Mr. President, in order to share a number of news items on this matter with my colleagues, I ask unanimous consent that the statement of understanding as issued by the White House, the Foreign Information Service broadcast report, and an article carried by the Washington Post, be printed in the Record. There being no objection, the material was ordered to be printed in the Record, as follows : 406 Statement of Understanding Under the Treaty Concerning the Permanent Neutrality and Operating of the Panama Canal (the Neutrality Treaty), Panama and the United States have the resiK)nsibility to assure that the Panama Canal will remain open and secure to ships of all nations. The correct interpretation of this principle is that each of the two countries shall, in accordance with their respective constitutional processes, defend the Canal against any threat to tlie regime of neutrality, and consequently shall have the right to act against any aggression or threat directed against the Canal or against the peaceful transit of vessels through the Canal. This does not mean, nor shall it be interpretetl as a right of intervention of the United States in the internal affairs of Panama. Any United States action will be directed at insuring that the Canal will remain open, secure and ac- cessible, and it shall never be directed against the territorial integrity or political Independence of Panama. The Neutrality Treaty provides that vessels of war and auxiliary vessels of the United States and Panama will be entitled to transit the Canal expedi- tiously. This is intended, and it shall so be interpreted, to assure the transit of such vessels through tlie Canal as quickly as possible, without any impedi- ment, with expedited treatment, and in case of need or emergency, to go to the head of the line of vessels in order to transit the Canal rapidly. [From the Foreign Information Broadcast Service] Panama: Torrijos Returns, Says Nothing Signed in Washington Gen. Omar Torrijos Herrera arrived back home at 1700 today, when all the world's newspapers are reporting and commenting on his interview this morning with President Jimmy Carter. He returned in a special jet which landed at the Rio Hato Air Base. He was accompanied by Agricultural Development Minister Col. Ruben Dario Paredes, Presidency Minister Fernando Manfredo and Romulo Escobar Bethancourt, chief of the Panamanian negotiating team. He was also accompanied by special guard Sergeant Jose de Jesus Martinez and his private secretary, Celia De Gaswell. General Torrijos was received by the Rio Hato garrison chiefs and by the guards which are stationed at his farallon home. Our reporters filmed General Torrijos arrival and recorded his brief statements concerning his long and positive trip. Torrijos said that he was tired from the trip and wanted to rest before making extensive statements. He said that he considered the tour very beneficial for Panama and that we could rest assured that everything negotiated and everything discussed was in his people's favor. He added that he understands that the people are very defensive concerning their sovereignty and that during his meeting with President Carter he Lad not signed even one autograph. Ques- tioned about the comments which arose after his meeting with Carter, Torrijos repeated that he had signed nothing at all and had done nothing to change the new treaties signed on 7 September. He said that the small groups which are opposed to the treaties also have their rights, but that this is nothing to worry about, that on the contrary, this provides stimulation for positive accomplish- ments. Torrijos' wife, children and relatives arrived on a special flight in Rio Hato a few minutes after Torrijos arrived. Bidding farewell to our reporter Santa Maria Llamas, Torrijos said that he will soon hold a new conference. [From the Washington Post, Oct. 16, 1977] Gen. Omar Torrijos Denies Signing New Canal Pact Panama City, October 15. — Gen. Omar Torrijos, fresh from a meeting with President Carter on the Panama Canal treaties, has denied reports here that he signed a pact giving the United States the right to military intervention in the canal. "I haven't even signed an autograph," Torrijos said yesterday when his fliglit from Wasliington landed at the Rio Hato air force base, near his beach house. He said he was too tired to make further comments. 407 Torrijos said Carter had been very affable and that they had talked about the process of ratifying Panama Canal treaties by the U.S. Senate and the people of Panama. [After Torrijos and Carter met Friday, the United States and Panama issued a joint communique clarifying Washington's treaty right to intervene to main- tain neutrality of the canal even after it reverts to Panamanian control in the year 2000. Neither leader signed the communique.] 99-592—78 27 [From the Congressional Record] U.S. Interests in the Panama Canal Mr. Harry F. Byrd, Jr. Mr. President, tlie Panama Canal has belonged to the United States for 72 years. It is U.S. territory. Yet our State Department is currently involved in negotiations, with the Govenment of Panama, designed to end U.S. control over that territory. I think that would be a very serious mistake. The Panama Canal is a valuable economic and defense asset and I am per- suaded that any new treaty compromising our rights in the Canal Zone would not be in the interest of the United States. A recent editorial in the Richmond News Leader argues concisely why "this is not the time to give the canal away. Not now, Not ever." And a recent article by Lt. Gen. V. H. Krulak, in Strategic Review, presents an excellently argued, and compreliensive presentation of why the United States should not sign away its sovereign rights over the Panama Canal. I ask unanimous consent to have these articles printed in the Recoro. There being no objection, the articles were ordered to be printed in the Record, as follows : [From the Richmond (Va.) News Leader, Feb. 3, 1976] Keep the Canal The negotiation of a new Panamana Canal treaty — one tliat would give Pan- ama eventual control over the waterway — is proceeding with all deliberate speed. State Department negotiators say that nothing much will hapi>en before the end of the year. Why? Because 1976 is an election year, and moving the talks along quickly (a) would generate publicity, (b) publicity would stir a fuss in Congress, and (c) that sort of a political squabble proponents of a new treaty do not need. Likewise, Panamanian strongman Omar Torrijos and his adviser, Fidel Castro, see no fight. Last month, Torrijos journeyed to Havana. He came, he saw, and he concurred with Castro that, in Panama, time is running out for the United States and its sovereignty over the canal. Advised Fidel : Don't press the issue. So, from Torrijos, there were no denuncations of the dread Yatiquis and all their works, no diatribes against the wicked imperialists. Said Torrijos : "Panama will have the last word. We are — remember this — in a process of liberation and one of the means by which that can be reached is through negotiations." Plainly, Torrijos would rather talk than fight. Castro's support for Torrijos' policy of patience will do much to defuse the violence-potential of restive Panamanian "students." who seek immediate take- over of the canal. These students remain the only domestic danger that Torrijos faces, but they follow orders. Castro's support helps Torrijos wait out the American elections, and win a treaty to his liking. (Still on the agenda are (1) the amount of territory — if any — to be left under U.S. jurisdiction; (2) U.S. defense rights and ol)ligations during the duration of the treaty; (3) what that duration will be; and (4) how much the U.S. will give Panama in rent, in addi- tion to tlie $2.3 million it pays now. The Torrijos scenario has one serious flaw : It is contingent on President Ford or a like-minded Democrat occupying the White House until 1980. Unfortunately, for Torrijos, Ronald Reagan already has made the canal a campaign issue by charging that the talks indicate an American sellout. For Torrijos. Reagan's attentions are unwelcome. Fourteen Panamanians — businessmen, lawyers, and radio broadcasters — already have been exi)elled from their country. Their crime; vague links with Reagan. Supporters of "Panamanianization" of the canal argue that the American presence in the zone rubs Latin sensibililties raw. and that the canal is obsolete — an "aging utility," according to Ambassador-at-Large Ellsworth Bunker, who (408) 409 heads the American negotiating team. Yet thousands of ships use the canal each year, and 70 per cent of the waterway's traffic either originates or terminates at U.iS. ports. Moreover, a tough stand in Panama would draw the line against other Third World demands on the West — demands that, too often, are thinly-masked thrusts of Soviet imperialism. The United States spent billions to build and maintain the canal, and to defend it For Torrijos waiting out an election may be a clever ploy, but for the American people, the realization must come that this is not the time to give tile canal away. Not now. Not ever. [From Strategic Review, Winter 1976] Panama : Strategic Pitfall (By Lt. Gen. V. R. Krulak, USMC, ret.) (The author: Gk^neral Krulak is a Director of the United States Strategic Institute. From 1964 to 196S General Krulak served as Commanding General, Fleet Marine Force, Pacific. He is now Director of Editorial News Policy of the Copley Newspapers and President of the Copley News Service, San Diego, Cali- fornia. General Krulak's article, "Mainland China : The View from Taiwan," was published in the Summer 1975 issue of Strategic Review.) IN BRIEF The case for giving up the Panama Canal rests on three i)oints : that the Canal Zone is really Panamanian property ; that the United States pressured Panama into giving us the Canal Zone in 1903 ; and that the United States is exploiting the Panamanians, robbing them of Canal operating profits that are rightfully theirs. In fact, the 1903 treaty granted the United States jjerpetual sovereignty over the Canal Zone. It is more accurate to say that Panama pressured the United States because Panamanians were fearful that a canal would be built across Nicaragua instead of Panama. The United States paid Panama for the right to build the Canal and for clear title to the Canal Zone, and currently voluntarily pays Panama $2 million a year, although the Canal has been a losing venture during the past few years. Due largely to Canal-related employment, Panama- nians have a living standard equalled to few other Latin American states. The Canal is still strategically important to the United States and economically im- portant to the United States and to the world. Only because of the Canal is the United States able to risk what amounts to having a bare bones one-ocean navy. There is no indication from their current behavior that the Panamanian dictator and his Marxist military government would not capriciously bring about major changes in the economy and security of our nation if they were ever in a posi- tion to exercise authority over the operation of the Canal. Most Latin Americans understand these factors as do the American people at large. W^e live in a time when revisionists serve up historical fiction to meet every ideological need. No current issue of importance has undergone more distortion of historical fact or present reality than is represented by the massive campaign afoot to ix)pularize U.S. relinquishment of sovereignty in the Panama Canal Zone. This should surprise no one. A principle of the greatest importance is involved here. It is the latest pressure-point for erosion of U.S. prestige as well as the ability to control its future. With the Soviets gaining port facilities of the great- est strategic importance all around the globe to service their growing naval power, Panama, apart from the Canal as a strategic asset, must be viewed as a key location in the Western Hemisphere. Basically, the drumfire of propaganda in both the U.S. print and electronic media rests its case on three points : First, the contention that the Canal Zone is really Panamanian property and that the Republic of Panama never reliquished its soverign rights to the area ; Second, that the United States pressured Panama into giving us a position on the Isthmus of Panama in 1903, using deception, force and threats to accom- plish something that contravened the desires of most Panamanians themselves ; And finally, that the United States is even now exploiting the Panamanians, robbing them of Canal operating profits that are rightfully theirs. All three of these contentions are contrary to fact. None has any basis in truth. 410 SOVEREIGNTY As to the matter of sovereignty, there is no question whatever. The Canal Zone is not in any sense Panamanian territory. The 1903 Hay-Bunau-Varilla Treaty with Panama was unequivocal in this regard, granting the United States "per- petual sovereignty over the Canal Zone to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." The treaty is in no way less positive or final than the treaty of 1803 through which President Jefferson bought Louisiana from Napoleon, or the treaty of 1867 which formalized the purchase of Alaska from Czarist Russia. The reality is that the 558 square mile Canal Zone is United States territory, a fact that the United States Supreme Court subsequently confirmed in a formal opinion— ( Tyi7son v. Shaw, 204 U.S. 24, January 7, 1907) . Among other things, the lengthy Court opinion says, "The title to what may be called the Isthmian or Canal Zone, which at the date of the act was in the Republic of Columbia, passed by an act of secession to the newly formed Republic of Panama. The latter was recognized by the Presi- dent. A treaty with it, ceding the Canal Zone, was duly ratified, 83 Stat. 2234. Congress has passed several acts based upon the title of the United States, among them one to provide a temporary government, 33 Stat. 429 ; another, fixing the status of merchandise coming into the United States from the Canal Zone, 33 Stat. 843 ; another, prescribing the type of canal, 34 Stat. 611. These show a full rati- fication by Congress of what has been done by the Executive. Their concurrent action is conclusive upon the courts." The Supreme Court opinion in this area is summarized in the words, "It is hypercritical to contend that the title of the United States is imperfect, and that the territory described does not belong to this Nation " Second, the United States did not pressure the Panamanians. It would be more accurate to say that they pressured us. Following liberation from Spain at the beginning of the nineteenth century, Panama joined Venezuela and Ecuador in uniting with Colombia. The union did not work. Venezuela and Ecuador split off first and Panama subsequently be- came disenchanted with the behavior of Colombia because of its exploitation of the people of the Panamanian region. Beyond this, the Panamanians were fearful that a canal would be built across Nicaragua instead of Panama, because of Colombian incompetence and lethargy. Consequently, the Panamanians were more than glad to negotiate a profitable agreement with the United States. As an element of their agreement with the United States, Panama was paid fairly for both the right to build the Canal ($35 million) and for clear title to the Canal Zone ($160 million). The country has flourished in the ensuing seventy- two years and now, largely due to Canal-related employment, the one and one- half million Panamanians have an annual per capita income of $1,000 and a living standard equal by few other Latin American states. Finally, the allegation that the U.S. is robbing Panama of Canal revenues Is totally without foundation. We give Panama a voluntary $2 million a year pay- ment (up from an original $430,000). And there are no profits. Although toll col- lections exceed $114 million annually, the Canal has been a losing venture for us during the last few years. SIGNIFICANCE OF THE CANAL Quite apart from the sophistry and characterizes the campaign of those who want to see us out of Panama, Americans need to take a hard look at just what it would mean to us were the authority over this vital lifeline actually conveyed to the present government of Panama. It is a Communist government. The Communist Party is the only party recog- nized in the country. Others are outlawed. The principal government officials are all Marxist — including the chief of state, Omar Torrijos, a National Guard lieu- tenant colonel who seized power by force from the elected president, Dr. Ar- nulfo Arias, in 1968. Freedom of speech and of the press have been totally stifled, the Church har- assed, the national Congress closed, and national elections have been suspended indefinitely. Hatred and defamation of the United States are as much a national policy as are close ties with the Communist world, most particularly the Soviet Union and Cuba. 411 The attitude of the military government is one of inflexible determination to achieve total authority over the Canal, or to punish everyone involved if this effort is unsuccessful. In late 1974 the acting ambassador to the United States from Panama, speaking in a television interview, was unequivocal. He said that if the Panamanian government is unsuccessful in its treaty negotiations with the U.S. "there will be no Canal for anybody, not for us, not for the United States, not for the world." Torrijos mirrored this view last August, when he said, "We're going to make ourselves independent. What we have to decide is at what price. The day the people begin acts of sabotage nobody can control them. Because the Canal is as indefensible as a newborn child." All of this is a thinly disguised threat of violence that neither the United States nor the rest of the world can tolerate, for the 14,000 ships that transit the Canal annually are an important element of the world's lifeline. The fact is, Torrijos and his followers cannot be regarded as responsible men, and if they were ever in a position to exercise authority over the operation of the Canal, they could capriciously bring about major changes in both the econ- omy and the security of the United States. Nor is there any indication from their current behavior that they would not be willing to do so. By jacking up the Canal tolls to American shipping they could add substan- tially to transportation costs, and thus to the cost of end items in our marketplace. Alternatively, by closing down the Canal at their own whim, they could double the cost of maritime fuel for a voyage from the west to the east coast of the United States, and more than double the average transit time from coast to coast. When it is realized that fully 8,000 ships a year carry cargo through the Canal, destined for U.S. ports, the resultant increase in retail costs of the com- modities is evident. A common argument is that the Canal has largely lost its strategic value to the United States because our principal combatant ships are too large to get through the locks. Actually, a total of only thirteen ships in the U.S. Navy have beams too great to permit passage through the waterway. The remainder of the fleet, some 470 ships — not to speak of an equal number in reserve — can use the Canal, and do so, beneficially. In the past two and one-half years some 750 U.S. Navy ships transited the waterway bound east or west on affairs related to our national security. Had all these ships — for any reason — been obliged to take the Cape Horn route, the in- creased fuel requirement would have been on the order of 26,000 barrels, which is to say about $20 million worth of precious petroleum. And were a combatant crisis also involved, the additional thirty to thirty-five days of steaming could well be of decisive tactical importance. In truth, the Panama Canal is an essential link between the naval forces of the United States deployed in the Atlantic and in the Pacific. It is only because of the waterway that we are able to risk having what amounts to a bare bones, one-ocean navy. However, without absolute control of the Canal and the essential contiguous land, the United States could not accept the hazard of a one-ocean navy. It would be essential at once to initiate construction of fleets independently able to meet a crisis in either the Atlantic or the Pacific — a massive expenditure which we are now spared only because of our control of the Canal. These factors are appreciated throughout Latin America, where all but the far left governments see it as something quite different from the issue of anti- colonialism that has swept around the world. The Canal Zone does not share the history of Portuguese, French or British mercantile colonialism in Africa. It is not a Nigeria or a Chad. The Panama Canal is a sensitive trust — one which the United States has never sought to exploit for its ovm exclusive advantage. Most Latin Americans understand this. In their own intrest they realize that the critical strip, measuring only 5 per cent of the total area of the Republic of Panama, must never be permitted to fall in irresponsible hands. STRATEGIC REALITIES At a recent meeting of the Inter-American Press Association in Sao Paulo, Brazil, the attitude of Latin American publishers and editors was cold and clear. It was best expressed by a Chilean who said, "You would be doing yourself and us a major disservice if you were to back off one centimeter from your present position in Panama." 412 And a Venezuelan, in speaking of the concessions the U.S. has already offered, made pointed reference to the futility of appeasing communism, quoting Aleksander Solzhenitsyn on the subject of what he calls "shortsighted concession ; a process of giving up and giving up and giving up, and hoping that perhaps at some time the wolf will have eaten enough." Even more to the point, these strategic and economic realities are generally understood by the American people at large and, through this understanding, there is a very substantial popular sentiment against any action which would diminish our sovereignty over the Canal Zone. What is less well known is the fact that since 1968 the United States has been involved in negotiations with Panama over our position in the Canal Zone. Be- tween 1970 and 1975 the U.S. has proposed a number of concessions — relinquish- ment of the "in perpetuity" clause of the 1903 treaty, increase in dollar payments and cession of certain port facilities. Then, in 1974, the U.S. agreed to sit down with representatives of Panama and work out a comprehensive agreement that would initially give the Panamanians .iurisdiction over the Canal Zone, and, ultimately, would actually transfer both ownership and operating responsibility of the Canal to Panama. We are doing exactly that right now. Ambassador Ellsworth Bunker, operating under those guidelines, is at work on a Caribbean island, developing the details with representatives of Panama. Ultimately, of course, it will all have to come before the U.S. Congress for ratification, and no American legislative body in history has had a more sobering task than the one the legislators will face when they contemplate a treaty that diminishes or relinquishes our precious sovereignty in Panama. If the Congress concludes that the U.S. can risk sharing those fifty vital miles of lifeline with a hostile Communist government ; even worse, if it agrees to give the Canal away, it will have done this country more harm than a dozen succeeding Congresses could repair. [From the Congressional Record] ToRRiJOS Continues to Orchestrate Blackmail Mr. Thurmond. Mr. President, since Brig. Gen. Omar Torrijos, the Panama- nian dictator, met with Castro in Cuba, he has attempted to change his hard line stand. He has begun a clumsy campaign with subtle threats aimed at causing the United States to give away the Panama Canal. His theme now is to label this Nation as colonialist and threaten a confrontation to embarrass the people of the United States. Senate Resolution 97 answers General Torrijos. Aside from the fact that the land within the Panama Canal Zone was purchased by the United States over 70 years ago, $6 billion invested by our Government since that time and sov- ereignty of the Panama Canal Zone resting in the United States, there are other key reasons why blackmail by Torrijos will fail. The Panama Canal Zone is not a far away land which has no effect on our security. The people of this Nation will not permit a dictator with Communist leaning to control the canal. Should he gain control, we cannot be sure that one day the canal would not be closed to U.S. shipping. It is ridiculous to give up our rights and put this Nation in the position of having to circle South America to go from the Atlantic to the Pacific and vice versa. With the Canal Zone within striking distance of the United States, it is foolish to place our security in the hands of another potential Castro. A recent public opinion survey shows Americans stand 5 to 1 against surrender to the tin sabre rattling of Torrijos. Mr. President, I ask unanimous consent that the following article which appeared in the Richmond Times-Dispatch on April 10, 1976, be printed in the Record. There being no objection, the article was ordered to be printed in the Record, as follows : Resolve Dispute by 1977, Panamanian Warns Panama City. — Brig. Gen. Omar Torrijos, Panama's chief executive, says serious trouble could erupt in the U.S. owned Panama Canal Zone if a new treaty is not reached by 1977 to turn the zone over to Panamanians. He said he has an unwritten pact with Panamanian students and workers for prudence until the negotiations are either finished or break down. "We are prepared for whatever solution," Torrijos said. "We have set 1977 as the goal. Patience has its limits." He said current negotiations, which began in 1973, "have made substantial progress" but the U.S. presidential campaign has slowed them down. REAGAN'S STAND Republican challenger Ronald Reagan has made an issue of the canal, attack- ing what he says are Ford administration moves to give it up. The State Department has described as "completely false" a Reagan charge over the canal zone that they will soon recognize Panamanian sovereignty. The chief American negotiator, Ambassador Ellsworth Bunker, was quoted by the head of the U.S. House Merchant Marine and Fisheries Committee in Wash- ington as saying Thursday that there is no prospect for completing of the nego- tiations in the immediate future. His testimony was given in a clossed session but Rep. Leonor K. Sullivan, D.-Mo., told reporters afterward : "He said there's quite a bit to be done." Mrs. Sullivan expressed concern that a treaty will be negotiated without authoriza- tion from Congress. Congressional concern over the Canal was expressed last summer when the House passed, by a wide margin, a measure attempting to cut ofiC State Depart- ment funds that might be used in the negotiations. A new round of U.S.-Panamanian talks is scheduled for later this month on replacing the 1903 treaty that gave the United States perpetual control over the Canal Zone. (413) 414 Torrijos said Friday "When the American people realize the real situation, they will feel deeply ashamed. They are celebrating their bicentennial but they have a colony in Panama * * *" Torrijos, who commands Panama's 7,000-man National Guard and has been the nation's leader since he overthrew President Arnulfo Arias, a civilian, on Oct. 11, 1968, has united Panamanians in a demand for a new treaty. He said he was doing all that is possible to avoid violence by extremists who want the immediate withdrawal of the 40,000 American soldiers in the 500- square-mile Canal Zone. "I don't want to kill any students," he said. "It would take just one student getting arrested or hurt by the foreign police in the zone. An incident would retard the negotiations, would erase all the kilometers we have come. So we tell them to be calm, and we try to avoid any incidents." In 1964, Panamanian demonstrators entered the Canal Zone to protest the flying of the American flag there and in subsequent disorders 21 persons were killed. Most were Panamanians. The issue was settled when the United States agreed to fly the Panamanian flag along with the American flag. Torrijos, while critical of some U.S. policies, said he is not anti-American. "I admire the American people very much for their technology and their great sense of shame," he added. "But I am rabid against people who permit that colonial encave. It is one thing to talk about colonialism. It is another thing to feel it." Torrijos also reaffirmed his pledge to protect the labor rights of Americans who work in the zone after a new treaty. "I am the first to admit that the canal is very efficient, one of the most efficient things in the world. We will need those people. "But they don't believe me," he said. [From the Congressional Record] Panama Canal: Catalyst for Restoration of National Will Mr. Harry F. Byrd. Jr. Mr. President, in the current struggle for world power there are five crucial maritime trade routes. These five trade routes are : 1. Thee Strait of Gibraltor, the security of which is endangered by events in nearby Portugal ; 2. The Suez Canal — Red Sea route to the Indian Ocean, which threatens to be effectively controlled by Soviet power ; 3. The Strait of Malacca, which is within the range of the power of potential adversaries ; 4. The passage around the Cape of Good Hope, which is now threatened by the Soviet-Cuban invasion of Angola and events in Rhodesia ; and 5. The Panama Canal. The problems of the Panama Canal were the subjects for discussion on May 27, 1976, at a seminar in the National Lawyers Club, Washington, D.C., on the "U.S. -Panama Negotiations for a New Canal Treaty." The meeting was sponsored by the Inter-American Bar Foundation of which Charles R. Norbert is president, the Fletcher School of Law and Diplomacy, the Federal Bar Asso- ciation's Council on International Law and Council on the Younger Lawyer; and the Inter-American Bar Relations Committee of the Bar Association of the District of Columbia. The principal speakers were William S. Barnes of the Fletcher School of Law and Diplomacy; David H. Ward, former special U.S. representative for the current Panama Treaty negotiations ; Capt. Franz O. Willenbucher, an experi- enced naval officer, lawyer, and long-time student of Panama Canal legal and treaty matters ; and Dean Camilo Octavio Perez of the Law School of the Uni- versity of Panama. The highlight of the program was a carefully prepared and extensively doc- umented address by Captain Willenbucher that challenged the main assertions and assumptions of the other speakers. Mr. President, I think the adress by Mr. Willenbucher should be of interest to Members of the Congress, officials in the executive branch, and the public at large. I request unanimous consent for the statement to be printed in the Record. There being no objection, the statement was ordered to be printed in the Record, as follows : Panama Canal: Catalyst for Restoration of National Will (By Franz O. Willenbucher, J. D., captain, U.S. Navy, retired) The major elements for the establishment and implementation of a sound United States policy, concerning the maintenance, operation, sanitation and defense of the U.S. Canal Zone and Canal, situated in the Isthmus of Panama are : (a) Continued undiluted sovereign control of the Zone by the United States, and (b) the major modernization of the existing Canal through the comple- tion of the temporarily suspended Third Locks Project, adapted to include a Pacific summit level terminal lake. All other matters, however important, are relatively secondary in character. In order promptly to initiate this compelling policy, the present ill-advised negotiations with Panama for a "new" Panama Canal Treaty should be brought to a close, in as amicable a manner as possible, recognizing the colossal blunders which have thus far been committed by both the United States and Panama. At the same time, Panama should be brought to understand that the moderniza- tion program should be completed at the earliest possible time and that it (a) needs no new treaty, the existing treaty rights of the United States being fully (415) 416 adequate to complete the program, and (b) ^vill bring to Panama massive economic benefits, since the cost of the modernization program will be upward of $1.5 billion, much of which will, of course, be spent in Panama. The Canal must be kept under the sovereign control of the United States : (1) Because it is not only vital to the security of our people and the people of the whole Western hemisphere ; but, because its continued operation, exclusively ])y the United States, is essential to its survival as a free and independent nation; and (2) to fulfill our global treaty-based obligation under the Hay- Pauncefote Treaty of 1901 to operate the Canal in the interest of world shipping, wirhout discrimination at reasonable rates, in accordance with the terms of the Constantinople Convention for the Suez Canal. The Canal cannot be successfully operated by a small technologically under- developed country, nor by one with inadequate financial competence, like Panama. Xor can the Canal be operated successfully in partnership with any other nation. Such an arrangement would prove in practice to be impossible and per- haps even disastrous. The Canal must be kept in operation by only one fully competent country, and that is the United States, unless the Canal were to fall into the hands of Soviet Russia which has been its design from the beginning of its existence. The overriding question is whether the Caribbean-Gulf of Mexico sea area is to be reestablished and maintained as a vital United States national defense asset, or whether it is to become in its totality a Red-based area further to facilitate an invasion into the United States via its soft underbelly between Texas and Florida. President Ford, less than nine years ago, on April 8, 1967, while he was House Minority Leader, wrote a letter to Dr. Donald Marquant Dozer, Republican Central Committee of Santa Barbara County, California, in which he said : "We must protect our own national interests in the Canal Zone and through- out the world. I have expressed publicly my concern about the communist threat to the canal under lessened American authority. "The Congress cannot ignore its responsibility to the American people as it examines and evaluates the decisions of the President in this matter." Three months later, on July 7, 1967, House Minority Leader Ford, after read- ing parts of a new proposed Panama Canal Defense Treaty which had been negotiated by the Johnson Administration, obtained by the Chicago Tribune, while it was still under secrecy wraps, declared that the American people would lie "shocked" at its surrender terms. The Tribune, on the next day, July 8, 1967, imblished the story on its first page, under a glaring headline: Canal Pact Shocking : Rep. Ford," and subtitled : "Strengthens Red Threat, Leader Says." It quoted Minority Leader Ford as having said that "with Cuba under the con- trol of the Soviet Union via Castro and increased communist subversion in Latin America, a communist threat to the Canal is a real danger." The situation with respect to communist infiltration into the Caribbean-Gulf of Mexico area is far worse today than it was at that time. Senator Strom Thurmond (R-S.C), to whom the Chicago Tribune furnished copies of the Johnson Administration treaties, read them to a shocked Senate. The Tribune quoted Senator Thurmond in its July 8, 1967 article as follows : "The Communists first announced their intention to overthrow United States control of the canal as early as 1917. They have never lost sight of that goal. After last month's mid-East crisis, the Soviets repeated their demand that all strategic waterways be put under 'international' control. Yet that same crisis, and the shutdown of the Suez Canal by Egypt demonstrates how important it is to freedom that the Panama Canal remain in strong and responsible United States hands." The Tribune article then reported as follows : "Thurmond said The Tribune's revelations raise some key questions about the treaties. Among the questions that must be asked, he said, are the following : 1. Do the new treaties provide for undiluted control and operation of the canal by American authorities? 2. Do the new treaties protect the investment of 4.9 billion dollars made by United States taxpayers between 1904 and 1966? 3. Do the new treaties put American and free world interests ahead of passing considera- tion of Panamanian politics? 4. Do the new treaties provide for a defense agree- ment which would provide protection equal to that the United States now enjoys? "Thurmond said the Johnson administration has not yet presented the slightest case demonstrating the need for new treaties. He said he would use the text revealed by The Tribune to fight the treaties until they are provided to members of the Senate shortly before the ratification debate. 417 *• 'These treaties justly ought to go down in history as the Johnson treaties,' Sciid Thurmond. 'President Johnson initiated them, and is responsible for their contents. If they are approved by the Senate, a profound change will come over the operation of the canal. " 'The President may well be judged in future generations by the soundness and workability of a new and untested concept — the concept of whether the canal can still serve United States interests if it no longer is operated under the direct control of our nation.' " The furor caused by the publication of the treaties by the Chicago Tribune and their exposure by Senator Thurmond was so great that President Johnson did not submit them to the Senate for consideration for ratification, and they were rejected by the government of dictator Omar Torrijos in 1970, notwith- standing that they were lavishly beneficial to Panama in their terms of sur- render by the United States. Notwithstanding the debacle of the Johnson Administration's attempt to nego- tiate new Panama Canal treaties, President Nixon reestablished negotiations with Panama during 1971 ; and nothing much in the way of progress took place until 1973, when Ellsworth Bunker was appointed U.S. ambassador and chief negotiator. Thereafter, on February 7, 1974, Secretary of State Kissinger initi- ated the joint statement with Juan Antonio Tack, Minister of Foreign Affairs of the Republic of Panama in Panama City, covering eight principles to serve to guide the negotiators in the effort to conclude proposed new treaties. President Ford took office on August 9, 1974. In an article in the Washington Post on May 19, 1976, titled : "Panama : Ford Gave Pledge," it is stated in the first paragraph as follows : "The day Gerald Ford was sworn in as President, he assured Panama's Gen. Omar Torrijos in writing that the treaty talks would continue under the 1974 guidelines that call for the eventual transfer of the Panama Canal to Panama and elimination of a permanent U.S. interest in it, according to a member of the Panamanian negotiating team (Carlos A. Lopez- Guevara). The Panamanian official said the assurance was contained in a letter to Torrijos delivered by Ambassador Ellsworth Bunker, head of the U.S. negotia- tors." Ambassador Bunker, on April 7, 1976, during hearings before the Panama Canal Subcommittee of the Committee on Merchant Marine and Fisheries, House of Representatives, testified that President Ford had on several occasions in writing specifically directed the State Department on the conduct of the current treaty negotiations with Panama. These intensive activities by President Ford in furthering the negotiations on new treaties with Panama raise serious questions, when compared to his vehemently expressed opposition to the Johnson negotiated proposed treaties, especially in view of the greatly increased communist activities in the whole Caribbean area. Opponents of the current treaty negotiations, since they involve surrender to Panama of the people's sovereignty over the Canal Zone and Canal, are con- vinced that the present negotiations should be terminated, and that the Govern- ment of the United States should maintain and protect its sovereign rights and jurisdiction over the canal and zone, and should in no way cede, dilute, forfeit, negotiate, or transfer any of these sovereign rights, power, authority, jurisdic- tion, territory or property that are indispensably necessary for the protection and security of the United States and the entire Western Hemisphere. Thus, from its very inception, the Ford Administration has been fully com- mitted to an unauthorized and abject surrender of the sovereign rights of the American people over the Canal Zone. Under our system, sovereignty resides in the people ; not in the President, nor in the Congress, to be negotiated away without their consent. Several national polls indicate that more than 80% of our people oppose sur- render of U.S. sovereignty over the Canal Zone. 38 Senators and 164 members of the House have co-sponsored resolutions against surrender, and the number in both Houses is somewhat greater, especially in the House where substantially more than a majority oppose surrender. Ambassador Bunker, in liis address to the World Affairs Council, Los Angeles, California, on Dec. 2, 1975, said : "No effort to improve our policy concerning the Canal can succeed without full understanding and support of the Congress and the American people." Even had no political controversy concerning surrender to Panama taken place, the State Department's hope to persuade a majority of our people to support its proposed surrender plan would have failed ; now the num- ber of opponents has grown considerably and their opposition has solidified, until 418 it is now evident that no amount of persuasion could result in support of the State Department's blueprint of surrender. The Ford Administration's blueprint for surrender was exposed on October 6, 1975 by Rep. Daniel Flood, one of the nation's foremost authorities on canal matters, when he placed in the Congressional Record for all to read the exact texts of three "Conceptional" treaties negotiated in Panama by U.S. Ambassador Ellsworth Bunker with representatives of the Marxist government of Panamanian dictator, Omar Torrijos. The same three proposed treaty drafts were placed in the Congressional Record in the Senate by Senator Helms (R-N.C). Not one word as to these startling disclosures appeared in the news media. Had even one large newspaper or one radio-television network given this dis- closure the coverage to which it was entitled, the result would have shocked the American people in the same manner and to the same degree as did the exposure of the Johnson Administration's proposed surrender treaties by the Chicago Tribune in 1967. Not only is President Ford's determination to "giveaway" this valuable United States strategically essential national defense asset ill-advised, dangerous and unjustified ; but, under Secretary of State Kissinger's insistence last fall, through the National Security Council, the President silenced the Joint Chiefs of Staff from expressing any opposition to the Administration's plans to the Congress, and thus to the American people. To further its surrender plans, our State Department would have us believe that the Canal Zone is really Panamanian property ; that the U.S. pressured Panama into giving us the Canal Zone in 1903 ; and that the U.S. is exploiting Panamanians, robbing them of Canal operating profits that are rightfully theirs. The truth is that the United States never has been, and certainly is not now, a squatter occupying the Canal Zone. Instead, it is the Canal Zone's lawful owner, with full sovereign rights, power and authority over the Canal Zone and the Canal, established in three treaties with Panama, the 1903 treaty and its re- visions in the treaties of 1936-39 and 1955, and twice, in 1907 and 1972, so recognized by the United States Supreme Court. These sovereign powers were first properly acquired in the 1903 treaty from Panama — a treaty urged upon the United States by those who led Panama to her independence from Colombia, for the very purpose of establishing the Canal in their country, rather than to have it go through Nicaragua, then seriously under consideration in the United States Congress. Sovereignty is supreme and independent power as opposed to dependent and conditional power. In order to make the tremendous investment required to build the Panama Canal, the United States had to have authority to do what was necessary and to insure the security of its investment. It received sovereign powers from Panama by treaty, paying Panama and paying all individual owners for the land and property acquired in the Zone. It received these sovereign powers in perpetuity. Nothing of Panamanian ownership was left within the Zone. This is a United States Canal, not a Panamanian canal. The United States has operated it not as a trustee for Panama, but as trustee for the world com- merce served by the Canal, although Panama is by far the greatest single beneficiary. Through the years, the United States has sought to maintain good relations with our Panama neighbors. We have, through treaties, increased dollar payments to Panama, have returned outlying land and easements, considered by the United States no longer required for the defense of the Canal, and, in mistaken gestures of friendship, we have authorized the flying of the flag of Panama alongside the United States flag in the Canal Zone. Panama received in 1974, directly or indirectly, from the United States as the result of Canal operations, more than $236 million, an annuallv increasing amount. It received $342 million in foreign aid from the United States for the years 1947 through 1974. All of this, resulting solely from the Canal presence, gave to Panama with its population of about 1.63 million people, about the size of Detroit, the highest per capita income of any nation in Central America and one of the highest in Latin America. Within the past decade, with the intensification of Marxist revolutionary ac- tivity throughout Latin America, the Government of Panama has mounted a campaign to have the United States give up its sovereignty in the Canal Zone. In January, 1964, costly rioting in Panama was accompanied by Red-led mob attacks on the Canal Zone. Canal service was not interrupted because United States forces in the Zone were able to repel the attacks. 419 Some high United States oflScials have argued that the United States can give up its sovereign powers and return the Canal Zone to Panamanian jurisdiction, keeping by treaty only the right to operate and defend the Canal. They ignore history and the realities of world power. If the United States were to give up sovereignty and depend upon a treaty to support its presence in the Isthmus of Panama, it would merely have tlie same type of insecure status which Britain had before it was evicted from the Suez Canal. Were we to surrender our sovereign power over the Canal Zone, the Soviet Union would be glad to negotiate a new treaty with Panama to provide for the operation and defense of the Canal, under Soviet control. And who, ex- cept the sovereign has a right to decide how this territory will be defended? The Canal Zone is the United States Canal Zone, bought and paid for by the United States. The proposition that a sovereign who alienates his territory has a "right" to take it back is legal nonsense. In London, on BBC, March 1, on the Buckley "Firing Line" program, while being interviewed by very distinguished British journalists, including Malcolm Muggeridge, Aleksandr Solzhenitsyn said : "There was a time at the beginning of the Fifties, when nuclear threat hung over the world, but the attitude of the West was like granite and the West did not yield. Today this nuclear threat still hangs over both sides, but the West has chosen the wrong path. You can be taken simply with bare hands. Why on earth, then, should one have nuclear war? If you have raised your hand and are giving in, why have nuclear war? They (Soviet Russia) will take you, simply like that, without nuclear war." Waiting in Le Monde, May 31, 1975, Solzhenitsyn said : "The victorious Western nations have transformed themselves into vanquished nations, having ceded more countries and peoples than have ever been ceded in and surrender in any war in human history. That is why it is not speaking metaphorically to say : The Third World War has already taken place and has ended in defeat. . . . Two or three decades of peaceful coexistence (or detente I might add) as glorious as the last ones and the very concept of the West will vanish from the face of the earth." On the opening day of the present session of Congress, Assistant Senate Ma- jority Leader, Robert Byrd said : "Everywhere I look America is in retreat." It certainly is ! The reality is that the United States must continue to operate and defend the Canal and that sovereignty in the Canal Zone is essential to the perform- ance of that task. Panama's sovereignty is untrammeled in its own jurisdiction, just as that of all other countries. When it casts covetous eyes on the United States Canal Zone, we must have leaders with the courage and vision to reply to demands for weakening our sovereign control over the Zone territory with always a resounding "No !" The strongest substantive reasons support the necessity to terminate the pres- ent negotiations and to substitute for them the competition of the modernization program in the best interests of all concerned. Such action will also serve as the catalyst for a return of competent national leadership, and the restoration of the national will, so needed for the future security of our country. EXCERPTS FROM THE CONGRESSIONAL RECORD HOUSE [From the Congressional Record, Sept. 12, 1977 — E5490] The Canal Zone — Panama and the United States (By Hon. George Hansen of Idaho) Mr. Hansen. Mr. Speaker, the Panama Canal question is one of grave con- cern to all Americans. The occurrences of the next year will make an impact on American history for generations to come. For the benefit of my colleagues and all interested Americans I submit for the Record a copy of a recent study by the Heritage Foundation of the Panama Canal question. The Heritage Foundation is a local nonprofit organization noted for their careful and concise studies of major questions facing America today. I highly commend this article to my colleagues as a very reliable and concise study of the Panama situation. The article follows : The Canal Zone — Panama and the United States I. bbief historical background Early interest Almost two centuries ago there was evidence of multi-national interest in the construction of a connecting waterway through central America. Spain had con- templated building a canal across the isthmus as early as 1814, but the Spanish imperial power collapsed at about that time and the construction was never be- gun. Both the United States and Britain expressed interest in a canal either across the isthmus, or through Nicaragua. In 1878 a French company attempted to build a canal across the isthmus, but beset by graft, tropical diseases, and engineer- ing problems the enterprise went twice bankrupt and finally collapsed in 1887. The river canal through Nicaragua begun the same year by American entrepre- neurs went bankrupt three years later. The Spooner Act of 1902 authorized the United States to negotiate with Co- lombia for a canal route, and if the negotiations with Colombia failed, to nego- tiate with Nicaragua. The Spooner Act mandated the President to obtain per- petual control of the necessary territory. Negotiations with Colombia led to the Hay-Herran Treaty of 1903. That treaty included a concession of 100 years, re- newable at the option of the United States. During the time of negotiations Colombia was being pressed by revolution- aries. In a state of siege, the government was administratively disorganized and in financial straits. Colombia was anxious to have the canal as a source of reve- nue which could aid its recovery. Moreover, there existed the possibility that if the canal were not built through the isthmus of Panama, the province of Panama might well revolt. Colombia's negotiator with the U.S. wrote to the head of his government : * * the Panamanians . . . will never willingly submit to the opening of the canal in any other place than at the isthmus. They understand very very well that the adoption of the Nicaragua route will be moral material ruin of Pan- ama ; and this sacrifice, which will have no compensations, may very well prove superior to the concept of a platonic patriotism." The Hay-Herran Treaty of 1903 was ratified by the U.S. Congress, but during the seven months between the end of the civil war in Colombia (November, 1902) and the meeting of its congress (June, 1903) a number of the Colombian objections to the treaty arose and the Colombian congress never ratified it. With the failure of this treaty, the United States prepared to negotiate with Nicaragua in accordance with the Spooner Act. Creation of Panama From the beginning Panama was geographically and psychologically sepa- rated from the rest of Colombia by the mountainous terrain. Since Colombia's independence from Spain there had been several eruptions of Panamanian dis- content in an effort to establish an independent Panamanian state. Panamanians (423) 99-592—78 28 424 were fairly vocal in warning that should Ck)lombia fail to ratify the treaty, rebel- lion would result on the isthmus. Not quite three months after Colombia's re- jection of the treaty, Panama declared its independence in a virtually bloodless coup.^ Colombia agreed to recognize the Republic of Panama in return for an indemnity of $25 million, special transportation privileges, and a U.S. apology. The apology was never forthcoming. Acquisition of zoiie Shortly after its declaration of independence, the provisional government of Panama offered to the U.S. what is known today as the Hay-Bunau-Varilla Treaty of 1903. This treaty incorporated the Hay-Herran treaty but also widened the Zone to ten miles and more clearly stipulated American sovereignty over the Zone. It contained a sovereignty clause which granted the U.S. "all rights, power and authority within the 2k)ne * * * which the U.S. would possess and exercise as if it were the sovereign of the territory within which said land and waters are located to the entire exclusion of the exercise of the Republic of Panama of any such sovereign rights, power or authority." The treaty was amended in 1936 and in 1955, but the sovereignty and perpetuity clauses have not been disturbed. Further, in addition to acquiring the Zone by treaty, the United States paid Panama $10 million as "price or compensation" plus $250,000 annuity (raised first to $430,000 and currently at $2,328,999).^ Private claims were bought at fair market value (set by a U.S.-Panama Joint Commission). Property transfers in addition to private titles and claims include property in Panama City and Colon (1943) — $11,759,956; water system in these two cities— $669,226 ; and 1955 Treaty transfers— $22,260,500 ^ II. IMPORTANCE TO THE UNITED STATES AND TO THE WESTERN WORLD Economic importance The Canal is important to the United States and to the entire free world ; to close it would cause considerable dislocation in the economies of the Western World. For example, an average of about 70 percent of all cargo sent through the Canal either originates in or is bound for the United States. Japan sends about one-third of its oceanic trade through the Canal, and when viewed in terms of specific trade patterns * curtailment of its use of the Canal could bring economic disruption not only to Japan but also to the United States and the rest of the Western world. Great Britain is consistently second or third largest user of the Canal, with over 60 percent British-registered shipping crossing the oceans via the Panama Canal. For Latin American countries, the trade through the canal is quite significant. The trade in particular between the countries of South America's West Coast and the Gulf and East Coast states of the United States relies heavily upon the use of the Panama Canal. For example, Nicaragua, El Salvador, and Ecuador send respectively 55.1 percent, 68.1 percent, and 72.4 percent of their oceanic trade through the Canal. Countries such as Australia and New Zealand relay on the Canal to reach vital European markets. All have a keen interest in the smooth and indiscriminatory operation of the canal. It is not only the volume of trade passing through the Canal, but its diversity which is also an important factor in the significance of the Canal. The diversity 1 A transisthmanian railroad had been constructed by private American interests during 1850-1855. Uprisings in this area occurred from time to time and on at least seven different occasions the United States had sent in troops to protect free transit on the rail route, with Colombian consent. When Panama declared its independence, the rail- road, adherinpT to a neutral position, refused to transport Colombian troops attemptinsr to suppress the rebellion. U.S. Naval forces were on hand to prevent more Colombian troops from landing. Only one death resulted. a Not rent, as sometimes alleged, but rather payment to cover a loss of the annual franchise payment to the Panamanian Railroad as a result of American acquisition of sovereignty. a Compare : Million 180.S Louisiana Purchase <5n O 1821 Florida Purchase Zlirillllir 6 7 1848 Mexican Cession, including California 1.^' o IS.^.S Gadsden Purchase 10 1867 Alaska Purchase 7] 2 * Coal and coke shipped from Hampton Roads through the Canal to .Tapan. and back again through the Canal as steel, automobiles and ships ; also shipments to Brazil, where .Japan has a sizable market, and to Western Europe. 425 ()f the trade passing through the Panama Canal can be contrasted with that going through the Suez Canal — chiefly oil — and for that reason too, disruptions in economies would be more severe if the Panama Canal were to be inoperative than were the Suez to be closed. Not to be overlooked is the amount of fuel saved by each ship in avoiding the additional 6,000-mile journey around the Horn. In sum, continued access for all countries, and at reasonable rates, is impor- tant to the economies of the entire Western world. For these reasons the issue of a new treaty is to be viewed as broader than a U.S. -Panama, or U.S. -Latin American concern. Military importance The military importance of the canal can be easily recognized when it is realized that the distance around the Horn represents several weeks of additional sailing time when compared to the route across the isthmus. Our modern Navy stresses smaller, speedier ships, nuclear power, and independent missile capa- bility. The Panama C^nal is an important aspect of our assurance of speed and mobility. Except for the large aircraft carriers, our Naval fleet can travel through the Canal, thus allowing our Naval planners a great deal of flexibility and versa- tility. Without the use of the Canal, the United States would need a larger ("two-ocean") navy, larger storage and liarbor facilities on both the East and West Coast, and provide additional merchant ships and escorts and fuel, luterocean mobility would be threatened, both for the United States and for our allies. ni. BENEFITS TO PANAMA Income generated by the Canal make a large contribution to the Panamanian economy. During 1976 it included over $29 million generated in direct purchases in Panama by U.S. government agencies ; over $108 million in wages to non-U. S. citizens employed in the Zone; expenditures in Panama of U.S. employees of over $39 million ; and an annuity of over $2 million. The United States has con- tributed substantially in various ways to Panama's well-being. Construction of the Canal encouraged a large infusion of capital and employment ; U.S. health officers' battle against yellow fever transformed the Zone as well as Panama City and Colon from a tropical graveyard into a relatively healthful location; U.S. constructed and maintains the Transisthmanian Highway ; and is constructing the Balboa Bridge. The United States has also contributed to various technical and special assistance programs, and U.S. private investments amount to about 50 percent of private capital invested in Panama. Numerous special assistance programs have been instituted for the benefit of Panamanians, such as cooperative education programs, apprenticeship programs, office service intern programs, leadership programs, and Latin American student assistant employment programs. In 1975, U.S. economic aid to Panama amounted to $21.8 million. During 1976, total payments and income flow to Panama generated by the Zone amounted to $243.2 million. With a population of only two million, it can easily be seen why per capita income is the highest in Central America. IV. TOWARD A NEW TREATY Demonstrations In 1960 President Eisenhower allowed some Panamanian students attending school in the Zone area to fly the Panamanian flag beside the American flag and in this manner encouraged the Panamanians to believe that they did have some sovereignty within the Zone. This act clearly violated the 1903 treaty. Moreover, the House reflected this view by passing by a 382-12 vote a resolution opposing display of the Panamanian flag on U.S. Canal Zone territory. This unwarranted and arbitrary indication that the United States did not have complete sover- eignty over the Zone encouraged further demands by the Panamanians for some control over the Zone. In January, 1964, extensive rioting took place in conjunction with a further dispute surrounding the flying of Panamanian flags in the Canal Zone. The Panamanians did little to restore order and before the rioting ended, four Americans and eighteen Panamanians were killed and $200 million in property damage took place. Limited American force was used to help restore order and Panama broke off diplomatic relations and charged aggression against the United 426 States before the Organization of American States. At the time President Johnson stated that "* * * violence is never justified and is never a basis for talks." But in September he announced the United States would engage in negotiations with the Panamanian government. Kissinger-Taclc principles The basic concepts of the Joint Statement between the U.S. and Panama were established by President Johnson after the Communist-inspired riots of 1964. Offered as a panicked response to a manipulated crisis, the concepts are now offered as a permanent solution. These principles have served as the basis for discussion regarding the new treaty. In brief, they are as follows : 1. The treaty of 1903 and its amendments will be abrogated by the conclusion of an entirely new interoceanic canal treaty. 2. The concept of perpetuity will be eliminated. The treaty concerning the lock canal shall have a fixed termination date. 3. Termination of United States jurisdiction over Panamanian territory shall take place promptly in accordance with terms specified in the treaty. 4. The Republic of Panama shall be the sovereign over the Panama Canal Zone. During the life of the treaty, Panama shall grant to the United States the right to use the lands, water and airspace necessary for operation, maintenance and defense of the Canal and the transit of ships. 5. Panama will have a "just and equitable share" of the benefits derived from the operation of the Canal in its territory. 6. Panama shall participate in the administration of the Canal and will have total responsibility for the operation of the Canal upon the termination of the treaty. Panama shall grant to the United States the rights necessary to regulate, operate, maintain and protect the Canal, and to take specific steps related to those ends as agreed upon in the treaty. 7. Panama shall participate with the United States in defense of the Canal. 8. There shall be bilateral provisions for new projects to enlarge and improve the Canal. These shall be incorporated in the treaty. Summary of major argumenis In favor: 1. The United States is entering upon a new era in its dealings with Latin America, and, indeed, with the entire underdeveloped world. Secretary Kissinger spoke of a "new dialogue" with Latin America. The trip to Central and South America by the First Lady indicates President Carter's strong interest. Many of the regimes are nationalistic, militaristic and socialistic to an unprecedented degree. They are more confident of themselves and can no longer be counted on to support the United States as they did in the past. Even our closest allies in Latin America publicly favor a revision in the status quo. They support Pana- manian aspirations and will judge the United States by how we respond. 2. The situation, as it now stands, is potentially violent. There have been riots and demonstrations in the past. The Panamanian government has served notice that it will become a "thorn" to the United States if a submitted treaty is re- jected. Panamanian Ambassador Gabriel Lewis, for example, warned that if the negotiations fail, there will be such a storm of protest that the U.S. "will have no other alternative than to let it (the Canal) go." Violence could disrupt transit and make it politically embarrassing for 'the U.S. to continue to cling to the Canal. Even if sufficient forces were brought in to give full protection to the Zone, a single saboteur could still succeed in closing the Canal. A new treaty, by foster- ing a friendly relationship with Panama, is most conducive to protecting U.S. interests in a free and open Canal. 3. During the life of the treaty the United States would retain primary respon- sibility for the operation and defense of the Canal. Gradually during this period Panama will assume more operational responsibility until it has the necessary expertise to assume full control. This time period will be at least twenty years ; certainly long enough for Panamanians to learn how to operate the Canal. The transition phase, likewise, means that it would not be until the year 2000 that the U.S. retires as the principal party in the defense and operation of the Canal. This provides a considerable length of time to prepare all the parties concerned, both in Latin America and elsewhere, on the implications of the new relationship. 4. During the life of the treaty the United States will retain its base rights (although they will probably be reduced in number) and will retain its rights to intervene militarily. Furthermore, there is a proposed second treaty to be signed 427 by other nations, guaranteeing the Canal's open and nondiscriminatory usage after Panama takes control. This document would also give the United States the right to intervene if the Canal became threatened or if access should be denied. 5. Panama has an economic self-interest in keeping the Canal operative; it derives more income from the Canal than from any other source. Opposed : 1. The United States has a legal right to remain in the Canal Zone "in per- petuity" and as "if it were sovereign'' according to the 1903 treaty with Panama. The United States acquired the Zone by treaty and also by direct purchase, it has operated it evenhandedly for all nations since it was first opened in 1914. The decision of the Supreme Court in the 1907 Wilson v. Shaw case held that the United States has legal sovereignty and ownership for the purposes enumerated in the 1903 treaty.^ This ruling was reaffirmed in 1972. 2. To relinquish the statutory right to remain in the Zone amounts to a classic giveaway, opposed by a majority of the American public.^ The building of the canal is an American achievement which amounted to the technological ''moon- shot" of its time, and which has remained a testimony to American creativity and ingenuity. 3. The Canal has great importance for U.S. military and economic policies. A significant amount of total U.S. trade passes through its locks. Although our aircraft carriers are too large to transit the Canal, all other naval vehicles can. In limited war situations such as Korea and Vietnam the Canal has great im- portance for both supply and military vessels. The necessity for the United States to maintain absolute control over the operations and defense of the Canal is even more evident during emergency or crisis situations where quick response and unquestioned access are necessary. 4. Although all Latin American nations have publicly called for a new treaty, there is ample reason to believe that this is more of a pro forma diplomatic stance taken out of necessity rather than conviction. If the United States relin- quishes the Canal, our power and standing both in Latin America and through- out the world would diminish. This is particularly the case in the light of recent U.S. retreats from other areas of the world. A Canal treaty seen in this perspective, would be interpreted as another example of the continued erosion of American will power and influence. 5. Panama is a weak and unstable country controlled by a nationalist dictator known for pro-Communist sympathies. General Torrijos is on excellent terms with Fidel Castro and he has on several occasions deliberately embarrassed the United States in front of "third world" audiences. There is the possibility that in the hands of Torrijos the Canal might fall under Communist influence, or that the United States might be denied access. Almost certainly tolls would rise dramatically. In short, once the United States relinquishes control, it will be subject to the intentions and capabilities of Panama's dictator, none of which can be fully anticipated. 6. Torrijos' regime has been a consistent violator of human rights inside Panama. In light of President Carter's emphasis on human rights, especially since that issue has taken on important symbolic and concrete meaning through- out Latin America, the United States would be guilty of bold hypocrisy in relinquishing the Canal. 7. Over the last decade the Soviets have made monumental strategic gains at the expense of the West. The Kremlin has moved into a number of power vacuums during this time and is expected to attempt to gain control over the Canal, either remotely or directly, should the United States relinquish its treaty rights. The Canal is seen as a vital "choke point" in part of a global power struggle directly related to the security of the United States and the West. In fact, the Soviets, who do not even have diplomatic relations with Panama, have recently concluded tentative economic and commercial agreements with Panama. It is fully expected that the Soviets will move to supply engineers to operate the canal lock system as a preliminary move toward further influence over operation and control of the canal as the Americans withdraw. 5 Wilson V. Shaio, 204 U.S. 24, 1907. "This new republic (Panama) has by treaty granted to the U.S. rights, territorial and otherwise ... It is hypercritical to contend that the title of the United States is imperfect, and that the territory described does not belong to this nation, because of the omission of some of the technical terms used in ordinary conveyances of real estate." « Opinion Research Corporation poll conducted May, 1975, 76 percent answered "no" when asked "Should the U.S. give up its sovereignty over the Panama Canal?" 428 V. SPECIAL I^'TERESTS U.S. banks Maintaining the favorable climate for international banking currently enjoyed in Panama is one major reason cited by those who allege that the rush toward a new treaty is propelled by special interests. In 1970, Torrijos reorganized the country's banking laws to allow international banking transactions free of taxation, together with other advantages, which resulted in the unprecedented expansion of the banking industry in Panama. Today, it is alleged that those institutions, having provided loans to Panama's sagging economy, favor a new treaty with increased annual payments in order to insure that Panama will be able to repay its debts to these institutions. It has been noted that the chief co-negotiator of the new treaty, sits on the board of directors of a bank that has made a number of risky loans to Panama's troubled economy. This situation has raised questions of possible conflict of interest among the Congress and the public. It is noteworthy in view of these facts that Mr. Linowitz's appointment was a special short-term appointment of only six months, thus precluding the opportunity for the Senate to question him regarding possible conflicts of interest through the formal procedure of advice and consent. The rush toward agreement to the broad treaty concepts came just hours before the Linowitz appointment expired. Panama economy Economic conditions in Panama have grown steadily worse over the years. Panama's indebtedness has grown from $167 million when Torrijos took power to approximately $1.5 billion currently. It is estimated that debt service alone will consume 39 percent of that country's budget this year (compared with 7 per- cent in the United States), and Panama's Department of Planning indicates that to refinance loans coming due, together with the deficit of $198 million, will require a total of $323.6 million. A document from the Department of Planning for Pan- ama states (in translation) that "* * * it will be extremely difiicult to syndicate loans with the commercial banks in the amounts previously mentioned * * *."' Also, "* * * the relation between servicing the debt, and current revenues * * * suggest a deteriorating capacity to service this debt * * *." A confidential memorandum sent last October by the U.S. Embassy in Panama to the U.S. State Department implies that the increase in commercial loans has made the situation worse, and "permit Panama to defer grappling with the core problem * * *," It states further that "much of the capital inflow of the past three years has aggravated Panama's economic malaise by exacerbating its debt service burden without enhancing overall productivity." The financial situation has been aggravated by government measures which result in pricing Panama's exports out of the world market, through imposition of minimum wage, price supports, and rent control.^ In light of the above, the timely and generous financial arrangements arrived upon this week will be cmcial to Torrijos in shoring up his sagging regime. He had originally requested a payment from the Unite{l States of $5 billion, together with an annuity of $300 million until the year 2000 : he was persuaded to accept the current figure of about $50 million per year, plus a generous military and economic aid package of approximately $350 million. VI. CONGRESSIOXAL APPROVAL The Administration is aware that it will have a diflJicult time in persuading the Senate to ratify the new treaty, and the American public to accept it. According to Congressional leaders, current count in the Senate is around fifty favorable votes, with a total of sixty-seven needed for approval. Polls indicate that the majority of the American public opposes any treaty which relinquishes sover- eignty over the Zone and control of the canal.^ Although ratification will be difficult, the next few months are viewed as more favorable for proponents than the months approaching, or during, 1978, which is an election year for one-third of the members of the Senate. In addition, the fact that the agreement was reached at a time when Congress is not in session is seen as advantageous in diminishing the possibility for protests from Members of " See Congressional Record, February 22, 1977, page S2S20. 8 See "The Cannl Treaty : Words of Caution," by Charles Maechling, Jr., The New York Times, Monday, August 8, 1977, p. C23. 429 Congress. Further, most of the comprehensive package of payments to Panama is presented in a way which would not require Congressional action, reducing the possibility for friction and disagreement with that body. Ratification of a new treaty is effected by agreement of two-thirds of the Senate. However, the House of Representatives is also expected to participate m the debate on the broad package of proposals designed to relinquish the Canal, as disposition of U.S. territory and other property of the United States is involved ; Article IV, Section 3, Clause 2 of the United States Constitution pro- vides that only tJie Congress has the authority to dispose of ''the Territory or other Property belonging to the United States." As one Member of Congress warned upon hearing of the conceptual agreement : "The House will not abide by an agreement which unilaterally relinquishes U.S. Territory, nor will the House abide by back-door loans and grants to Panama made without its consent." VII. CONSEQUENCES Two interrelated considerations should be examined as the terms of the actual treaty are studied. The first is the necessity for the Canal to remain open at all times to international shipping. The second is to assure American sovereignty until the turn of the century when the property and territory would be ultimately relinquished. Currently, two treaties govern the status of the Canal. The Hay-Bunau-Varilla treaty of 1903 discusses the rights of the United States and is described earlier. The Hay-Paunceforte treaty of 1900 is between the United States and Britain wherein the United States pledges to keep any canal across the isthmus free and open to all nations, without discrimination. Panama has no such obligation, and would not be hindered from either denving transit or imposing discriminatorv tolls. Secondly, the proposed new treaty would require the gradual ceding to Panama of control over the operation of the Canal. However, any comprehensive transfer of jurisdictional rights before the turn of the century could be interpreted as a ceding of sovereignty. With sovereignty prematurely divested (either by impli- cation or otherwise) it would not be difficult to harass the United States on every matter not specifically dealt with in the treaty. If sovereignty is to be trans- ferred over a period of time, it should occur at the conclusion of the agreement.® Should sovereignty be prematurely relinquished under the new treaty, the power of the new sovereign to exist would invite international pressures to that end, and agitation would be encouraged and intensified. The pattern of revolu- tionary turmoil and frequent changeovers in governments indicate that Panama would not be resistant to such pressure. A lesson can be drawn from the Suez Canal, where an ostensibly private com- pany, with British government participation, operated under the sovereignty of another country. Rights retained by the British to protect their property, and the declaration of the Convention of Constantinople guaranteeing right of pas- sage to vessels of all nations were of no avail when Egypt expropriated and later closed the Canal. Similarly, a new treaty with Panama as sovereign would not insure unimpeded passage through the Canal nor would it particularly deter expropriation of the Canal. It is believed that Panama intends to raise the tolls substantially once it controls operation of the Canal. Panama's representatives have made statements to the effect that they would like the tolls to be raised sharply, and that they do not intend to "subsidize" world shipping. With respect to security of the Canal, the control of the Zone is as important as is control over the Canal. The Zone acts as a buffer area for any disturbances which mav occur. This defensive buffer will be lost should the Zone merge into Panama, and the Canal would then be truly indefensible. It is unreasonable to believe that the transfer of sovereignty would remove an irritant and bring about improved relations with Panama and Latin America. In attempting to appease and accommodate hostile ideological elements, the United States ignores a valid lesson of history. pSee "The Canal Treatv : Words of Caution," by Charles Maechling, Jr., The New York Times, Monday, August 8,"l977, p. 023. 430 Worried About A Gr'eawat (By Hon. James Abdnor of South Dakota) Mr. Abdxor. Mr. Speaker, South Dakotans are gravely concerned about what appears to them to be the administration's determination to give away the Panama Canal regardless of any consequences to our Nation. These misgivings have in no way been allayed by the endorsements of Government officials to the press and to congressional committees even before the exact lan^age had been set down on paper. Quite rightly, they are asking: "If this treaty is so good for us, why is the highpowered sales pitch needed?" "Why the rush to sign the treaty when so many Senators, who must ratify it. have expressed opposition?" "What are we not being told?" "Why are we paying Panama so much money for taking the canal?" These are good questions : questions which merit answers. South Dakota's misgivings are reflected in Knowles C. Trippler's recent editorial in the Canova, S. Dak., Herald. It merits careful consideration : To Give Away — Or Keep It One big item of discusion at this time seems to be the Panama Canal. This ques- tion is to be brought to the members of the United States Senate for a show down by President Carter in the near future. A couple of our national leaders made a trip down south not too long ago and came back with an agreement that they thought sounded good and that they thought the United States govern- ment and its people should agree to. It states that the U.S. will give the Canal away in the year 2000. Just what all the stipulations are is unknown at this tim.e for it seems that the Washington "bunch" tells us "common folks" out here in the sticks just what they want us to know. We have not been able to find out where all the squabble on the Canal started or why it came up. There are a lot of people in our country tliat are against this "give away" program, fact is there seems to be a large majority that are against the agreement. In order for this to pass the U.S. Senate it must have 67 votes out of the 100 from the sena- tors. If the percentage of people that are against the agreement at this time have anything to do with it it will not pass, for more than half of the people at this time seem to say "Xo". We have not made up our minds at this time for it is very hard to get all the facts. However we are afraid this would turn out just like too many of our other major political decisions have the past several years. If we give the Canal away and then in a few years some other country, like Russia, steps in and takes it over from them, the same old thing would happen, the United States would have to go down and fight to get back what was ours in the first place. Too many times in the past have the U.S. citizens tried to be a "good fellow" and we ended up in war to settle some matter that could have been avoided by a little bit of diplomacy. A group of South Dakotans are getting out petitions to present to our Senators to state that the people in our state do not want to give away the Panama Canal, not now or never. A slogan that they are using is "we bought it. we paid for it. we built it. and we damned weil intend to keep it. If our country would lose a right to use the Panama Canal or the cost became so large that we could not afford to use it we might be sorry we had given it away to anyone. This canal is very important to the Navy and could become an item of National Security if not available. Many from' both political parties think it sounds like a good deal but we think we people of this country do not "trust" anyone in Washington after many of the shady deals of the past twenty or thirty years. We are against the "give away" until we get more information. When the time comes that we are sure it will be in good friendly hands and operated in a fair manner then everyone will take a good look at the entire program. The Panama Canal Treaty: Questionable Defense Provisions (By Hon. Leo C. Zeferetti of New York) Mr. Speaker, after careful consideration of the recently signed Panama Canal treaty, I have made known my staunch opposition to its enactment. One of my major concerns is the section dealing with our defense of the canal and 431 our use of the waterway should the United States become involved in a military conflict. . . ^, « . V, I am submitting, for the record, a recent article appearing in the September 11 edition of the New York Times, authored by Paul B. Ryan. Mr. Ryan, a retired Nav^l officer, is currently a research associate at the Hoover Institute at Stanford University, and a former desk officer in the Pentagon's division of International Security Affairs, Latin American section. He is also the author of the forthcoming book, "The Continuing Controversy : Panama Canal Diplomacy and U.S. Interests." The defense issue is vital to the future of the Panama Canal; therefore, I wish to share Mr. Ryan's treaties with my colleagues at this time : The Canal Terms, Argued From Different Premises Stanford, Calif. — In his frenetic blitz to gain public approval of the two Panama Canal treaties. President Carter has stressed that he wishes to dispel misinformation by laying out the facts. Thus, he and his chief negotiators, Ells- worth Bunker and Sol M. Linowitz, repeatedly have assured the public that the United States would have the permanent right to defend the canal by sending troops into Panama in time of crisis. Additionally, the White House says that United States warships would have "the permanent right to transit the canal expeditiously and without conditions, for an indefinite period." But does this ostensibly forthright interpretation of treaty terms, which pre- sumably protect vital United States strategic inerests, coincide with that held by Panama? The answer is no, if you listen to its chief treaty negotiator, Dr. Romulo Escobar Bethancourt, who analyzed the treaty's provisions at a news conference in Panama City on Aug. 24. Dr. Escobar's comments were broadcast by radio and subsequently published in the Daily Report of our Government's Foreign Broadcast Information Service. Surprisingly, Dr. Escobar's astonishing views, which directly contradict the White House's, appear to have been given very little publicity or entirely over- looked by the United States news media. Dr. Escobar roundly rejects the Carter Administration's claim that the United States may send in troops. "Tlie treaty does not establish that the United States has the right to intervene [that is, send in troops] in Panama," he said. He denied that the treaty gives the United States the right to decide when neutrality is violated or not. Neither, in his view, do United States warships have the right of expeditious transit without conditions. As Dr. Escobar inelegantly put it : "If * * * the gringos with their warships say, 'I want to go through first,' then that is their problem with the other ships there." Presumably, Panamanian officials would look idly on while United States Navy captains, during an international crisis, haggled with merchant skippers for a place at the head of the waiting line of ships. So much for the United States right to unimpeded transit and the defense of the waterway ! Were there wildly different interpretations known to the United States negotia- tors during the talks? As Dr. Escobar told the newsmen, these points had been thrashed out with the Americans, but Panama had stood firm against their demands. Faced with Panama's refusal to allow "privileged passage," the Americans finally accepted the term "expeditious transit," in order, said Dr. Escobar, to "sell" the treaty to the Pentagon. "Now they [the United States diplomats] could explain that this means privileged passage. Do not believe that we mean that," he emphasized. Placed side by side, Mr. Carter reassuring assessment and Dr. Escobar's belligerent and cynical evaluation present the apparent paradox of two Gov- ernments outwardly reaching an agreement but secretly retaining entirely different perceptions of its provisions. Or is it a case where both negotiating teams assumed that the "real" meaning of the terms could be safely debated after both nations had won ratification from their respective Governments? Plainly, such a treaty is fraught with peril for future United States operations involving canal transits. The danger of jeopardizing the Navy's use of the water- way was apparent to Presidential candidate Carter and he implied as much during his televised debate on Oct. 6, 1976, with Gerald R. Ford. Mr. Carter said, "I would not relinquish practical control of the Panama Canal Zone at any time in the foreseeable future." 432 As a former naval oflBcer, Mr. Carter understands, probably better than most people, the need for the United States to retain such "practical control" to permit its Navy to carry out missions worldwide in support of United States diplomatic policies and strategic objectives. This is particularly true in an era when international tension, as well as mini- wars of the Angola type, are much more likely to occur than an all-out war. In the light of Dr. Escobar's dismissal of United States treaty rights, can President Carter really mean what he says? A poor treaty is worse than no treaty at all, United States diplomacy must serve the national interest, as we have recently been reminded. The Carter Administration should clear up these glaring ambiguities at once. As matters now stand, the American people have no guarantee from Panama for the protec- tion of United States defense and security interests in the Canal Zone. [From the Congressional Record, Sept. 14, 1977 — E55i57] A Fresh Look at the Panama Canal Treaty (By Hon. Robert H. Michel of Illinois) Mr. Michel. Mr. Speaker, most of the commentary on the Panama Canal Treaty has concerned itself with historical references, learned discussions of the Constitution and complicated arguments about international law. I recently read an editorial in the Peoria Journal-Star that looks at the treaty in a different light. Instead of the diplomatic niceties and scholarly allusions we are used to, this editorial deals with the treaty in a commonsense fashion. Omar Torrijos, dictator of Panama is seen for what he is : "a 10-cent gangster." He has learned that if you use the word "socialism" and claim you are doing things for "the Peo- ple" you can shake down Uncle Sam for every cent he has. Indeed you can con him into paying you for taking something you should be paying him for. I found this view of the affair refreshing and awfully close to the truth. Torrijos is a petty gangster disguised as a "leader" — and we have fallen for the oldest con game in the world. It is the old "protection racket." Torrijos has graciously con- sented to take $50 million a year from American taxpayers. In return he has hinted strongly he just may be able to keep his thugs away from the canal. At this point, I want to insert into the Record, "Gangster in the White House," from the Peoria Journal-Star, September 8, 1977 : [From the Peoria Journal Star, Sept. 8, 1977] Gangster in the White House Omar Torrijos in the Oval Office? Being turned into a Latin Hero on TV by a smiling President of the United States? It turns my stomach. I'm prejudiced, of course. I was there when the "revolu- tion" took over that has brought Torrijos to power. I visited the "palace" and met with the goon squad in a setting right out of a Grade B old-time movie. They called themselves "colonels" but there wasn't a real colonel in the room— with the possible exception of myself if you count reserve and retired commissions. They were the Chicago police of the Capone era presiding over a port city about the size of Houston that, thanks to the canal, serves both Atlantic and Pacific shipping. Its industry is chiefly supplying entertainment to sailors on liberty — and its police force (called the National Guard) notoriously got rich shaking down the pimps, prostitutes, drug peddlers and assorted petty criminals. ^ Threatened with reform, they had ousted the newly elected "President" and Congress" and taken over the country. Now, they are in a position to be shaking down everything in the country as a dictatorship, and lately have discovered its easier if you do it in the name of "socialism." The muscle is the same, but you can claim to be using it in the name of "The People." Now, they've graduated. Torrijos calls himself a "general" and is shaking down the United States of America. Now, I don't give a damn about the canal itself, but the fact is we paid for the property and built the facility on it and if they want it so badly, why don't they buy it from us like honest men ? If they made a proposal of a contract for deed purchase, to be paid off in terms of twenty or fifty million dollars a year out of the tolls or out of the Latin con- sortium, that would make some kind of sense. (It would also test the sincerity of all this immense desire we are told about whereby the canal's change of ownership is of such transcendental importance (433) 434 to Latin America. They could demonstrate that in practical terms not just hot air. ) But what are we doing? We are paying them fifty million a year or so until 2000 for them to take it. And the people who cooked up this scheme wonder that the "ignorant public" has trouble understanding it? There is only one reason for a deal where we pay them for it and turn over title both, instead of their paying us for the property if they want it so badly. And if we don't understand it, be assured that everybody in Latin America will — and elsewhere. It's because America has not the will to resist any demands that are accom- panied by two threats; guerrilla war (even from a ten-cent gangster of a minis- cule "nation" against his own only national resource) ; and the allegation "everybody will hate you if you don't do as I say." I don't give a damn about the canal. I'd be tempted to bulldoze it under and give them back their original swamp. But this form of deal proclaims the United States, whatever its wealth and whatever its material "arms" to be a third-class nation where it really counts — in the national will. In that, we are an underdeveloped country. Even tiny Panama, under its police-gangster boss, has more elan than we. You just cannot hide cowardice in the face of petty criminals — at home or abroad — behind a face-saving claim of "moral superiority." Or by pretending they are respectable world statesmen. Or by an upside down deal whereby we sell the canal on contract for deed to them with one switch — we pay them ! — C. L. Dancey. [From the Congressional Record, Sept. 21, 1977 — E5739] An Opponent to New Panama Canal Treaties (By Hon. Robert J. Lagomarsino) Mr. Lagomarsino. Mr. Speaker, I would like to bring to the attention of my colleagues the following testimony by an opponent to the new Panama Canal treaties. At the time of his testimony, on September 15, 1977, the media appar- ently decided it was not of sufficient merit for their coverage, despite the fact that they gave full coverage to statements by advocates of the treaties during committee hearings. This statement was made by Dr. John Wasylik, national commander-in- chief of the Veterans of Foreign Wars of the United States before the Interna- tional Relations Committee, September 15: Statement Mr. Chairman and Members of this Distinguished Committee: My name is Doctor John Wasylik, and my home is in Sandusky, Ohio. As National Com- mander-in-Chief of the Veterans of Foreign Wars of the United States, I am pleased and honored to appear before this distinguished body to share with you our views on the proposed Treaties affecting the Inter-Oceanic Canal and its framework, the U.S. Canal Zone on the Isthmus of Panama. I am accompanied here today by two of my V.F.W. colleagues, Mr. Cooper T. Holt, Executive Director of our Washington Office and Colonel Phelps Jones, USA (Ret.), my Director of National Security and Foreign Affairs. As you may be aware, positions in the Veterans of Foreign Wars are arrived at democratically at our annual National Conventions. Our 78th National Convention was held in Minneapolis, Minnesota during the period August 20-26, 1977. Fourteen thousand delegates, representing more than 10,000 V.F.W. Posts and 1.8 million members were joined by delegates rep- resenting more than 600,000 members of the V.F.W.'s Ladies Auxiliary. Our delegates gave respectful attention to arguments supporting the proposed treaty advanced by the Chief of Staff, U.S. Army, General Bernard W. Rogers, USA, and arguments opposing the treaty as set forth by Senator Strom Thur- mond (S.C.). Following these two thoughtful presentations by two patriotic and dedicated Americans, on Tuesday, August 23d both the V.F.W. and the Ladies Auxiliary delegates were asked by the Chair for an expression of their views. Both groups of delegates voted unanimously to accept Resolution Number 402, "U.S. Sover- eignty Over the 'United States Canal' Located on the Isthmus of Panama." Following this display of solidarity, the Chair gavelled the Convention into order and repeatedly asked if there was anyone there present who desired to speak in favor of the Treaty and assured the delegates than anyone who so desired would be given a courteous and respectful hearing. No one rose to oppose the unanimous views of the delegates. With the Chairman's permission, I would like to read the "Be It Resolved" portion of Resolution Number 402, with the request that the entire Resolution be included in the transcript of these hearings. On the Canal Treaties issue, the heart of our mandate reads : "Be It Resolved, by the 78th National Convention of the Veterans of Foreign Wars of the United States, that : "(a) U.S. operation, control and defense of the Canal are non-negotiable; "(b) tensions relating to the administration of the Canal Zone be resolved on the spot without disturbing present treaty arrangement; "(c) U.S. citizens and employees in the Canal Zone continue to meet their responsibilities under U.S. sovereignty ; (435) 436 "(d) the foregoing iwsition be again communicated to both the President (who in October, 1976 asserted that he would 'never give up complete or prac- tical control of the Canal) and the Ck)ngress ; "(e) the Panama Canal Zone send to the Congress of the United States a delegate such as is done in Puerto Rico, the District of Columbia, and the Virgin Islands ; and "(f) the proposed treaty being put forward by the Carter Administration be defeated in the 95th Congress." This is where we stand. Now why do we hold so resolutely to this view? In the first instance we are totally unpersuaded both by the assumptions which led the the treaty negotiations and by the proposed treaties which emerged from these negotiations. Since August, 1914, the United States Canal on the Isthmus of Panama has been responsibly operated and defended to the benefit of the United States, the International shipping community, Panama, Central America, and Latin America. The "payaway treaty" clique has fallen back on (1) implied blackmail ("un- less we give it to the Panamanians, they may blow it up"), (2) self-fulfilling prophecy (forecasts of Vietnam-like guerrilla warfare), and, (3) self-inflicted descriptions of "colonialism." The current ploy of much of the "prestige media" on the Canal question is, feigning more disdain than anger, to dismiss all who have stood in steadfast opposition to the proposed "payaway" (an accurate term, "sellout" would imply the Panamanians are seeking to buy our $7 billion Canal; they are not) as jingoistic non-readers of history who are carelessly calling for war. Nothing could be farther from the truth. Long before the Canal and the Canal Zone turned into a political issue, the V.F.W. sought to inform the American public of the true nature of the issues involved. There follows arguments advanced by the "payaway apologists" and the relevant V.F.W. response. "Payaway Apologists. How can anyone in 1977 argue for a policy of "colonialism ?" V.F.W. Response. Colonialism is, definitively, an exploitation arrangement wherein a natural resource ; i.e., cotton, rice, tin, etc., is farmed, harvested, or mined by an oppressed people for processing, manufacturing, packaging and sale of the finished product abroad. Panama "oppressed?" Clearly not! Panama (a) has the highest per capita income of any of the seven countries of Central America and stands 4th (of 20 nations) in all of Latin America; (b) is dependent on the Canal and the Zone for 30% of her foreign currency earnings while 13% of her gross national product arises from the same source. Panamanian per capita wealth is about twice that of Colombia who, until 1903, w^as the country of w^hich pre-1903 Panama was a province. Panama "oppressed?" Tell that to Cambodia ! "Payaway Apologists. What is needed is a modern arrangement to replace a treaty (Hay-Bunau Vailla) now 74 years old. V.F.W. Response. Modernity, like beauty, rests in the eye of the beholder. Britain has occupied the "Rock of Gibraltor" since the 1713 Treaty of Utrecht which ended the War of the Spanish Succession. (Sensible people are thankful the British have been on the "Rock" for the past 264 years.) Unlike the Canal, Gibraltor has not played any significant role in Spanish economic growth. Like tlie Panamanians, the Spanish are unhappy about the status quo. Unlike our State Department, the British Foreign Office has kept a lid on the situation (to the benefit of us all) for 264 years, not 74. Perhaps we should ask the British Foreign Office to conduct a "crash course" on how to protect vital national interests for our State Department. "Payaway" Apologists. But the Hay-Bunau Varilla Treaty of 1903 gave the U.S. all rights, powers, and authority "as if it (the U.S.) were the sovereign of the territory." The words "as if" indicate that it is Panama, and not the United States, wliich liolds either "titular" or "residual" sovereignty. V.F.W. Response. Those who so happily produce the "as if" clause conveniently forget to add what follows in this "in perpetuity" treaty ; i.e. "to the entire ex- clusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." 437 The bulk of scholarship on the sovereignty issue supports the V.F.W. view. A family of treaties (a) with "New Granada" in 1846; (b) with Britain in 1901; and, (c) with Colombia in 1922, all undergrid and extend the sovereign pre- eminence of the U.S. as clearly recognized in the 1903 treaty with Panama ; a treaty, incidentally, deliberately ratified after the signing of the Panamamian Senate. . , ^ ^ ''Payaway" Apologists. Secretary of State Jon Hay advised President Iheo- dore Roosevelt that the 1903 Treaty was advantageous to the United States and disadvantageous to Panama. V.F.W. Response. Is there some natural order that mandates that most or all of the treaties entered into by the U.S. must be disadvantageous to America ; the Paris Accords of 1973 bringing "peace" to Southeast Asia comes readily to mind? Hay's view notwithstanding, as earlier indicated, the 1903 Treaty has been a success story for all concerned, most specifically including Panama. "Payaway" Apologists. How would you like to see America divided in two by the Mississippi River as the Canal divides Panama? ' V.F.W. Response. Unlike the example of the Mississippi, the construction of tlie Canal and the birth and continued existence of a Panama, independent, from Colombia, are inextricably linked. So while the U.S. Canal and the U.S. Zone, given human nature, may never be objects of popular admiration in Panama, nonetheless, the clear linkage between the U.S. presence and their national exist- ence is there and, we suspect, most Panamanians understand this unalterable fact of their nationhood. "Payaway" Apologists. Who wants to fight another "Vietnam" over the Canal? V.F.W. Response. No non-institutionalized person ever wants (a) any war, or (b) most especially a Vietnam-type encounter in which we win the battle, but not the \ictory. The war-like language about the Canal and the zone arises from occasional flights of oratory by General Torrijos ("We will walk the Ho Chi Minh Trail. It is long and exerts a heavy toll in blood."), from various Panamanian student groups, from supportive revolutionary rhetoric from Castro, and most disturb- ingly by U.S. oflBcials who, I would judge, believed that even an allusion to our defeat in Vietnam would suflSce to unnerve the American people in their natural desire to retain our preeminence in the Canal. This latter tactic has backfired badly, and, if anything, has produced an opposite effect. The real question is ; apart from the 1964 student disorders, we've had 74 years of peace, stability and progress in the Canal. Can this record be sustained or improved upon by the transparent "partnership" with Panama being advocated by the State Department? Remember, once America is meeting her responsibility as a matter of Panamanian sufferance and not unequivocal U.S. rights, we can be asked to pull out overnight. "Payaway" Apologists, But the Canal is especially vulnerable to sabotage. V.F.W. Response. It always has been, but it has only been in the last three years that this long standing vulnerability has been pointed out to us, often by our own negotiators. Again, how would the pullout of the U.S. garrison enhance the security of the Canal from any group or faction seeking to make some irrational Third World "point" by blowing a lock or draining Gatun Lake? If the Panamanian Government's reply is that they are unable to control their own citizens' actions in the face of a continued U.S. presence in the Canal, the question then looms ; how reliable a "partner" would the Government of Panama be in any "partnership" with the United States in confronting any non-Pana- manian : ie, Cuba pressure? V.F.W. Response. The Canal is not a "natural resource." It was built over a 10-year period by the Corps of Engineers. It is a quintessentially "artificial" or man-made enterprise. Secondly, the weight of history, law, and logic demonstrates that it is "ours" not "theirs." "Payaway" Apologists. But whatever the merits of the case might have been in the past, aren't we "painted into a corner" by the February. 1974 "Statement of Principles" agreed to by Secretary Kissinger and Foreign Minister Tack and the recent Treaty signing extravaganza? V.F.W. Response. When you're "painted into a comer," you have two basic choices: (a) keep on painting; or (b) use whatever turpentine is on hand to "unpaint" and get out. In 1967, Panama rejected an initialed draft of a new treaty. Our State Depart- ment can well use this earlier Panamanian rebuff as a valid precedent for a re-examining the validity of the 1974 "Statement of Principles" and the resultant proposed treaties. 438 "Payaway" Apologists. Have you ever seen the stark contrast between the ''manicured" lawns of the U.S. Canal Zone and the poverty and squalor of Pan- ama over the fence? V.F.W. Response. Yes. Yes. A ridiculous bit of imagery insulting to both the Zonians and the Panamanians, who are placed in the nonsensical position of favoring litter and uncut grass. The Canal Zone is not Grosse Point, Beverly Hills, Tuxedo Park or Chevy Chase. It is — and it should be — a typical American community adjusted for life in the tropics. The best way to assure Americans in the Zone have a spokesman is to have the Canal Zone send a delegate to the U.S. Congress as does Guam, Puerto Rico, the Virgin Islands, and the District of Columbia. "Payaway" Apologists. But the U.S. pays an annual "rent" to Panama. Doesn't this mean that Panama owns the Canal? V.F.W. Response. It is not "rent" for land or the Canal (we bought the property four times ; from Panama, from the individual land owners, from the failed French enterprise and from Colombia). It is an annuity paid to Panama (as it was earlier to Colombia) for displacing the old trans-Isthmus railroad. Not even the U.S. government is so soft in the head that it pays "rent" on land that it owns four times over. "Payaway" Apologists. What is the matter with the proposed Treaties' goals on this issue; i.e., "to assure that the Canal is operational, secure, efficient and open, on a nondiscriminatory basis to world shipping." V.F.W. Response. The "goals" cited above are a precisely accurate description of the arrangement. In short, why seek "goals" that have already been achieved? "Payaway" Apologists. Do you mean break off negotiations and thereby incur the wrath of all of Latin America, bring an abuse of America in the U.S. and incur, perhaps, the public opposition of even our NATO allies? V.F.W. Response. If we retreat when we're clearly right, we will have sur- rendered, in advance, all our influence on other and more ambiguous interna- tional disagreements. Three or four (of 20) Latin American countries, not, of course, including Panama, enjoy a significant degree of democratic freedoms. Democratic or au- thoritarian, many need the Canal operation even more than we do. I have neither seen nor heard of any hard intelligence that even suggests an international army drawn from Latin American states would either march on the Canal or seek to infiltrate the Zone in an international Vietnam-type operation. (Cuba, of course, having tasted a "revolutionary victory" in Angola is a separate matter.) As for NATO, as the Arab-Israeli "Yom Kippur War of 1973" so clearly under- scored, our allies do not have concerted policies apart from the defense of the NATO treaty area. I would expect a resolute U.S. stand on the Canal would gain the understanding and support of our major European friends. As to the UN, we are in a classic "no win" posture with the General Assembly and its Third World plus communist majority. Former Ambassador "Pat" Moynihan's perception that many Third World countries in wanting to rip off the wealth of others are really calling for "duly sanctioned looting." His view has relevance here. To sum up our total opposition to the proposed treaties : If we wrongfully "cave in" on the sovereignty issue, we are on the Isthmus at the sufferance of the volatile dictatorship of Brigadier General Torrijos. We could be asked to leave overnight. Do we then skulk out or do we stand our ground? The Canal is much closer to Cuba than is Angola. Soviet-inspired Cuban involvement on the Isthmus could well wear a "Panamanian Cloak." We would undoubtedly agonize, but we would probably acquiesce. The proposed "Neutrality Treaty," which, we are told, would permit U.S. military action to defend the Canal, is "waffling" brought to an art form. The Panamanians have agreed to no such thing in writing or in their rhetoric. The Administration may kid itself. It should not be allowed to kid the American people. Panama's wretched record in "huan rights," as attested to by the January 30, 1977 "Freedom House" study, needs no amplification here. The Administra- tion seems unembarassed by this manifest hypocrisy. Our President went so far as to embrace, literally, General Torrijos following the signing extravaganza. 439 I mean no disrespect to the Joint Chiefs of Staff, but until late 1975 they were silent upon the Treaty negotiations. I will not comment uix)n their recent shift in view, but the unfettered military advice of four former Chiefs of Naval Oi^eration calling for continued U.S. pre-eminence makes the compelling military case. In reviewing the Panamanian Student riots of 1964, I note the following prominen Americans were then quoted as follows : Ambassador Ellsworth Bunlver. The assault on the Canal Zone had been led by "persons trained in communist countries for political action of the kind that took place" and that "the Government of Panama instead of attempting to re- store order, was, through a controlled press, television, and radio, inciting the people to attack and to violence." Former President (then Minority Leader) Gerald R. Ford. "With Cuba under the control of the Soviets through its puppet, Castro, and the increased Com- munist Subversion in Latin America, a Communist threat to the Panama Canal is clearly a grave danger. The American people will be shocked by the terms of this (Johnson Administration) treaty." Joseph A. Calif ano, Jr. (Currently Secretary of HEW, then an Assistant to the Secretary of Defense) . "We know that some of the leaders were known and identifiable Communists, members of the Communist Party of Panama, and people who belonged to the Vanguard of 'National Action,' which is openly and proudly the Castro Communist Party in Panama." Now, I realize that 13 years have passed and that people often change their minds over time. My question is : what hard evidence, available to all of us in 1977, caused these three distinguished Americans to change their minds over recent years about the nature of the communist threat in Panama? We would all profit if they would share this new information with us. In conclusion : What the proposed Treaties embody is a slow motion act of strategic self- mutilation. Only 13 of our warships cannot transit the Canal today. As Navy ships get smaller, even this small number will decrease. The Canal and the Zone (a) save 8,000 miles and 15-30 days; (b) have the only ship repair facilities within 1,600 miles on the Atlantic side and 2,500 miles on the Pacific side; (c) have, in Howard Air Force Base, the only high perform- ance air base within 1,000 miles; and, (d) is the only U.S. logistical base south of the Rio Grande. As to the possibility of violence should the Treaties not be ratified, no one in America, especially including the V.F.W., is threatening anybody. We are being threatened by a Panamanian strong man who, seemingly on alternate days, either threatens violence or abhors it. And this is the man with whom we seek a "partnership"'? What, then, does the V.F.W. propose? (a) A revised U.S. position which would immediately disabuse Panama of any major territorial, defense, control or operational aspirations ; i.e., America is not running the Canal on Panamanian sufferance. (b) Generosity and imagination on real life human grievances (ranging from parking places to job opportunities) where a long term U.S. administration may have needlessly chafed Panamanian citizens ; and (c) A major modernization packet to ready the Canal for ships now too large for passage and other measures all of which would combine to give a major boost to Panama's diversifying, albeit debt-ridden, economy. To conclude : An opinion research poll indicated that Americans favor, by 76-16 percent, con- tinued U.S. sovereignty over the Canal and the adjacent Zone. Change is an imperative when a given status quo is unworkable. Changes does not equal progress when current arrangements not only do a job, but do it superbly. The Panamanians want very badly to have their way and far too many in the State Department see it their way ; i.e., reciting "Panamanian Perceptions" ad nauseam. Our people can, should and must be brought unapologetically to defend a 74-year record America and the world maritime community have unarguably benefited from. 99-502 — 78 29 440 Resolution No. 402 — U.S. Sovereig>'ty Ovilb. The "United States Canal" Located on The Isthmus of Panama Whereas, Article II of the 1903 Convention between Panama and the United States, modified in part by the 1936 Treaty between the two Government, states : article II The Republic of Panama grants to the United States in perpetuity the use, occupation and control of a zone of land under water for construction, mainte- nance, operation, sanitation, and protection of said canal of the width of ten miles extending to the distance of five miles on each side of center line of the route of the Canal to be constructed ; the said zone beginning in the Caribbean Sea three miles from mean low water mark extending to and across the Isthmus of Panama into the Pacific Ocean to a distance of three marine miles from mean low water mark with the proviso that the cities of Panama and Colon and the harbors adjacent to said cities, which are included within the boundaries of the zone above described shall not be included in this grant. . . . The Republic of Panama further grants in like manner to the United States in perpetuity all islands within the limits of the zone above described and in addition thereto the group of small islands in the Bay of Panama, named Perico, Xaos, Culebra and Flamence ; and Whereas, the United States has more than fully met its obligations to Panama under existing treaty arrangements and, moreover, has eflSciently and respon- sibly accommodated a large number of transits and amount of tonnage through the canal ; and Whereas, the United States has paid for the Canal and the Canal Zone four times (1) to Panama, (2) to the failed French consortium, (3) to private citi- zens of Panama, and, finally, (4) to Colombia ; and Whereas, the revolutionary government of Panama, a product of coup d' etat, has since June 1971, under the guise of seeking new canal treaty arrangements, undertaken a bitter and sustained campaign of anti-American propaganda fueled in large part by Cuban and Soviet communists ; and Whereas, given the emotionally irrational situation in Panama, a political/ l>sychological "timebomb" is being consciously fabricated by the revolutionary government of Panama, set to explode to the detriment of the United States and the world shipping community ; and Whereas, due largely to our unswerving V.F.W. support, patriots in the United States Senate, led by Senators Thurmond (S.C.), Helms (N.C.), and McClellan, (Ark.), have gone on record in opposition to the unprincipled "Statement of Principles" signed by former Secretary of State Kissinger and the Panamanians, and a parallel effort is being similarly supported in the House of Representatives, led by Congressman Dan Flood (Pa.) ; now, therefore Be it resolved, by the 78th National Convention of the Veterans of Foreign Wars of the United States, that : (a) U.S. operation, control and defense of the Canal are non-negotiable; (b) tensions relating to the administration of the Canal Zone be resolved on the spot without disturbing present treaty arrangements ; (c) U.S. citizens and employees in the Canal Zone continue to meet their responsibilities under U.S. sovereignty ; (d) the foregoing position be again communicated to both the President (who in October 1976 asserted that he would "never give up complete or practical control" of the Canal) and the Congress ; (e) the Panama Canal Zone send to the Congress of the United States a dele- gate such as is done in Puerto Rico, the District of Columbia, and the Virgin Islands : and (f) the proposed treaty being put forward by the Carter Administration be defeated in the 95th Congress. Adopted by the 78th National Convention of the Veterans of Foreign Wars of the United States, held in Minneapolis, Minnesota, August 19 through 26, 1977. [From the Congressional Record, Sept, 21, 1977 — E5759] State Department Negotiated Panama Canal Treaties in Flagrant Violatio:^ OF National Environmental Policy Act (By Hon. Gene Snyder of Kentucky) Mr. Sntder. Mr. Speaker, during the August recess I issued a press release concerning an exchange of correspondence I had with the State Department which proved that that agency, in its negotiations with Panama for a new canal treaty, utterly failed to take into consideration the requirements of the National Environmental Policy Act and its own guidelines on conforming with the law. Then, on August 17, in open hearings of the Committee on Merchant Marine and Fisheries, 1 put several questions on this matter to the State Department treaty negotiators. Their answers gave further proof of the flagrant violation of NEPA by that department. Some 10 days after that hearing the Department of State attempted to cover itself and issued a draft environmental impact statement of sorts. I was glad to see my colleague from California, Mr. Leggett, speak on that draft EIS on September 15, and point out that the. department "flunks" NEPA. Mr. Speaker, I urge every Member of both Houses of Congress to familiarize himself or herself with this utter contempt for the law of the land by the State Department, and to take the position that nothing further should be done re- garding the proposed treaties until this whole matter is given a full airing. The following is the text of the above-mentioned August 17 hearings insofar as niy questions and the State Department's answers are concerned. Following that is my August 9 press release, which includes the full texts of the correspondence I had with the Department of State : Mr. Snyder. Mr. Ambassador, please spell out for us precisely how you used the State Department finding as to the environmental aspect and impact of the new treaty proposals as a guide to your decisions as you proceeded throughout the negotiations with Panama? Ambassador Linowitz. Mr. Wyrough may be able to answer that. Mr. Wyrough. We have a review of the environmental impact of the proposed treaty underway. It is not yet completed. I think we can say that among the ar- ticles we expect to have in the treaty will be one concerning the environment which both countries move to protect. Mr. Snyder. Sir, if the environmental study is underway, how did it serve as i^uidelines for the treaty as required bv the National Environmental Policy Act of 1969? Mr. Wyrough. I can only say to you that we have a review of the environmen- tal questions underway. That review is not yet completed. Mr. Snyder. So you didn't follow your own State Department guidelines or the Environmental Policy Act of 1969? Is that inappropriate at this time? Mr. Wyrough. I have no further comment other than what I have made. press release Congressman Gene Snyder today made public an exchange of correspondence which he declared, "demonstrates that the Department of State has utterly failed to comply with the National Environmental Policy Act (42 U.S.C. 4321), the di- rectives of the White House Council on Environmental Quality, and, in fact, with the Department's own 'Procedures for Compliance with Federal Environ- mental Statutes' in the decisionmaking process of negotiating a new treaty with Panama by which it proposes to divest the U.S. taxpayers of their $7 billion investment in territory and installations in the Canal Zone and Panama Canal." The Kentucky Republican wrote the State Department on .Tune 9 requesting any environmental impact statement on the treaty ; data concerning its investi- (441) 442 gation to determine if the treaty would significantly affect the human environ- ment; requests of other agencies or non-governmental groups for information helpful in evaluating the environmental impact of the proposed action and any xinsvvers received ; and details of all other actions taken in the matter. Snyder said, "I am quite certain that until my letter stirred up the Department, no one there had made any serious effort even to get started in complying with the law although they were going like gangbusters to get Ambassador Sol Lin- •owitz's signature on a new treaty before his temporary six-month appointment as co-negotiator runs out this Wednesday. Before my June 9 letter, I had ascer- tained that neither the Council on Environmental Quality nor any other govern- ment agency had received any State Department environmental statement on the treaty, or requests for comment or information on the matter. "I didn't even get a reply until June 26th, after my Panama Canal Subcom- mittee staff prodded State Department personnel working on the negotiations. That answer, dated July 22nd, states, "The Department has not as yet made a determination as to whether the action in question will significantly affect the quality of the human environment within the meaning of the National Environ- mental Policy Act, and consequently we have not yet prepared an Environmental Impact Statement." "This clearly shows that the Department, since it has not yet assessed the treaty's environmental implications, has utterly failed to consider those implica- tions in the decision-making process. "Both the White House and the State Department for months have furnished the media with oflScial and leaked stories about th'e rapidity with which the negotiations are coming to a successful close. But it seems they overlooked com- pletely, until I called attention to it, the requirements to take those implications into consideration in the treaty negotiations process itself. "The September 24, 1976, memorandum of the President's Council on Environ- mental Quality quotes House Report 93-316 of the House Committee on Mer- chant Marine and Fisheries. "'The history of the act (NEPA) makes it quite clear that the global effects of environmental decisions are inevitably a part of the decision-making process and must be considered in that context." "The CEQ memo concludes : " 'Accordingly, agency oflEicials responsible for analyzing the potential environ- mental effects of proposed actions should fully ass'ess the potential impacts outside the United States as well as those within it ; if any of these potential impacts are likely to be significant, an impact statement should be prepared." "The State Department's own guidelines on Environmental impact statements published in the Federal Register September 19, 1972, states : " 'The prodess of deciding on the need for an environmental impact statement on any Department action will itself require an analysis of the effects that the proposed action will have on the human environment. The inquiry into environ- mental effects is mandated, independent of the requirement to file environmental impact statements, by section 102(2) (B) of the act, which requires procedures to insure that presently unquantified environmental amenities and values may be giVen appropriate consideration in decision-making along with economic, tech- nical and other considerations. CEQ Guideline No. 1 underscores this by recog- nizing that the purpose of section 102(2) (C) is to build into the agency decision- making process an appropriate and careful consideration of the environmental aspects of proposed actions, and to assist agencies in implementing not only the letter, but th'e spirt, of the act." " 'Even where it is clear from the start that a proposed action will not require an environmental impact statement, the consideration of possible environmental effects will still be made, and, as required by the act, the results of that investiga- tion will be an integral part of the decisionmaking process.' ". "I wonder if the State Department has even contacted environmentalist groups on the Isthmus of Panama. That there will be environmental fallout from this treaty is certain. Panama says it wants to expand Panam City into the present Canal Zone. Does that mean industry, light, medium or heavy, will expand there? How about installations to fuel the new industries? Will industry bring erosion to the banks of the Canal? "The Zone pre.sently, because of its cleanliness, is known to be a barrier to the spread northward of hoof and mouth disease, always a worry to cattle ranchers in Mexico and the U.S. Will this remain true under Panamanian jurisdiction? "What about considerations for a new sea level canal in this treaty? On April 14, 1975, Friends of the Earth and nine other national and international 443 environmentalist groups vigorously protested any consideration of potential dangers that could result from the project as a consequence of the inter- mixture of now-separate biological systems in the tropical Caribbean Sea and Pacific Ocean. There is no intermixing at present because marine organisms cannot survive in the existing lock-type Panama Canal, which contains only freshwater.' " "What will happen to the Madden Forest Preserve and the abundant mammal and plant life of the Zone? "What will be the fate of the myraid species of birds in the Zone, in the vicinity of the Gamboa Pipeline Road and elsewhere? "The White House and the State Department seem to have made treaty deci- sions with little or no heed to environmental questions the law requires our policy- makers and negotiators to be cognizant of." Department of State, Washington, D.C., July 22, 1977. Hon. Gene Snyder, House of Representatives. Dear Mr. Snyder : This is in response to your letter of June 9 to the OflSce of Environmental Affairs requesting certain information with respect to any environmental assessment being prepared in connection with the proposed treaty between the United States and the Republic of Panama. The Department has not as yet made a determination as to whether the action in question will significantly affect the quality of the human environment within the meaning of the National Environmental Policy Act, and consequently we have not yet prepared an Environmental Impact Statement. We are, however, prepar- ing an assessment of the environmental implications of a treaty and when it becomes available, w^e would be happy to provide you with a copy. Sincer'ely, Douglas J. Bennet, Jr., Assistant Secretary for Congressional Relations. Committee on Merchant Marine and Fisheries, Washington, D.C., June 9, 1977. Office of Environmental Affairs, Department of State, Washington, D.C. Gentlemen : In accordance with the Department of State's Public Notice 364 published in the Federal Register, September 19, 1972. "Environmental Impact Statements," this is to request 1. Any draft environmental impact statement issued by the Department in connection with the proposed treaty with Panama. 2. A copy of the Department memorandum indicating the extent of the investi- gation conducted to determine if the proposed treaty will be a "major Federal action significantly affecting the quality of th'e human environment". 3. Copies of all requests made by the Department to other government agencies or non-governmental groups for information helpful in supplementing the Depart- ment's own work in evaluating the environmental impact of the proposed action, and copies of any response received. 4. Details of all other actions taken by the Department in regard to this matter. I would appreciate an immediate response to this request. Sincerely, Gene Snyder, Ranking Minority Memher, Panama Canal Subcommittee. [From the Congressional Record, Sept. 21, 1977 — E5762] THE PANAMA CANAL TREATY (By Hon. Dan Daniel of Virginia) Mr. Dan Daniel. Mr. Speaker, no issue in all the years I have been in public office has generated as much interest among the citi25ens of this country as the transfer of the Panama Canal and the Canal Zone to the Republic of Panama. "While specific figures vary, every poll that I have seen indicates disapproval by American citizens of this transfer. The American Legion held its 59th convention in Denver, Colo., August 28- 25. That group passed a resolution in opposition to the treaties of transfer and I believe it is important that the Members of this body be aware of the resolu- tion which passed setting forth the reasons for this opposition. Additionally, the Honorable Meldrim Thomson, Jr. Governor of the State of New Hampshire, made a statement at that same convention. I, therefore, insert both the resolution and statement in the Record : 59th National Convention of the A:^ierican Legion — Resolution Xo. 445 Committee: Foreign Relations. Subject: Panama Canal. Whereas, the United States is the rightful and legal owner of the U.S. Canal Zone and the Panama Canal, having acquired this U.S. property through court tested treaties and agreements and mutually agreed upon payments to Colombia, Panama and the individual land and property owner ; and Whereas, the United States Supreme Court has ruled that the United States is legally entitled to sovereignty and ownership of the U.S. Canal Zone for the purpose of building, operating, protecting and maintaining a canal across the Isthmus ; and iWhereas, the United States has lived up to its obligation under the Treaty to the letter of the law ; and Whereas, the political, economic and the military factors offer conclusive evidence that it is in the vital national interest of the United States to retain sovereignty and ownership of the U.S. Canal Zone and Canal ; and Whereas, over three-fourths of our American citizens consistently voice their opposition to any kind of '"giveway" or dilution of U.S. sovereignty over this territory ; and Whereas, the United States as leader of the free world has a moral obligation to remain fair, firm and strong when faced with political blackmail ; and Whereas, surrender of the U.S. Canal Zone would be tantamount to a major military defeat with enormous consequences for evil; now, therefore, be it Resolved, by The American Legion in National Convention assembled in Denver, Colorado, August 23, 24. 25, 1977, that we reiterate and reaflarm our con- tinuing and uncompromising policy in opposition to any new Treaties or Execu- tive Agreements with Panama, relating to the U.S. owned Panama Canal and its protective frame of the U.S. Canal Zone as expressed and set out in separate resolutions adopted consecutively at each annual American Legion National Convention since the Miami Convention in 1960 ; and, be it further Resolved, that we strongly urge all elected members in the U.S. Congress to oppose any new treaty with the government of Panama which; (a) in any way dilutes full U.S. sovereignity, ownership and control; (b) cedes U.S. territory or property; (c) surrenders any jurisdiction and control which would threaten the economic and security interests of the United States ; and, be it further Resolved, that The American Legion rejects the actions of the Executive agencies of the federal government in attempting to by-pass the Constitution of the United States, and we fully support Article IV, Section 3, Clause 2, of the Constitution which provides that only the Congress has the authority to dispose of U.S. Territory. (444) 445 DAW^- Or Dusk (By Gov. Meldriin Thomson, Jr.^) Commander Rodgers, Honorable Delegates to the 59th Annual convention of the American Legion : Twenty-nine hundred miles southeast of us the sun rose this morning, as it does every day, on the American Canal in Panama before it was seen on the east coast of Florida, Did its rising portend the dawn of a new era for this land or ours? Ov will the setting of the sun beyond the Rockies a few hours hence herald the fading dusk of an America once great and strong. There is no group of citizens to whom I would rather entrust the answers to those two questions than to you, the working guardians of American liberty 1 Behind us lies the rich history of two successful centuries of growth from a fledgling coastal nation of 13 states to a great world power. As we cross history's threshold into our third century, what kind of a future do we and our posterity face? Will we stand brave and firm for freedom in the real world of spreading com- munism or crawl into historical obscurity before the hysterical howling of world opinion? The answer to these vital questions will be found in our response to the demand of the communist affiliated dictator, General Omar Torrijos, that we give to the Republic of Panama the Canal, its locks and appurtenances — plus a yet un- specified indemnity for 62 years of use of that which by treaty we have held "to the entire exclusion of Panama" and "in perpetuity." Under the misguided leadership of a craven Department of State we have seen the sacrifices made and the victories won in World War II frittered away in the Treaties of Teheran, Yalta, Potsdam and Helsinki. Since the war to end all wars we have witnessed the lights of liberty extin- guished in 31 countries around the world. We have fought two ghastly no-win wars with hands and feet tethered while leaving more than a hundred thousand young Americans in the silent death of battle. In recent years we have raised and supported new communist nations. At the same time we have coerced and harassed old and loyal allies such as the Republic of China, Israel, Rhodesia and South Africa. Xow comes Omar Torrijos and his National Guard strongarm goons and says to Americans, either give us back that which we ceded to you forever or we shall take it from you by guerrilla warfare and with the support of Latin America and third world opinion. Thus, today the testing issue of America's future has become the Canal. Will America continue her flight from greatness or will we, in the spirit of our Founding Fathers, draw the line of reckoning at the Big Ditch and there stand firm against the rising tide of communism in the Caribbean. Have we become so spineless, so cowardly that we jump when any tiny foreign power, bent upon blackmail, snaps its corrupt fingers? If so, then former Undersecretary of State, George Ball, was right when in 1962 at the dedication ceremony on the opening of the $20 million Thatcher Ferry Bridge that crosses the Canal at Balboa, he said in effect : "Here in this place destiny changes horses." If Ball's analogy to destiny changing horses proves correct, and the proposed Treaty becomes a reality, then I suggest that America will have dismounted from a Seattle Slew and climbed atop a Panama burro ! EMOTIONAL ISSUES We are told by our give-away boys in the State Department that the Canal issue has become needlessly entwined with emotionalism. Treaty negotiator Sol Linowitz was recently quoted as saying that the opposi- tion to the treaty is one of emotionalism ; it is one of great ignorance on the part of the American public. He sounds much like the group of American businessmen with whom I talked in Panama City early last June. ^ Luncheon talk given before delegates of the 5.9th American Legion Convention Denver Colo., August 24, 1977. 446 About the many government instigated instances of Panamanian youth tearing down and desecrating Old Glory these money-hungry merchants said, "They are just Idds blowing off steam !" Back in 1964 w^hen the Panamanian public desecrations of the American Fag began our public officials should have issued an order similar to the one given by John Dix, the New Hampshire born custom official in New Orleans at the outbreak of our Civil War. Dix said : "If any one attempts to haul down the American Flag, shoot him on the spot." The Canal has been a proud part of our heritage for three-quarters of a century. It is important to our economy ; vital to our national security ! It has been as much a part of the national sovereignty as Florida, Alaska, and all of the central and western states acquired under the Louisiana and Gadsden purchases. Recently Henry Kissinger, the architect of American compromise, accommoda- tion and surrender, described the proposed give-away of the Canal as a response not only to wisdom of statesmanship but also of "patriotism". Imagine it ! Patriotic to relinquish the Canal ! Why that is like winning the Nobel Prize for Peace by the simple technique of surrendering all in Vietnam. Contrast the un-American words of former Secretary of State Kissinger with that truly great American statesman Charles Evans Hughes w^ho in 1923, in speaking on America's right to the Canal, suggested that it was unthinkable that any American President or Secretary of State would ever surrender any part of the rights which the United States had acquired under the Treaty of 1903". Yes, Linow^itz is right. This brazen attempt to rip out a vital organ of our body politic is as fraught with emotion to any true patriot as the defilement of the American Flag. Let us pray that the emotion that prompted John Paul Jones defiantly to cry from his sinking ship, "I have not yet begun to fight ;" or that grand sentiment that inspired Stephen Decatur to toast. "Our country : in her intercourse with foreign nations may she always be right : but our country right or wrong", lead our United States Senators to respond to the Treaty proponents with the same eloquent de- fiance to the Germans' demand for surrender used by General Anthony C. McAuliffe at the Battle of the Bulge— "NUTS !" WHY A TREATY Why the. great haste to cede our sovereignty in the Canal Zone to the Republic of Panama? While we are told by Ambassador Bunker and Linowitz that world public opinion demands a new treaty, and while we have been incessantly proded by Panama government instigated riots, I believe that the true reason is that our government is once again surrendering to the relentless pressure of world com- munism. By the 1903 Hay-Bunau Varilla Treaty the Canal and its Zone were given to America "in perpetuity". We presided as mid-wife at the birth of Panama. Part of the consideration for this service was the Canal Treaty. Now the grown child would renege on its birth service but show\s no inclination to return as part of Colombia. Article II of the 1903 Treaty declares that "the Republic of Panama grants to the United States all the rights, power, and authority within the zone men- tioned . . . which the United States would possess and exercise if it were tlie sovereign of the territory within which said lands and waters are located, to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority." That language clearly cedes sovereignty over the Canal Zone to the United States forever. In 1907 our United States Supreme Court confirmed our title to the Canal Zone in the case of Wilson v. Shaw. "It is hyprocritical", the court said, "to contend that the title of the United States is imperfect, and that the territory described (the Cnnnl Zone) does not belong to this nation because of the omission of some of the technical terms used in ordinary conveyances of real estate". It was not until 1974 that United States officials, led by Kissinger in his eiglit point C'litline for a treaty, agreed upon with foreign minister Juan Tack, sug- 447 gested that the United States did not have sovereignty over the Canal Zone. Linowitz contends by the magic of legal sophistry that the United States in the 1936 Treaty relinquished the sovereignty created by the 1903 Treaty by the use of the words "territory of the United States under the jurisdiction of Panama". A careful reading of the entire treaty will convince any reasonable mind that this language was an inaccurate description of our sovereignty and, more im- portant, was never intended to change it. A FEW BASIC FACTS For almost four centuries men schemed and dreamed of building a canal to carry ships between the Atlantic and Pacific Oceans rather than follow the 7,000 mile route around Cape Horn. As long ago as 1524 Charles V of Spain ordered the first survey for a proposed canal route over the Isthmus of Panama. One of the first of many American presidents to become involved with the Canal was Ulysses S. Grant who sent a naval expedition to survey the Isthmus at Darien in 1S70. The French for two decades under Ferdinand De Lesseps, the builder of the Suez Canal, tried to construct a sea level canal across the Isthmus. When they failed Theodore Roosevelt led Americans in an engineering and managerial feat that was the moon shot of the beginning of the century. To Panama we paid $10 million to obtain the Canal in perpetuity. From the bankrupt French Canal Company we bought its rights and proper- ties to the Canal for $40 million. And to Colombia we paid $25 million in 1922, to the disgust of Teddy Roosevelt. We built a 51 mile Canal with three sets of locks at each end capable of raising and lowering ships 85 feet. The chamber of each lock is 110 feet wide and 1,000 feet long. The gates to each lock are 7 feet thick and 10 stories high. Each filling of a lock requires 52 million gallons of water and takes 8 minutes to fill by gravity. In the building of the Canal enough earth was moved to fill a ditch 10 feet deep and 50 feet wide, stretching from New York to Los Angeles. After an expenditure of almost $400 million, the building of the world's largest earth dam and the creation of the largest man made lake, the Canal was ready to transit the first ship, the S.S. Ancon, on August 15, 1914. Since building the Canal the United States has spent about $7 billion in im- provements, maintenance and investments. Under our sovereign operation of the Canal it has always been available to all nations except our enemies in times of war. The tolls have been reasonable and uniform. Only twice in 63 years of opera- tion have we raised the tolls : once in 1973 from 90 cents per ton to $1.08 and again in 1975 from $1.08 to $1.29. Since we have lost $27 million on the operation of the Canal from 1973 through 1976, we must wonder what would happen to the tolls if Torri.ios were to gain control of the Canal and raise them drastically to produce much needed revenue. Two months ago I partially transited the Canal on a Danish container vessel carrying a payload of 13,000 tons. She was 690 feet long and 100 feet wide. Her toll charge was $26,000. She saved a quarter of a million dollars by avoiding the extra 10 day journey around the Horn. WE NEED THE CANAL The Canal is important to America's economic growth and vital to our national security. Last year about 13.000 ships trainsited the Canal. This is almost twice the number that used the Canal the year after World War II. The Canal can handle 96 percent of the World's shipping. The Canal has been of great economic value to the consumers of America. For example, 42 percent of all cargo going through the Canal originates in the United States and 21 percent of all cargoes are destined for our nation. Approximately 30 percent of all physical commodities transiting the Canal are energy related, such as petroleum, coal and coke. 448 Next month it is anticipated that three large tankers a day will transit the Canal bearing Alaskan oil from Prudhoe Bay to the energy hungry eastern seaboard. Dare we leave such an important transportation link in our economy to a dic- tatorial communist leaning regime that has so jworly managed its internal affairs that it now must pay 40% of its annual budget to debt services? We do not have a two-ocean navy. Former Secretary of the Navy William Middendorf and other naval experts have made that clear. Hence, the Canal is vital to our national security for the movement of naval vessels from one ocean to the other. The Canal can handle 98 percent of all of our naval vessels including our nu- clear submarines. Only our large aircraft carriers cannot make the transit. After the Singlaub incident we all know that the President keeps a headlock on the military. Active commissioned officers will either say what the administration desires or remain silent. Therefore, we must look to our retired officers for the most accurate and honest appraisal of the importance of the Canal to our security. Earlier this month four retired admirals each of whom had served as chief of naval operations ; namely Arleigh Burke, Thomas H. Moorer, Robert B. Carney, and George W. Anderson w^rote to the President as follows : "We note that the present Panamanian Government has close ties with the present Cuban Government which in turn is closely tied to the Soviet Union. "Loss of the Panama Canal which would be a serious setback in war would contribute to the encirclement of the United States by hostile naval forces and threaten our ability to survive." I don't know about you, but I find the testimony of those four respected Ad- mirals far more convincing on the question of the importance of the Canal to America's future safety than anything that might be said by Linowitz, Kissinger, Ford, or Carter. INTERNATIONAL EXPLOITERS Ambassadors Linowitz and Bunker say that the American public is ignorant about the Panama Canal issue. They are right if they are speaking about the details of the proposed treaty. These two representatives of our international clique of bankers have refused to answer many vital questions put to them by our Congressmen. But if they are speaking about the importance of the Canal to the United States they are dead wrong. The great majority of Americans know that we paid more for the real estate of the Zone than we did for either Florida or Alaska and that America alone built the Canal and has successfully operated as a great international waterway ever since. Yes, and these hard working, taxpaying Americans recognize the value of the Canal to the future of our nation. I tell you, sir, that regardless of the secretive and cowardly plans of the give- away boys, the average American means to hang on to the Panama Canal forever ! And if that means driving from the seats of power those public officials who would place the welfare of the republic of Panama above that of the United States, then we shall be about that great task a once. For practical purposes Panama is bankrupt. When Torrijos grabbed the reins of power in 1968 without benefit of an election the public debt was $160 million. Now it stands at $1.4 billion. The current budget for Panama is $607 million. Estimated revenues of $346 mil- lion fall far short of the budget. Current debt service is $221 million. The list of banking creditors of the Panama Government reads like an Inter- national Bankers Who's Who. It includes the Narody Bank of Moscow, the London Branch of the Chase Man- hattan Bank, Citicorp International Bank of I^ndon, International American Development Bank. Continental Bank of Chicago, the Export Import Bank of Washington, the Marine Midland Bank, and the Agency for International Development. All of these banks are vitally interested in the success of the proposed treaty. They see the American taxpayers as eventually picking up the tab for bailing Torrijos out of hock. But I believe the taxpayers of the land are plain sick and tired of dancing to the tune fiddled by our errant diplomats. 449 I was told recently by American businessmen in Panama that they had a good dictatorship and that a new treaty would help their business. Some of these businessmen were like representatives of those American multi- national corporations who supplied Russia with tlie technology' and machinery that made it possible to supply Vietnam with the materials of war used against our American soldiers. Too often, and with disastrous results for this country, businessmen follow the dollar instead of the flag ! Some of the businessmen with whom I talked suggested that their American companies would lobby for a new treaty with Panama. I hope that if they do the American taxpayers and working i)eople of this nation will mount the biggest boycott in the history of America against all companies that place price above principle. CONCLUSION Gentlemen, we have accommodated ourselves to or retreated before communism since World War II. Now communism is on our southern doorstep. The time is here when we must forget about world opinion, which incidentally has never contributed one depreciated dime to the tax bill of America. Let us think America for Americans. Let us stop worrying about corrupt, blackmailing dictatorships throughout the world, and instead charge our public oflieials with tlie welfare of our own citizens. Whether we admit it or not communism is at war with what remains of the free world. In his great address before the Congress General Douglas MacArthur recognized this elementary fact of modern life. He w^arned, "The Communist threat is a global one. You cannot appease or otherwise surrender to communism in Asia without simultaneously undermining our efforts to halt its advance in Europe". If we mean to remain a land of the free then we must Immediately regain the initiative from the communist forces of the world. We can do this best by making our stand at the Big Ditch. Instead of a public debate over a proposed give away treaty of the canal we should demand our public oflieials an immediate severance of diplomatic relations with the Republic of Panama as long as it tolerates the flagrant disregard of hu- man rights by its dictatorial regime. Gentleman, I resi)ectfully challenge you to join me in sending to the Halls of Congress an emphatic and reverberative "NO" to the give-away of our Panama Canal. [From the Congressional Record, Sept. 23, 1977 — E5S03] Latin Leaders Refuse To Endorse New Panama Canal Treaties (By Hon. Gene Snyder of Kentucky) Mr. Snydeb. Mr. Speaker, Virginia Prewett is one of our country's most astute and experienced reporters on Latin American affairs. She lias top-level contacts throughout the Americas, and publishes Hemisphere Hotline Report. Her report for the week of September 16, below, demolishes President Carter's claim that Latin America is gung-ho for the new Panama Canal Treaties : [From the Hemisphere Hotline Report, Sept. 16, 1977] Latin Leaders Refuse To Endorse Treaties Washington, D.C. — Amid the hoopla of the U.S. capital's "Week of Panama", the chief point Carter sought to make by inviting the hemisphere's heads of state to his Panama Canal treaty-signing was thoroughly killed by the visiting heads themselves. The visitors flatly refused to sign his accompanying "Declaration of Wash- ington" until the text was watered down to uselessness for Carter's principal purpose — that of using the declaration to convince the Senate that it should ratify the new Canal pacts. While much of the U.S. press was ooh-ing and aah-ing, as intended, over how many Presidents and dictators were coming, a tense diplomatic struggle be- hind the scenes was lost by Carter. As first drafted, the Declaration of Washington implied the blessing of U.S. hemisphere neighbors on points in the U.S.-Panama treaties themselves in- cluding provisions that say the U.S. can intervene militarily at need to defend the Canal after Panama fully takes over. Carter needed, and thought he could get, a collateral signed statement to this effect from the chiefs of state and other representatives invited to the main treaty signing. For this purpose, the U.S. President invited some of these at great political cost to himself. Getting such a written commitment from other governments was essential to Carter because many moderates in the Senate well may decide for or against the Canal treaties depending on whether Latin America mostly accedes to — or opposes — treaty provisions supposed to protect U.S. economic and military interests. P.ecause he saw this need as so great, Carter overrode his own New Left- INIcGovernite appointees when he invited to Washington seven hemisphere government heads that he and the New Left have placed on the U.S. human- rights blacklist. Early on. the White House dropped mention of the proposed Declaration of Washington, and the invitees were not told they would be asked to sign a paper — one that would have plucked Carter's treaty chestnuts out of the fire with at least some thoughtful Senators. Heads of state were asked, by the Organization of American States in tlie name of the U.S. and Panama, only "to be i)resent" at the Sept. 7 treaty-signing. The Declaration of Washington, a short statement, said in the first version that the signatories "endorsed" the treaties. While some visitors were actually en- route, like process-servers, White House messengers handed Latin American embassies in Washington the declaration text. "The action is without precedent in the history of diplomacy," said one irate hemisphere diplomat. The countries concerned were given the main treaty texts at about the same time. Then .Timmy Cater began to learn something about Latin America. What ensued sliould have taught him sometliing also about the unwisdom of the people who ad- vised him to call the hemisi)here summit — advisors Avhose knowledge of Latin Americans is apparently skin-deep. For the treaties Carter expected to get (450) 451 "endorsed" invoice one of the touchiest issues, and one of the oldest, in Latin American relations versus the U.S. That issue is intervention. Not surprisingly, the political kingpin of the four Latin American countries actively backing Panama's demand for the new treaties, Mexico, announced in advance that it would never sign such an endorsement. Even Canada balked. OPERATION ARMTWIST Carter aids began hasty re-writes of the Declaration of Washington, and at least three revised versions were debated behind the scenes right up through the day of the Canal treaty signing ceremony. Several Latin American Presidents told Virginia Prewett they hadn't had time to study either the treaties of the Declara- tion of Washington. Another said the English term "endorse" has no adequate Spanish equivalent. (This was a polite stall.) What had to be done to get the chiefs of state to sign was a complete gutting of the Declaration of Washington. As finally watered down (and signed by all but little Barbados), the document merely required the visiting government heads to ••record our profound satisfaction at the signature by the President of the U.S. and the Chief of Government of Panama" of the treaties, with no commitment whatsoever on the nature or content of the pacts. In keeping with the scale of this defeat for Carter, it was arranged that the visitors quietly sign the gutted Declaration in an OAS anteroom as they arrived. And not one word was said about this in the televised festivities as Carter and Torrijos signed the Panama Canal agreements. How much arm-twisting the U.S. had to do to get even with this watered-down declaration, which all the Latin Americans agreed among themselves means abso- lutely nothing, no doubt will leak out gradually. Indications are that the U.S. arm-twisting was harsh, especially with Mexico. If so, the U.S. will pay for it in future, and probably pay high. The Canal treaty spectacular raises questions about Carter that only time can answer. Did he go all-out for the Panama treaties, far from a crisis issue in U.S. foreign policy, out of sheer ignorance of what he was getting into? Or out of sheer bullheadedness? For Carter has stirred some hornet's nests that were quiescent. The Panama treaty issue had been lying around for at least 145 years. Carter could easily have said the U.S. refused to negotiate under threat, thus setting a healthy precedent for our times. He could as easily have refused to negotiate with Panama's Torrijos due to his human-rights abuses. Instead, Carter has entirely vitiated his human-rights credibility. We have seen a U.S. President accuse, condemn, chide and penalize seven Latin American gov- ernments on "human rights" and then, when in political need of their support, embrace them at the White House. No matter how Carterites may claim that the seven (all anti-Marxists) have "improved" on human rights in six months, this is bald expediency for all the world to see. The world, if not the U.S. public, also knows that Panama's Torrijos, made a Third World hero by Carter's actions, grossly violates his peoples human rights, that he tortures and murders political prisoners, has "family" ties with organized narcotics, and rules Panama with his jackbooted National Guard, a body with Castroite officers in top positions. WHAT CARTER HATH WROUGHT Virginia Prewett asked a left-to-right spectrum of Latin American Presidents whether (as the pro-treaty U.S. press insists) Latin Americans hemisphere-wide will attack U.S. property and U.S. nationals if the Canal treaties are not ratified. Responding with a resounding "No" ; Argentina's Videla, Bolivia's Banzar, Chile's Pinochet, Hondouras's Melgar Castro, Guatemala's Laugerud, Colombia's Lopez Michelsen, and Costa Rica's Oduber. An editor of Bolivia's el Diario added, "Not unless some pinkos and Communists rig the attacks." [From the Congressional Record, Sept. 23, 1977 — E5807] Human Rights in Panama (By Hon. Robert J. Lagomarsino) Mr. Lagomarsino. Mr. Speaker, I would like to bring to the attention of my colleagues the January-February 1977 publication of the journal "Freedom at Issue" and "Comparative Survey of Freedom" ^ that it contains. The survey is published by Freedom House, a national organization whose board of trustees includes such persons as Zbigniew Brzezinski, National Security Advisor to Presi- dent Carter, Gale McGee, the U.S. Representative to the Organization of Ameri- can States, and the two distinguished Senators from New York, Jacob K. Javits and Daniel P. Moynihan. Freedom House has conducted country-by-country comparative surveys of the status of freedom in the world since 1972 as a complement to its more generalized yearly surveys. I believe that the results of this survey are extremely important in light of the strong stand President Carter has taken on human rights and the possible ratification of the recently signed treaties with the Republic of Panama. Judgment of countries was based on four categories: political rights, civil rights, status of freedom, and future outlook. Freedom, according to the survey's authors, is defineetuity because the only perpetuity which may finally remain here is the revolutionary process and its capacity to solve the people's problems — (Applause.) (Ahumada does not finish the sentence.) On the other hand — Mr. President, will you allow me? I will soon finish. Here's another problem. Up to now the number of U.S. soldiers in Panama has been unlimited. In military terms, this is known as the level of forces (nivel de fuerza) . Others call it force strength (pie de fuerza). So, then, it has been agreed, to avoid the impression — which is real and not imaginary — of an occupied country, an impression resulting from the unlimited presence of U.S. troops around us, that this force level or amount of soldiers will never, never — unless there is a worldwide conflict or an extremely serious uncontrollable situation, in which case we are not even going to have the resources to be aware of it — the number of U.S. soldiers in Panama can never be greater than the number of troops in the Panama National Guard. Therefore, our capacity for action will not be limited by an overwhelming foreign presence. (Applause.) Royo mentioned the flags question. In effect, even though it is a case of military sites managed by the United States, the flag flown there will be the Panamanian flag. They can put theirs inside, according to agreement they can do this. This point caused a tremendous bemoaning, but is logical. After all, they are North Americans and it is quite logical for them to struggle to prevent their flag from disappearing completely. But it must go inside. And even when it flies outside, it must be beside the Panamanian flag, and even when it is beside the Panamanian flag, the Panamanian flag must occupy the position of honor." Excerpt From Speech by Panamanian Education Minister Aristides Royo TO Assembly of Corregimiento Representatives at Justo Arosemena Palace in Panama City on 19 August Regarding the flags, here has also been an important recovery : Throughout all the territory that now constitutes the Canal Zone, excluding the office of the Canal Commission— with only this exceirtion — only the Panamanian flag will fly on the flagpoles. (Applause.) 99-592 O - 78 - 31 472 Excerpt From Speech by Panamanian Negotiator Edwin Fabrega to Assembly of Corregimiento to Representatives at Justo Arosemena Palace in Panama City Half of Fort Amador will revert to Panama with all the corresponding installa- tions on the 1st day of the treaty, as well as the islands of Naos, Perico and Flamenco. (Applause.) From the Bridge of the Americas you see all the installa- tions of the fuel tanks, of the Port of Balboa, and which extend to Diablo Heights, including the northern part of Diablo Heights, where there is an an antenna field. All this land will revert to Panama immediately and it will be known as the Balboa Port complex, including areas for expansion. Albrook Field will revert to Panama on the first day of the treaty, (applause) with two exceptions, namely, Gorgas Hospital, to be used for military use by the U.S. Armed Forces and U.S. civilian personnel, and the area where the Quarry Heights ofl5ces are now located, which will serve as headquarters of the combined military board which will be in charge of planning and carrying out everything concerned with the defense of the canal — a combined defense. This board will be evenly divided, that is, it will have the same number of representatives from Panama and the United States. The rest of Ancon Hill will revert to Panama on the first day of the treaty. The railroad with all its installations will also revert to Panama on the first day of the treaty, as well as a coastal strip, from beneath the Bridge of the Americas at the entrance of Farfan Beach to Veracruz so that the residents of Veracruz will not have to transmit a defense site. This strip has the best beaches closest to Panama City and everj- Panamanian may, as of that date, have access to those beaches, which are the best close to Panama City. On the Atlantic side, in the city of Colon, the port of Cristobal with all its in- stallations will revert to Panama on the first day of the treaty, (applause) as well as Rainbow City and the towns of Paraiso and Pedro Miguel. Excerpt From Speech by Panamanian Negotiator Romulo Escobar Bethan- court to Assembly of Corregimiento Representatives at Justo Arosemena Palace in Panama City on August 19 Mr. President, General Torrijos, distinguished representatives and general public : We will not report on two very controversial points in the negotiations — one is the neutrality pact between Panama and the United States and the other is the problem of the option to build a new sea-level canal. We feel that the best way to explain this is by pointing out the details of how this negotiation was conducted and what things Panama accepted or rejected, believe that will allow you to see the real scope of the neutrality pact. One of the conditions originally established by the United States before begin- ning negotiations with Panama called for a neutrality pact and a military pact between the two countries. The military pact had to be concluded before the end of this century so that it could go into effect after 2000. This created a deadlock in the negotiations for some time because Panama opposed the signing of a mili- tary pact. And it opposed such a pact because the military pact entailed two things : First, the U.S. military presence in Panama after the expiration of the new treaty. Second, as a great power, the United States is often involved in wars in other parts of the world and we did not want a situation in which, on the basis of a military pact, our country's future generations would be recpiired to fight in U.S. wars under the pretext that they were fighting because the war was being waged to defend the Panama Canal. That was a position I'anama maintained until the United States stopped insisting on the military pact, and discussions began only regarding the neutrality pact. One of the problems that arose had to do with granting preferential transit through the canal to U.S. warships. They said they had two problems : l^rst, they had to please their Pentagon and had to present them in this matter of the treaty. Second, thev said that since they are leaving after the expiration of the treaty they should at least have that (preferential treatment) because they had con- structed the canal. , , ^, ^ We told tliem that we admitted they had in effect constructed the canal, but that to put down in the neutrality pact that U.S. warships were entitled to preferential transit in relation to other ships violated the neutrality pact itself, contradicting the very idea of the pact we were negotiating. This was another subject of long 473 delxates and thorough analysis. They kept looking into their books, we into ours ; they kept quoting their treaty writers, we kept (luoting ours, for this is the way in which these debates are conducted. iSo this is the framework of the neutrality pact. The criticism being made against it— some of which you may have heard or read — by a number of people who like to nitpick is that we are giving the United States the right to intervene in our country after the year 2000. Those people believe that the right to inter- vene is granted, but nobody grants the big powers the right to intervene. They intervene wherever tliey damn well please with or without a pact. (Applause.) When they landed in Santo Domingo tiiey did not have any military pact with Santo Domingo, nor did they have any right to intervene in Santo Domingo. But just the same they landed there. But there are people here who believe that it is the articles in a code which tell a country whether or not it has the right to intervene. They do not know that it is the bayonets and cannons and the atomic bombs which give a country the right to intervene. A country like the United States can land its troops in Panama whenever it pleases after 2000 with or without a neutrality pact. But it cannot land its troops in Russia, even if Russia told them to do so. This is reality. In other words, with the neutrality pact we are not giving the United States the right to intrevene. What we are giving them is an assurance that the canal will remain permanently neutral, that we are not going to close the canal to their ships or those of any other country. Why this neutrality pact? Because they think that maybe in the year 2000 this country will become socialist and will turn into their enemy and they feel it is better to make sure right now that even if our country becomes socialist, it cannot prevent them from using the canal. To be even more frank, they do not need that neutrality pact to tell them whether or not they may intervene. They need it to show to their Congress in order to be able to tell their Congress : Look, we are turning the canal over to the Panamanians, but we still have the right to watch over them so they behave. That is the truth. It is a question of their internal policy. They are solving an internal problem regarding a Congress that is largely opposed to these negotiations and which even has members who liave not been elected of their own free will, turned into members of the U.S. Congress. They are Panamanians who live here and in Miami. (Applause.) The other problem we discussed was that of the option for the construction of a sea-level canal. In all these years the problem of a sea-level canal was hardly discussed at all at the negotiating table. There were about two talks on this. We discussed this, nothing came out of these discussions and then came the Bogota conference with the presidents. That is where the option problem really reached a crisis. It reached a crisis because a very direct and continuous communication was established among all the presidents meeting there and President Carter through negotiators Bunker and Linowitz as well as with us through Dr. Giogenes de la Rosa, who was there at the time, and our Ambassador Gabriel Lewis Galindo. But they made a proposal to us on that option and that is why the issue reached a crisis. They proposed that Panama grant them an option to build a sea-level canal without setting any date. Second, they wanted Panama to promise that no other country would construct a sea-level canal. We rejected that proposal in Bogota. We read it to the presidents. That was the proposal brought the previous evening by several of our negotiators and we read it to them. The negotiations between the two countries was practically broken in Bogota. So much so that I remember that at one point General Torrijos told the presidents : Well, we called this conference several days ago for a celebration of a new treaty and it turns out that we have come for the wake. The struggle between the two countries began in Bogota. And I say the two countries because the rest of the presidents got as involved as if they had been Panamanians. We must really be very grateful to the presidents that met with the general of Bogota. Regarding this problem they acted just like any of us ; they even wanted to walk out mad. The Mexican president wanted to get on his plane and leave ; he was very furious. They all became Panamanians regarding the option problem. When the United States finally realized that there was no way in w^hich an agreement could be reached regarding this option in the terms they were propos- ing and that the issue had reached an impasse, they asked for a recess. During that recess, we continued our discussions with the presidents meeting in Bogota. The Panamanian delegation then prepared a draft which all presidents liked. They said it was correct and fair. We then called the United States, they 474 examined it for a while and finally accepted it. I think that it would be a good idea to read the text of this draft to you so that you will see how the option problem came out. I read : Article 3. Possibility of building a third set of locks or a sea-level canal. First, the Republic of Panama and the United States of America acknowledge that a sea-level canal can be important for future international navigation. As a result of this, after approving the treaty of the existing canal and for the duration of this treay, both countries promise to study jointly the viability of such a canal. In the event that the need for such a canal is viewed favorably, they will negotiate its construction in the terms agreed on by both countries. This is how the option issue came out. (Applause.) As you can see, it is not even an option to build a sea-level canal. It is an option to promise to study the viability of it. That is the true option. The true commit- ment is to sit down with the United States to study whether or not it is viable to build a sea-level canal. If the two countries feel it is viable, then they will sit down to negotiate the terms agreed on by the two countries." Excerpt From Panamanian Foreign Ministry Document Summarizing the Proposed Treaty Terms, from a Broadcast by Panama City Domestic Serv- ices ON 19 August (Danilo Caballero and Arqueles Morales) The Foreign Ministry document goes on to say that the canal administration commission will not be allowed to carry out commercial operations and that these activities will be completely regulated by Panamanian laws. In this regard, the following activities and functions being carried out by the Panama Company and the C^anal Zone Govenment would cease : Wholesale and retail sales of merchandi.se of all types in commissaries, stores, optical shops and others ; the preparation of food and drink and milk products ; the operation of bakeries, public restaurants and cafeterias and the sale of arti- cles using automatic vending machines ; the operation of movie theaters, bowling alleys, billiard halls and other entertainment centers charging admission ; laun- dries and drycleaning facilities that are not oi>erated for official use; outlets to repair and service private automobiles or sell fuel and lubricants, including service stations, garages and outlets to repair or retread tires; repair shops for other privately owned property, including electronic and electrical home appli- cances, irons, motors and furniture ; cold storage and cargo warehouses that are not being operated for official use ; commercial supplying and servicing privately owned ships, including the sale of fuel and lubricants, towing services not related to the canal and other U.S. Government operations; the repair of private vessels except when it is necessary to remove damaged ships from the canal ; nonofficial printing plants ; ocean transportation for public use ; mortuary services and cemeteries; educational services, including .schools and libraries; the postal services; the customs, immigration and quarantine services, excluding those needed to ensure the cleanliness of the canal; the construction and repair of .ships and supplying them with water, fuel and lubricants; the docks and the movement of cargo and passengers." Excerpt From 19 August Question and Answer Session Between Panamanian Negotiators on Canal Treaty and National Assembly of Corregimiento Representatives at Justo Arosemena Palace in Panama City Education Minister Royo. Regarding the (luestion of whether Panama will have to repay the loans from the United States : In referring to discussions of economic a.sptn^ts, Don Gilberto, we are six^aking of two areas. One area is the payments which the United States makes to Panama and which are derived generally from the canal revenues. These include tolls derived from Panama's use of tlie ports of Balboa and Cristobal. Another, different area is the package which is called the economic cooper- ation agreement. That agreement has one goal : for Panama to achieve im- proved economic development, as Minister Ardito Barletta explained, and, on the day we have to administer the canal 100 i)ercent and defend it, for Panama to have a level of economic development that will allow it to assume that tremend- ous responsibility. 475 This economic cooperation agreement provides for loans which Panama de- finitely must repay. 1^'or example, the loan from the Eximport Bank will be $200 million, and that loan will be made through what are called concessionary loans which are long term — 20 and 30 years — with grace periods of 5 to 10 years and, moreover, at an interest rate of between 5.5 and 7 percent. This rate is what is called a soft interest rate and it allows Panama, at the end of 30 years when it repays the $200 million, the payment at that time, at the value current at that time, will be much less than the amount we are receiving today, (sentence as heard) For this reason, it is said that these are loans paid for by the devaluation of the currency itself." Representative Luis Castillo. Mr. President, distinguished negotiators, dear comrade : I would like to ask the negotiators about the plebiscite. Since this is the means by which the Panamanian people will ratify the treaty and is related to the ratification by the U.S. Congress, I would like to ask whether a date has been set for the plebiscite and whether it has considered that it is important for the plebiscite to be held before the U.S. Congress ratifies the treaty. The idea is that once the results of the plebiscite are known — and we feel sure the Pana- manian people will approve the treaty by a majority — this would have an impact on the U.S. Congress. RoMULo Escobar Bethancourt. About the plebiscite. The date for the plebiscite here in the Republic of Panama still has not been set, because naturally this depends on when General Torrijos and President Carter sign the treaty and also on the amount of time allowed for public debate. After that period for debate — if it is decided here in Panama that, let's say, the debate will take place over a period of 4 weeks beginning on such and such a date — the plebiscite will take place. But the date for it can be set as soon as the two chiefs of government sign the treaty, I understand that the electoral tribunal is already taking action and studying the mechanics of the plebiscite. We of course attach great importance to the plebiscite. I would point out that the revolutionary government is so honest and scrupulous regarding the negotiations with the United States that the 1972 constitution provides for this plebiscite. That is, a constitution dictated by this very govern- ment. What does this mean? Simply that, as General Torrijos has said from the beginning, the problem of relations with the United States is not the problem of one leader or one administration ; it is the problem of all Panamanians. If all Panamanians are to be affected for good or for ill by a treaty with the United States, then all Panamanians must have the right not only to express their opinions but to decide whether or not that treaty should stand. For the first time in the history of our republic and under our revolutionary government, that kind of political participation has been established. We honestly agree with you that in a plebiscite here, after our people become truly informed about this treaty and the profound change it implies for the country, an overwhelming majority will be in favor of the treaty. This revolutionary government, despite the fact that this is a small country, is the only one that has confronted the United States in a really dignified and strong manner. As for the U.S. Congress, there is a big problem, to be frank with you. They have a big problem, worse than you can imagine. The United States is a country where people have been brought up thinking that the Canal Zone and the Panama Canal belong to them. All tlieir lives they have been taught this in school, at home, through publications — that is the background of the American people. As a product of that training, they, or most of them, feel that this step which President Carter's administration wants to take is a step to give up part of the United States. Many of them feel that if the United States gives Panama juris- diction over the Canal Zone and the Panama Canal afterwards, it is as if they were giving up, for example, the Florida peninsula. Because that is the training which they have had. Logically, then, the problem goes to Congress. Why? Because the U.S. Congressman, as a good politician, acts as the instrument of those electing him. He is always aware of how the voter of the district or state that elects him feels. As there are sectors in the United States which feel as I have told you, there are congressmen who, because of their own training, because they were also educated that way, and, because they act according to the desires of those voting for them totally oppose the treaty with the Republic of Panama. Representative Luis Emilio Veces. I wish to clear up a point of order, because the secretary has declared that the vote was unanimous (for the resolution 476 approving the accomplishments of the Panamanian negotiators regarding the treaty). I wish to explain my abstention from voting. With the indulgence of those at the presidential table, the vice president, the cabinet ministers and fellow representatives. I wish to explain that I am incapable of begrudging the merits with which the resolution credits those persons abroad who have expressed their solidarity with our country. However, there is a basic issue which has caused me to abstain from voting for that resolution. It is the fact that I cannot share the pleasure of those at this meeting or the pleasure expressed by the government team today for a treaty which I have not yet seen. The agreement on principles as submitted by the negotiating team undoubtedly presents the positive portions of the agreements reached. Nevertheless, I do not want to talk about the agreement on principles excessively, because I am not able to express a knowledgeable opinion. I want to inform my fellow representatives and the government team of two or three concerns which have caused me to abstain from voting for that resolution. I have already expressed my concerns to Captain Cealagan (head of the General Directorate for Community Development — DIGEDCOM) who visited the Chorrera Municipal Council during its last session. According to the national press and the government team, we have ample guarantees permitting a debate on the new treaty draft. Nevertheless, the same government team has made a series of threats of a political nature against persons who oppose the treaty. I wish to state that in such a situation it would appear that we are left only to take it or leave it. I do believe that one of the statements made by Romulo Escobar Bethancourt is true. Right now it would appear that any academic lucubration of the treaty is unnecessary because it would in no way alter the agreement on principles or the treaty draft, because the negotiating stage has ended. I am also worried about a number of ideas being expressed, such as that those who oppose the government or the treaty are traitors to the fatherland. These are ideas which given the pretense that here is a democratic atmosphere, constitute a threat for anyone in this country who has the power to reason. Escobar Bethancourt. My reply to Representative Veces is the following : We are promoting a public and open debate and we are not leveling political threats at anyone. We believe that this is going to be a very democratic debate. However, it will probably not be a one-way democracy, but a two-way democracy. For ex- ample, if a person is against the treaty drafts and states it publicly, we will pub- licly explain the points which the person is opposed to. That is what we call a debate. However, if a person makes a statement in a newspaper, as we observed recent- ly, that not even Bunau-Varilla would have done this — "that is a democracy," as one published statement read — that person had better not believe that we will remain silent after being compared to Bunau-Varilla. He should be prepared for our reply. This is not a threat. Some individuals believe that democracy con- sists of criticizing the government and that the government must simply accept it. We will not do that. Any i)erson who during the debate objects to the approval of the treaties because Torrijos is a dictator will receive our reply explaining why we do not consider Torrijos a dictator, and in addition we will reprimand that person. That will be the debate, at whatever level people choose to engage in it, but whoever decides to enter the debate should know that he will get a rei)ly. It would be a threat if we said that any(me who oi>p()ses the treaty would be put in jail, fired from his job, or persecuted. That would be a threat. However, hav- ing the right to reply to an individual's proposals, I would call true democracy, Veces." U.S. House of Representatives, Committee on Merchant Marine and Fisheries, Washington, D.C., August 22, 1977. The Editor, the New York Times, New York, N.Y. To the Editor: The Times August 20 editorial response to my letter on the Panama Canal giveaway continues to spread gross misinformation, and requires immediate comment. Your assertion that only two American warships passed through the Canal in 1976 is distressingly misleading. We are not at war, which eases the requirement 477 for moving warships; and second, official Canal Company records show 85 U.S. government vessels transited in 11)76. You deny the military-and naval importance of the Canal in direct contravention of testimony before my Committee from for- mer Chief of Naval Operations, Admiral Thomas Moorer, who unequivocally states that "this interoceanic waterway is as important, if not more so, than ever." His statement was joined by three additional former Chiefs of Naval Operations (Burke, Carney and Anderson) in a letter to the President, and Moorer's testi- mony disagreed at length with the politically guided views of the current Joint Chiefs of Staff. Your statement "regarding commercial tlseage" ignores the immense value of the Canal's existence to American transfers of goods. Without it : 1. Average annual consumption of fuel by ocean carriers operating in U.S. foreign trade would increase 71 percent ; 2. Average shipping time would increase by 31 days ; 3. Delivered price of U.S. exports would increase by $932 million annually ; 4. Delivered price of U.S. imports would increase $583 million annually. Which brings us, of course, to the proposed treaty's "guarantee of passage through the Canal." We already control the Canal and guarantee passage, a right which would, under the new treaty, be surrendered to a despotic dictator who maintains military control over a judiciary and legislature which have been sub- jugated to his personal police force, a.k.a. Guardia Nacionale ; a dictator w^ho si)ecifically stated that, absent a treaty, he would "walk the Ho Chi Minh trail of blood" with the sacrifice of an entire generation of Panamanian youth in a thinly veiled threat of war ; a dictator who cannot handle his nation's garbage collection problems, much less the operation of the world's only interoceanic trade route. He wants the Canal primarily to bail himself out of a $2 billion national debt which requires almost 40 percent of his entire national budget for debt service alone. Your response is once again victim of false interpretation of carefully selected numbers. You concede that 70 percent of Canal traffic either originates or ter- minates at an American port. If, as you claim, that represents only 10 percent of American foreign trade, then the remaining 90 percent is American domestic trade which is adversely affected by loss of American control of the Canal. The Administration's own figures show that 21 percent of all American seaborne trade passes through the Canal, including virtually 100 percent of American intercoastal traffic — including, incidentally, most of the Alaskan oil destined for Eastern ports. I am apalled that the Times * * * and the State Department * * * would place the economic future of this nation and the defense of the only water route between the two oceans into such tenuous, unstable and unreliable hands. We already control the Canal and guarantee passage through 70 years of legal prec- edent, and the Constitution states that only the Congress has the right to transfer such property to foreign hands. Any treaty which proposes to do so without Con- gressional scrutiny is on a shaky foundation at best. John M. Muephy, Chairman. U.S. House of Representatives, Committee on Merchant Marine and Fisheries, Washington, D.C., August 22, 1977. The Editor, the New York Times, New York, N.Y. To THE Editor : James Reston's article entitled "Panama ; What's the Rush," raises a question which has been troubling me as Chairman of the Merchant Marine and Fisheries Committee of the House of Representatives which has jurisdiction over the Panama Canal. Why has the State Department been blitzing the country with press releases trying to sell a treaty which Ambassadors Bunker and Linowitz, in testimony before my Committee on August 17, stated "is still being negotiated". In fact, the Committee Members were requested not to ask any indelicate questions which might compromise such continuing negotiations. Ambassador Linowitz even chastized one Committee Member for referring to General Torrijos as a "dictator", while Ambassador Bunker preferred using the term "guided press" in response to questions about the totally controlled media in Panama. Who has been paying for the public relations firms which have been retained to sell this treaty to the American public, and at what cost? Why was the public relations blitz orchestrated to coincide with the Congressional recess? Why is there even a suggestion of sidestepping the Constitutional perogatives of the 478 House of Representatives? These are clearly set forth in Article 4, Section 3, Clause 2, which provides that Congress has "the power to dispose of and make all rules and regulations respecting the territory or other property of the United States." The United States Supreme Court has held that the powers of the Congress to dispose of land is exclusive to Congress, which means both the House and Senate. As Mr. Reston has stated, "the Canal issue is much wider than Panama." And so is the question of Congressional jurisdiction. It goes beyond the giveaway of American assets totalling several billion dollars, and goes to the very principle of separation of powers and the fundamental precepts of the Constitution. A full and open debate of the issues will also serve to educate the public and media as to the vital importance of the Panama Canal to world shipping, and to the facts that : 70 percent of all shipping through the Canal originates or termi- nates at U.S. ports; 96 percent of the U.S. merchant fleet can transit the Canal; 93 percent of all world shipping can transit the Canal ; 98 percent of our naval vessels can transit the Canal, and that the Canal is essential because we do not, in fact have a two-ocean Navy. It is my intention to continue Congressional hearings on this vital matter so that all its facets can be fully and fairly explored and resolved. If the new treaty is a good one, it will be doubly good after approval in a Constitutional manner by both Houses of Congress. John M. Murphy, Chairman. The Nicaragua Canal Story (By Lt. Col. H. R. Haar, Jr., Corps of Engineers, U.S. Army) Editor's Note: In view of the r^ecent events in Panama and the ques- tions that have arisen as to the future of the Panama Canal, we are re- printing here "The Nicaragua Canal Story,'' by Lt. Col. {th^n Maj.) H. R. Haar, Jr. {M. E. May-June 1956]. The article provides background infor- mation and pertinent comments on Central American canal sites. The history of the proposed Xicaraguan Canal Project dates back to the 15th Century, when explorers began their search for a new short water route to the East. The Xicaraguan Canal story is also, in part, a story of the Panama Canal and other Isthmian canal proposals, all of which have been closely related over the years. The fact that the Nicaraguan canal would probably have been built instead of the Panama Canal except for the notorious but successful lobbying of a small group of individuals makes the story fascinating. The setting is the Republic of Nicaragua bounded by the Caribbean Sea on the east, the Pacific Ocean on the west, the Republics of Honduras and San Salvador on the northeast and northwest, and the Republic of Costa Rica on the .south. It is located approximately half way between the southern tip of Mexico and Panama. Nicaragua has an area of about 59,000 square miles and is about equal in size to the New England states minus Rhode Island and Connecticut, or to the State of Florida alone. The largest of the five Central American republics, it had a population of just over 1,000,000 by the 1950 census. Erupting volcanoes, intrigue, a postage stamp, international power politics, lobbying on a grand scale, and an American revolutionist and filibusterer who became president of Nicaragua are all a part of the Nicaragua Canal story. It begins with Columbus who touched the Nicaraguan shores while searching for a new route to the East in 1502 and continues to the present day. The first part of the story ends in 1902 with a close finish between Nicaragua and Panama in the race for the canal site with Panama the winner by a nose. The rest of the story is still in progress and includes a United States canal treaty with Nicaragua in 1916, a full-scale United States Army canal route survey across Nicaragua in 1931, President Roosevelt's order for a barge canal survey across Nicaragua in 1940, and study of Nicaragua by the Governor of the Panama Canal in 1947 as one possible solution to the future expansion program required for the Panama Canal. The final chapter should be forthcoming within the next fifteen years. EARLY development In the year 1513, Vasco Nunez de Balboa, Governor of Castilla de Ora, crossed the Isthmus of Panama in search of the Great South Sea, and discovered the Pacific Ocean in September of that year. Alvaro de Saavedra Ceron, who accom- panied Balboa on this trip as engineer, later became one of the lieutenants of Hernando Cortez. Cortez wrote the King of Spain (Charles V) in 1524, that if a strait should be found he would consider it the greatest service he had rendered, and, at the same time, he recommended that if a strait could not be found, that one should be made by the construction of a canal acro.ss the Isthmus at Tehuan- tepec in Southern Mexico, Alvaro de Saavedra doubted the existence of a strait and, agreeing with Cortez that one should be constructed, he prepared plans for a canal to be built along the route which he had followed with Balboa in 1513. He died, however, as he was getting ready to lay his plans before the King of Spain, after this, Charles V had surveys made for a canal but reports submitted consid- ered the route impracticable. Philip II (successor of Charles V) sent a party of engineers in 1567 to survey the Nicaraguan route but again the report was unfavorable. However, the King was still in favor of a canal and laid the proposal before the Dominican Friars. The Friars desired to obey the mandates of the King, but being in ignorance of a solution to this technical problem, turned to the Scriptures (479) 480 for consolation and inspiration. In the Scriptures they found the following verse which they concluded had a direct reference to a canal : "What God hath joined together, let not man put asunder." The quotation was the basis for an unfavorable report by the Friars and was accepted by King Philip as sufficient reason to abandon further consideration of the subject. Another canal survey was ordered in 1616, and in 1701 a report was published, pointing out the great advantages of a canal to commerce. Late in the 18th Century, England made a series of examinations with a view to constructing a canal. Lord Nelson and Baron Von Humboldt served as Eng- land's representatives in this study. Their report considered routes in North and South America but recommended that the four most favorable routes were those of Tehuantepec in Mexico, Nicaragua, Panama, and the Darien via the Napipa and Atrato Rivers. Of side interest on this report is a remarkable prophecy made by Goethe at the time : "I therefore repeat that it is absolutely indispensable for the United States to effect a passage from the Mexican Gulf to the Pacific Ocean ; and I am certain that they will do it. * * * I should like to see another thing — a junction of the Danube and the Rhine ; but this undertaking is so gigantic that I have grave doubts of its completion * * * and, thirdly and lastly, I should wish to see England in possession of a canal through the Isthmus of Suez. Would I could live to see these three great works. It would be well worth the trouble to last some fifty years more for this very purpose." Again in 1814, in an attempt to bolster its waning influence in its Central American colonies, Spain passed a formal decree in favor of the construction of a canal through the Isthmus but nothing came of this action. Altogether, thirty American Isthmian canal routes have been studied at one time or another in an attempt to determine the one most practical. The American Isthmus is defined as the area limited on the north by the Isthmus of Tehuan- tepec, Mexico, and on the south by the Arato River in Colombia. The routes con- sidered are in these general locations: Tehuantepec (Mexico), Nicaragua, Chiri- qui (Panama), immediate vicinity of the existing Panama Canal, San Bias (Pan- ama), Caledonia Bay (Panama), Tuyra River (Panama and Colombia), and Atrato River ( Colombia ) . The American Isthmus has a length of about 1,800 miles. The Continental Divide which- extends along the full length of the Isthmus consists of a fairly continuous mountain range that rises to a maximum elevation of about 14,000 feet above sea level. Possible canal routes occur where the crest of the ridge is low and the Isthmus is narrow or intersected by large rivers and lakes. The Nicaragua route has received a great deal of study and consideration for centuries. In 1825 an envoy extraordinary from the new Federation of Central America (of w^hich Nicaragua was a part) called the canal project to the special attention of the United States Government and requested its co-operation in preference to any other nation. The envoy also proposed a treaty to secure the advantages of a canal to the two nations. The United States appointed a charge d'affaires who was instructed to assure the Government of Central America of his government's interest in the canal project and to investigate the facilities offered by the route. In 1826 a contract was made between the Government of Central America and an agent of a New York company which created the "Central American and United States Atlantic and Pacific Canal Company." Many distinguished men of the day, including De Witt Clinton, were connected with the project, but the plan fell through. As a result of a Senate resolution of March 1835 the President of the United States sent a special agent to investigate the canal routes of Panama and Nica- ragua. Difficulty in procuring a conveyance to the River San Juun in Nicaragua forced the agent to visit Panama first. Other adverse circumstances prevented his reaching Nicaragua before his return to Washington. Shortly after his return he died, but his report indicated that he did not consider a ship canal practicable across the Isthmus of Panama. MOSQUITOES AND THE BRITISH The British made strong efforts to gain control of an interest in a canal through Nicaragua. These efforts consisted in securing control over nearly the entire east coast of Nicaragua by maintaining a loose form of protectorate over an Indian Kingdom in that area called the "Mosquito Kingdom." 481 The British claims in the Mosquito Territory and in Belize (British Honduras) began around 1630 when small settlements of buccaneers and logwood cutters were established on the coast. Originally, the Mosquito Kingdom covered an area about 225 miles long and 40 miles wide, but it was unofficially expanded by British extremists to include the entire Caribbean coast of Nicaragua. The Mos- quito Indians numbered around 1,500 and were a Carib people mixed with Negro and some white stock. The British Government considered that these Indians and their territory did not belong to any of the Republics from the old Spanish Empire as they had never been conquered by the Spanish. The view was created by the British to further their interests in rivalry which was developing between Britain and the United States for commercial supremacy in the Western Hemi- sphere. The British did not object to the building of a canal through Nicaragua but were determined to prevent the United States from obtaining exclusive rights in or control of such a canal. The active period of the British intervention in the Mosquito area started in 1841. The British landed at San Juan del Norte in August, whereupon the Mos- quito King raised the Mosquito flag in place of the Nicaraguan flag, reaffirmed the British protectorate, claimed the port in the name of the Mosquito Kingdom and forcefully deported the Nicaraguan commandant of the town. This action secured control for the British of a major portion of the proposed canal route from the Atlantic side. The route was to begin at San Juan del Norte and continue up the San Juan River approximately 100 miles to Lake Nicaragua. The British claimed for the Mosquito Kingdom (in addition to the Caribbean coastline) the area from San Juan del Norte up the San Juan River to the Machua Rapids, which was more than half the length of the San Juan River. Many disturbances between the British and the United States and Nicaragua took place as a result of the British action until around 1860. The Clayton-Bulwer treaty in 1850 between the United States and Great Britain was an attempt on the part of the United States to straighten out this affair. The treaty stipulated, in general, that neither the United States nor Britain would obtain or maintain exclusive control over a canal route or would ever take possession of or fortify any part of Central America. The British made one important reservation that actually weakened the value of the treaty. This was a note sent to the Secretary of State (which was not made known to Congress at the time) by the British in which they stated that they did not "understand the engagements of the convention to apply to Her Majesty's settlement at Honduras or its dependencies." The dependencies in this case undoubtedly included the Mosquito Territory. This treaty caused trouble until It was superseded by the Hay-Pauncefote Treaty more than 50 years later. A major portion of the misunderstanding over the Mosquito Territory was re- solved by the treaty of Managua between Great Britain and Nicaragua in 1860. This treaty provided for : Great Britain to abandon all claims to a protectorate over the Mosquito Kingdom, San Juan del Norte to remain a free port under Nicaraguan sovereignty, Nicaragua to consent to pay the Mosquito Indians $5,000 a year for ten years as compensation for the loss of their independence and to establish a reservation for the Indians in which they would enjoy autonomy. WILLIAM WALKER INCIDENT From 1850 to 1852 the first accurate survey of the Nicaraguan route was made by O. M. Childs at the instance of the existing Transit Company. This Transit Company had established transisthmian communication with California by steamer from Greytown, Nicaragua, via the San Juan River to Virgin Bay on the west shore of Lake Nicaragua, and thence by stage to San Juan del Sur, Nicaragua, a small natural harbor on the Pacific coast about 8 miles southeast of Brito. The navigation of the San Juan River proved to be troublesome and un- certain at low water and the Transit Company sought means to improve these conditions and to continue the water route across the narrow neck of land that separated Lake Nicaragua and the Pacific Ocean. It, therefore, desired to secure a continuous depth of 17 feet. The Transit Company was active in hauling passen- gers bound for the go'ld rush in California at the time. The Company's development and operations began in 1849, when Cornelius Vanderbilt contracted with the Government of Nicaragua to construct a ijassage using the San Juan River, Lake Nicaragua, and a 13-mile canal for the purpose. With this contract he received the right to transport passengers across the Isthmus, and for this privilege he was to pay to Nicaragua $10,000 annually and 10 per cent of his profits. His account- 482 ants saw to it that there were no profits. His line became known as tlie Accessory Transit Company and it did a rich business. Tlie last stage of the transit — over the 13-mile strip — was on the only macadamized road in Nicaragua. At this ix)int William Walker, an American who played an important role in the manipulation of the Transit Company (and who became President of Nica- ragua in 1856) . enters the story. Walker, after an unsuccessful revolutionary expedition into Mexico in 1853, returned to the United States and entered the newspaper business. However, at the urging of an opportunist friend. Walker sailed from San Francisco in 1855, with a group of 58 men. for Nicaragua. In order to establish himself, Walker hgjj obtained permission from a political party opposed to the government then in power in Nicaragua, to enlist 300 colonists to become citizens of Nicaragua and a guarantee of the privilege of his men to bear arms. Walker became a power in Nicaragua and. in 1856. deposed the president and had himself elected to the presidency, a position he held until 1857. While president of Nicaragua, Walker used the Transit Company to transport additional volunteers for his army from the United States to Nicaragua. How- ever, a few months before becoming president he arranged a deal whereby Com- modore Vanderbilt's original partners gained control of the company during the absence of the Commodore in Europe. Walker was deposed as president of Nicaragua in 1857 by a combination of Nicaragua forces, an allied army from Costa Rica, Honduras, and Guatemala, and action of the United States Navy. He was executed by an Honduranian firing squad in 1860, during an attempt to return to Nicaragua. SURVEYS AND PRELIMIXARY WORKS The final route selected by Childs started at Greytown on the Caribbean Sea, thence ran mainly via the San Juan River to Lake Nicaragua to a point a few miles below San Jorge on the west shore of the lake, and thence via the Lajas and Rio Grande Rivers to Brito on the Pacific. This route has more or less been ac- cepted as the best route in Nicaragua. It involves a 172-mile lock type canal to raise ships from each ocean to the summit level of 110 feet of Lake Nicaragua. At current prices, and with modifications required by present-day specifications, it is estimated that this lock type canal would take ten years to build and would cost $3.5 billion. Altogether seven possible Nicaraguan routes have been considered at one time or another. Three of these are along the same general route from Grey- town via the San Juan River to Lake Nicaragua, thence to Lake Managua, and from Lake Managua via various routes to the Pacific. These three routes are com- pletely impractical today because of their excessive lengths and high cost of construction. Tliree of the remaining four routes follow Childs' plan except for the exit point on the Pacific, and the fourth route would necessitate skirting the level canal in order to avoid draining Lake Nicaragua. 483 484 After the 1852 survey by Childs the United States had surveys made of the Nicaragua!! route by Navy Comdrs. Chester Hatfield a!id E. P. Lull i!i 1872 and 1873 (which confir!ned (Childs' findings) ; by A. G. Menocal, a civil engineer of the Navy, in 1885 ; and by the Nicaragua Canal Commission in 1897-1899. The Maritime Canal Company started construction work on a Nicaraguan canal on October 8, 1889. The Nicaragua Canal Construction Company which had a con- tract with the Maritime Canal Company to do the actual work suspended opera- tions in 1893, at which time all work ceased. During this 3-year period a telegraph line was constructed from Greytown to El Castillo on the San Juan River. A single track railroad llVa miles in length from Greytown to a point between the sites of the first two locks w^as built and thirty-!iine buildings were erected. A jetty or pier 42 feet by 937 feet long was constructed to protect an entrance into Greytown Lagoon from the sea. A section of the canal was dredged a distance of a little over 4,(X)0 feet. The canal company claimed to have removed rock from the San Juan River at the Machuca Rapids, and to have cleared timber from the canal line for a distance of 20 miles from the Atlantic coast, and for 8 miles along the west side of Lake Nicaragua on the canal line. Most of the property (including six dredges) of the canal company went to ruin and eventually the Nicaraguan Government took possession of all that remained. In 1889-1901 the Isthmian Canal Commission headed by Rear Adm. John G. Walker, United States Navy, Retired, was directed by the United States to make an investigation of the Panama and Nicaragua routes to determine which was the more practical and feasible route. The Commission was also asked to estimate the probable cost and to find out what treaties w^ould be required. This Commission played the. deciding role in the eventual selection of an Isthmian canal route. POSTAGE STAMP INCIDENT The story behind the final selection of Panama over Nicaragua as the canal route starts in 1879 with the selection of Panama as a sea level route to be built by the French. At an international canal conference in Paris in that year, with the vote for the Panama route and the designation of the builder of the Suez Canal, Ferdinand de Lesseps, as the director of the enterprise, the Panama Canal project was oflBcially undertaken. De Lesseps, described as neither an engineer nor a financier but rater a promoter, estimated the cost for the sea level canal in Pan- ama at $141,720,000. This sum included buying out the rights of another organiza- tion which had a concession to build the canal. The cause of the failure of this effort in 1888 has been ascribed to mismanagement, extravagance, corruption, and a high death rate from disease. A new French company took over the canal project in 1894, and planned a lock type canal. This new company had difficulty in raising suflScient capital and in 1898 it offered to sell the property to the United States. It was at this time that interest in a canal moved from Paris to Washington. During this period, and for many years prior to it, the principal interest of the United States for a canal site was in Nicaragua rather tha!i Panama. Two men are credited with changing this interest : Philippe Bunau-Varilla and William Nelson Cromwell. The latter was an American — a director and counsel of the Panama Railroad Company of which he was also a stockholder. The directors of the French Canal project in Pana!na became alar!ned by the continued popularity in the United States of the Nicaraguan route and in 1896 appointed the law firm in which Cromwell w^as a partner as its ge!ieral counsel in the United States. Cromwell organized a staff of writers and printed three large volumes covering all phases of the Panama project in a very favorable light. Philii)pe Bunau-Varilla. a Frenchman who was born in 1859 and graduated from the Fa'oW Polytechniciue in IHSO, went to Panama in 1884 as chief engineer of the Pacific division of the canal. During a 4-month period from late ISS.l to 1886, he served as a temporary general director for the entire canal project. In September 1886 he resigned and went to work in a private engineering firm of which his brother was a partner. From the time of the failure of the first French construc- tion in Panama in 1888 until 1894 Bunau-Varilla worked hard in France for the completion of the canal project. When the Compagnie Nouvelle was incorporated and started construction on the canal again in 1894 he purchased stock in the company and took an active interest in the project. Bunau-Varilla's arguments in favor of the Panama Ca!ial were always extremely biased and persuasive. The United States was !iot interested in buying the Panama Canal from the French in 1898. At that time the United States still favored the Nicaraguan route and there had been much oi)position to the idea of public ownership. This opposi- 485 tion to public ownership, however, was dispelled by an incident in the Spanish- American War. The battleship Oregon left San Francisco on March 19, 1898, and after traveling 13,000 miles in sixty-eight days around the southern tip of South America, arrived in Key West on May 26. This journey served to demonstrate the need of a canal and the government operation of it. In January 1899 a bill was introduced in the Senate by Senator John Tyler Morgan of Alabama, chairman of the Committee on Interoceanic Canals, provid- ing for the construction, operation, and fortification of a Nicaragua Canal by the United States. The Senate passed the bill but in the House the bill ran into diflS- culties on four counts : a representative in the House wanted to sponsor a similar bill with his own name attached ; the validity of the title to the property held by an American company was questionable ; obstruction was being thrown in the way by the previously mentioned Cromwell ; and there was British objection to the fortification clause. These diflBculties resulted in postponement of a decision until the next session of Congress, and in the appointment of an Isthmian Canal Com- mission under Admiral Walker. The Isthmian Canal Commission investigated not only Nicaragua but also vari- ous routes in Panama. Its report indicated that the total cost of a Nicaraguan canal would be $189,864,062 compared to $144,233,358 for the Panama Canal but these figures did not include the sum of $109,141,500 which the French wanted for their assets in Panama. The Nicaraguan route was recommended. In 1900, Representative William Hepburn of Iowa, who had helped block Senator Morgan's bill the previous year, introduced his own bill for the Nicaragua Canal which passed the House by a vote of 224 to 36 and was sent to the Senate. In the Senate action on the bill was delayed. In the meantime, the Isthmian Canal Commission report came out and Hepburn secured the passage of another measure in the House, appropriating $180,000,000 for the construction of the Nicaragua Canal by a vote of 308 to 2. Senator Morgan attempted to push the bill through the Senate but a supplementary report of the Isthmian Canal Com- mission was issued which reversed its original recommendation for Nicaragua and recommended Panama, after the French company reduced their asking price from $109,141,500 to $40,000,000. Thus the entire situation was altered. The result was the passage by Congress of the Spooner amendment which authorized the President to purchase the French Compagnie Nouvelle's assets and to acquire from Colombia a canal strip and, if this failed, then to negotiate treaties with Nicaragua and Costa Rica to construct the canal through Nicaragua. Another key figure in Congress in favor of the Panama route had been Senator Marcus Hanna of Ohio. As a member of the Interoceanic Canals Committee, he blocked Senator Morgan's various moves to gain a decision for Nicaragua. He also drafted a minority report recommending the Spooner amendment in the Senate and his outstanding speech in favor of tEe amendment helped to put it across. In 1901 Bunau-Varilla came to the United States to push his campaign in favor of Panama. During his visit he had a pleasant interview with President McKinley, and a near fist fight with Senator Morgan. He published a pamphlet entitled Panama or Nicaragua. After a few months he returned to France and worked hard in an unsuccessful attempt to get the French people and Govern- ment interested in the canal again. In 1902 he returned to Washington and pub- lished a pamphlet with diagrams designed to show the superiority of the Panama route over the Nicaragua route. Senator Hanna used this pamphlet with great success in his fight for the Spooner Act. In May 1902, about one month prior to the opening of the debate in Congress on the Spooner amendment, a volcano in Martinique erupted destroying a city and killing 40,000 people. This incident played directly into the hands of Bunau- Varilla. Panama advocates had always pointed out the relative mildness of earthquakes in Panama compared to the menace of numerous volcanoes in Nicaragua and the frequent earthquakes there. Although it is true that volcanoes are numerous in Nicaragua, most of them had shown no signs of activity since the time of the Spanish. The nearest volcano in Nicaragua to the canal route was some 13 miles away and 20 miles from the nearest lock. An old Spanish fort with a central tower 60 feet in height, built in 1675 along the canal route in Nicaragua, is still standing, and was used as proof that earthquakes in Nic- aragua were not severe. Bunau-Varilla at this time sent to every Senator a copy of his Panama or Nic- aragua pamphlet. Senator Hanna called the Senate's attention to a map showing the active craters of Central America. Bunau-Varilla also furnished material to the New York Sun, for a series of articles on volcanoes. A few days after the 486 Martinique eruption, the newspapers published an article on the eruption of a volcano with considerable damage in Nicaragua. These reports were promptly denied by the President of Nicaragua which produced favorable reaction for Nicaragua and created some unfavorable publicity for Senator Hanna and Bunau-Varilla. However, Bunau-Varilla was to have the last word. He re- membered that in 1900 Nicaragua had issued a stamp series showing the volcano Momotombo erupting. This was the volcano that had been reported as erupting in the newspaper. He secured copies of this stamp and sent one to every Senator and to every doubting Representative three days prior to the vote on the Spooner amendment. The amendment passed and the Panama Canal was built. CONCLUSION In 1914 a treaty between the United States and Nicaragua was signed in Washington which gave the United States in perpetuity the exclusive prt)prietary rights to construct, operate, and maintain an interoceanic canal across Nica- ragua. This treaty, known as the Bryan-Chamorro Treaty, was ratified and pro- claimed in 1916. The United States as consideration paid Nicaragua $3,000,000 for this treaty. The United States was further granted by this treaty a ninety-nine year lease (with option to renew for a like period) in the Nicaraguan-owned islands in the Caribbean Sea known as Great Corn and Little Com Islands and the right to establish, operate, and maintain a naval base on any Nicaraguan territory bor- dering upon the Gulf of Fonsec which is located on the Pacific northern tip of Nicaragua. Costa Rica, Salvador, and Honduras protested this treaty on various occasions on the basis that they held certain rights which should be considered in such a treaty. In 1929 Congress authorized a new study of the Nicaraguan canal route for the purpose of ascertaining the practicability and probable cost of constructing and maintaining an interoceanic ship canal across the Republic of Nicaragua. This survey was accomplished under the command of Lt. Col. Daniel I. Sultan, Corps of Engineers, who utilized a provisional battalion designate^l as the United States Army Engineer Battalion in Nicaragua consisting of 25 oflicers and 295 enlisted men. The survey was completed in 1931, and Colonel Sultan stated in his report that a lock type canal across Nicaragua was feasible; it pre- sented no problems of design ; its total cost including defense would be $722,000,- 000; and it would require ten years for the engineering work of construction. In 1939-1940 a barge canal survey by the Corps of Engineers across Nicaragua was completed but no action taken on this suney. In Colonel Sultan's 1931 report he recommended that congressional authoriza- tion be secured for continuing the gathering of hydrological data by personnel operating in Nicaragua under the direction of the Secretary- of War and the supervision of the Chief of Engineers. Congressional authorization was granted and this work has been carried on from 1931 to date by Army Engineer person- nel in Nicaragua. The prospect for a Nicaraguan canal is not apparent at this time. A study by the Governor of the Panama Canal was completed in 1947 to determine what should be done when the Panama Canal becomes inadequate (estimated to be between 1960 and 1975) to handle increased trafiic. Solutions vary from a second canal to supplement the present Panama Canal to its conversion to sea level. These solutions will have to be weighed by Congress. Meanwhile, Nicaragua still maintains high hope that some day "the big ditch" will be constructed across her country. The Problem in Panama Ellsworth Bunker, so-recently our esteemed Ambassador to the Republic of Vietnam, and presently in charge of negotiating an adjustment of treaty ar- rangements with the Republic of Panama, has announced the conclusion of a broad negotiating agreement committing the United States to surrender its sovereign rights in the Canal Zone. The change would be made through the negotiation of new treaties for operation and defense of the Canal. The announcement was accompanied by sympathetic propaganda in the press, affecting to reassure our people that Canal Zone sovereignty is a relic of the colonial era which affronts our neighbor, Panama, arid must be relinquished to restore good relations. We think such treatment is a serious disservice to an important question of policy. When the United States became interested in building a canal at Panama, the isthmus was a disease-ridden jungle area in which a French company, in twenty years of effort and at a cost of 20,000 lives, had failed utterly to over- come the problems of sanitation and engineering. In a decade of great invest- ment of money, energy and both medical and engineering skills, the United States transformed the country of Panama, as well as the Zone, and in 1914 opened the waterway. To protect this investment, which was to be for the ages, the United States, under the terms of the Hay-Bunau-Varilla Treaty of 1903 with Panama, had taken full rights of sovereignty in perpetuity to a zone ten miles wide embracing the Canal route. It had also undertaken, in the Hay-Pauncefote Treaty of 1901 with Great Britain, to operate the Canal for world commerce with no special privileges for U.S. shippers. It is estimated that the net cost of the Canal to the United States to date, including defense and not including interest on investment, has been about $6 billion. Until the riots in Panama in January, 1964, the United States had made concessions to Panama on various aspects of the 1903 Treaty but had firmly resisted claims for relinquishment of sovereignty. It is this apparent change of position on the perpetuity of U.S. sovereignty which raises important new questions of policy. Under the 1903 Treaty, the authority and jurisdiction of the United States in the Canal Zone are legally unchallengeable. The Canal, the U.S. investment in it, and the interests of world commerce are secure. Under the proposed retrocession of sovereign powers to Panama, that Republic would acquire sovereign rights and authority over the operation and defense of the Canal ; and the United States would then hold any such rights only by virtue of its treaty with Panama. Against eviction by a hostile government in Panama, the United States would have no more legal standing than Britain had against Egypt in its base at Suez in 1951. The population of Panama is about the same as that of Detroit, about 1.5 million. The proposition before us is that Panama holds some inherent right of sovereignty which entitles it to take over this high American investment and operate it for its own benefit. It is perfectly clear that Panama has no such right today, and that it will not have such authority over this critical waterway unless the United States now cedes this authority to Panama. We suggest that to enter such negotiations today is a serious abandonment of U.S. authority and responsibility. To confide this crucial waterway to the nominal control of a small country which is ill-qualified to administer or defend it is an act of Great Power irresponsibility. If Great Britain had, in 1951, asserted the world interest in Suez and committed military forces to defend that interest, the Canal would not have been closed but would today be a lively artery of commerce bringing a great tributory to the people of Egypt. The belief of some officials that U.S. operation and defense of the Canal under treaty provisions, instead of under sovereign authority, would eliminate the (487) 488 friction of recent years is a calamitous misjudgment of the present scene. Marxist-I^ninist subversion would be intensified by such a retreat. Friction would mount and the U.S. position would become intolerable. The United States would be compelled to use force against the Republic of Panama, or to withdraw and allow the Canal to be operated and defended by another lessee. That is a prospect which no President should impose on his succeessors. If U.S. sovereignty is to be surrendered in two decades or five decades, that decision should be made by Americans who will be in charge of national policy at that time. The only proper consideration for our leaders today is whether the United States should surrender sovereignty here and now. If they will not act aflirmatively now, they should not prejudice the right of another generation to act in its time. Panama Canal Plays Vital U.S. Business Role IMPORTANCE TO TRADE EXPECTED TO SOAR (By Guy Halverson, Business and Financial Correspondent of The Christian Science Monitor) Washington. — The Panama Canal — caught in a swirling debate over long- range control of the 63-year-old watenvay — is expected to become increasingly important to world commerce during the next several decades. Currently, 6 percent in tonnage of all U.S. imports come through the canal. An estimated 20 percent of U.S. exports pass through the waterw^ay. According to top U.S. Maritime Department officials, American trade on routes associated with the canal is expected to jump upward in the years ahead, including transportation of vital Alaskan North Slope oil, Indonesian oil, and possibly Mexican oil deliveries. The canal also plays an important, and in many respects a growing economic role for scores of other nations, including the countries of Central America and the west coast of South America, plus such superpowers as Japan. According to Howard F. Casey, deputy assistant secretary for maritime affairs of the U.S. Maritime Administration, benefits provided by the canal are so extensive that it is "difficult to quantify" the total economic value today of the complex system of locks, dams, railroad lines, and drydocks. The canal was built at an original cost of $387 million. What is certain, Mr. Casey noted in a telephone conversation, is that in the absence of such a canal, the increased costs and longer transportation times resulting to shippers and businesses would cause many U.S. and foreign markets to "face serious economic hardship." Maritime studies, says Mr. Casey, indicate "substantial" increases in shipping through the canal during the next several decades. Business wooed The Carter administration is deliberately wooing support from the U.S. busi- ness community for the recently signed Panama Canal treaties. The treaties are the culmination of negotiations that have extended on and off since 1964. They provide for gradual Panamanian takeover of the canal until the year 2000, when Panama would take complete charge. But the two treaties would also provide for perpetual neutrality of the canal, besides giving the U.S. a continuing defense role in the waterway. Among top business leaders already lined up behind the new treaties are : Max Fisher, president of United Brands Company, with extensive financial dealings in Panama ; Richard O. Anderson, chairman of Atlantic Richfield Company ; and Howard L. Clark, chairman of American Express Company. R. Heath Larry, president of the Washington-based National Association of Manufacturers, says that later this month he will recommend that the NAM go on record as supporting the treaties. Mr. Larry argues that there is clear "advantage" for the U.S. business community in having the canal remain "viable." In the "long-run," he says, that means giving the Panamanians a direct vested interest in keeping the canal open and operating efficiently. Indeed, there is mounting concern within the U.S. business community over the possibility of long-range trade disruptions and possible moves to nationalize U.S. corporate subsidiaries in some Latin American nations if the U.S. Senate were to defeat the canal treaties. Few ships too large Currently, 96 percent of all U.S. flag merchant vessels and 93 percent of the total world merchant fleet is capable of passing through the canal. Of the 7 percent of world merchant shipping unable to traverse the 51 mile waterway (completed in 1914) most were built for ocean routes deliberately bypassing the canal. (489) 490 Unknown to most North Americans, many South American nations are par- ticularly dependent on the canal. In 1974, according to U.S. maritime estimates, 73 percent of Ecuador's imports and exports transited the canal, for example, as did half of Peru's total export-import tonnage. Recent studies indicate that roughly one-third of the total tonnage going through the canal is either from or bound for the U.S. or is part of the U.S. domestic trade. Overall, petroleum products, grains, and coal and coke make up one half of all shipments by tonnage, followed by iron, steel products, ores and metals, and such commodities as nitrates, phosphates, potash, agricultural products, lumber, canned and refrigerated foods, chemicals and petrolchemicals, and machinery and equipment products. According to a 1974 Commerce Department study, "The Panama Canal in U.S. Foreign Trade," a complete closure of the canal could cost U.S. consumers billions of dollars. While President Carter has broached the possibility of the U.S. and Panama eventually building a second, sea-level canal, the Panama Canal is currently operating will below capacity. In the past years there have been between 12,000 and 13,000 transits per year by commercial seagoing vessels. New North Slope oil deliveries are expected to add another 700 or so transits year year by 1982. Yet, the canal can easily handle a minimum of 20,000 to 22,000 transits a year. In spite of operating deficits in fiscal years 1975 and 1976, the canal is expected to come close to breakeven this year. Main concerns about the long-range shipping waterway center around the huge amounts of fresh water necessary for each vessel moving through the locks — often scarce during dry spells. Also the question remains of the future toll cost structure of the canal, particularly when it comes under Panamanian jurisdiction. [From the Wall Street Journal, Monday, Aug. 22, 1977] Scare Talk and the Canal (By Roger \V, Fontaine, Director of Latin American Studies at Georgetown University's Center for Strategic and International Studies) Negotiators for tlie Carter administration have readied an "agreement in principle" with Panama on the "basic elements" of a new treaty on the Panama Canal. Although the exact language has not yet been fully drafted, the main features call for transfer of the canal and the 533-square mile Canal Zone to Panamanian control in 23 years. The military presence of the U.S. would end by the year 2000, after which we would continue to have the unilateral right to insure an open and neutral canal. This latter provision clearly implies the right to military intervention, although the Carter administration does not like to use that term. A major controversy will undoubtedly flare up over this point. But what is interesting about the proposed treaty is not its novelty but its utter familiarity to those who have had the patience to follow the negotiations over the last few years. The supporting arguments are also familiar, and they will now be echoed by most of our foreign policy establishment, including Gerald Ford and Henry Kissinger. Yet these arguments are still open to serious criticism, not, as our protreaty pamphleteers would have it, the criticism of the uninformed, the jingoistic and the merely nostalgic. Three scare arguments are especially prominent, and need especially to be reviewed. First, that the canal is vulnerable to sabotage. Second, that a full-blown guerrilla war might break out in Panama. And last, that in such an event, the United States would be condemned by all of Latin America, if not by the entire Third World. The Carter administration, facing a suspicious Senate and public opinion, will probably rely on these arguments in its campaign for ratification. Suggesting that the U.S. is being subjected to extortion by tiny Panama is accurate enough, but the truly important part of the equation is that we Americans are engaging in acts of self-extortion. We are frightening ourselves with disaster scenarios which although superficially plausible have never been thoroughly dissected. FEAR OF SABOTAGE First, the fear of sabotage. Although the canal is and always has been vulner- able, wrecking it is obviously to no one's advantage, and least of all to that of the Panamanians. Since North American capital would be required to restore opera- tions, Panama would remain as dependent as ever on the United States. Further- more, a treaty which delays full control until the year 2000 seems unlikely to stay the hand of the young and impatient saboteur. Second, guerrilla warfare. The specter of another Vietnam is an effective weapon, no doubt, in persuading a war-weary American public to surrender its rights on the isthmus. But the extent of the problem remains to be analyzed properly. The potential does exist for small urban terrorist squads, recruited from Panama's large student population, to make lightning raids into the zone. They might stage robberies, kidnappings and assaults on police or civilian function- aries in the zone as well as in Panama itself. U.S. military and police units would find it tempting to chase these raiders back into Panamanian territory, thus provoking nationalist outcries. Yet a truly serious insurgency is unlikely. Panama is not Vietnam in size or resources, nor does it have a nearby neighbor willing to aid the "liberation struggle." Furthermore, the Panamanian chief. General Omar Torrijos Herrera, is unlikely to provide the training and logistical support necessary to transform urban terror squads into full-fledged rural insurgents. Declaring war, even sub rosa war, on a superpower is still a dicey business. (491) 492 Moreover, Gen. Torrijos may well find it more in his interest to stamp out, than to encourage insurgents. The regime remains extraordinarily dependent on foreign banks and, yes, foreign tourists — none of whom would enjoy working and playing in Belfast-style surroundings. Finally, Gen. Torrijos is even less likely to enlist outside material support, even from such friends as Fidel Castro and Muammar Khadarfy. The risks are too great and these gentlemen have too many other preoccupations. The Cuban leader, moreover, knows very well that Latin American guerrillas have an extraordinary rate of failure. Their only hope would be to wear down U.S. public opinion through a sustained campaign of terror, not a wholly irrational hope, but far from the worst-case scenario of the treaty's supporters. The third major pro-treaty argument is the fear of alienating world opinion, a familiar scenario which arises whenever there is a question of using force to insure American interests. Ambassador Sol Linowitz, one of the treaty negotia- tors, has even stated that the new treaty will "prove" us magnanimous to a skeptical (third) world. Yet if this world is not convinced of U.S. benevolence after our rebuilding of post-war Europe and our billions of foreign aid dollars to scores of underdeveloped countries, one more act of charity will not convince it. This treaty might just as well reinforce the notion that America is acting, not from generosity, but from weakness. To criticize this argument is to question the notion that what others may think must control our policy. No serious man should be concerned with critical opinion of Panama emanating from Conakry or Kampala, or much less Moscow. Yet Latin America is a somewhat different case since, with the exception of Cuba, none of its countries are our sworn enemies. The depth of our ties with this region is matched only by those with Western Europe. Y'et even though no Latin American regime publicly supports the United States, the depth of pro- Panamanian feeling varies considerably from country to country. It is strongest in Venezuela, Colombia and possibly Mexico ; it is weakest in the southern cone of South America. For example, Brazilians, heavy users of the canal, have pri- vately expressed deep misgivings over Panamanian control. ONLY FIVE NATIONS Despite Gen. Torrijos's numerous meetings with regional leaders, the last one held in Bogota early this month, he has managed to get the collective support of only five other nations. Moreover, a surrender of the canal is not likely to gain us lasting respect or affection. And why should it when the obvious way to deal with us is to make more demands in as unfriendly a fashion as possible? Beyond these arguments, our reluctance to hang on to the canal reflects a sen.se of uneasiness, of guilt at maintaining what is so glibly described as a "colonial enclave." Our presence simply can't be squared with the radical anti- colonial (to wit, antiwestern) sentiment that is now the common intellectual coin of the globe. Yet it must be pointed out that Panama has benefitted mightly from a resource that it alone could not exploit. It is a fact of life that the canal is a major interna- tional'waterway that simi)ly cannot be oi)erated, much less defended, by one of the smallest countries in Christendom. That it would strike many as arrogant to state these facts is a mark of the extent to which we have absorbed the doctrine of international egalitarianism. National duty is not easily transferred nor fundamental geopolitical facts altered by i>olitical bombast. The United States must retain the major role in running and defending the canal. It is still open to question how precisely to define that role, as well as the nature and extent of Panama's contribution. What should not be open to debate is the right of this country and the other users to an open and secure passage- way between the planet's two principal oceans. In spite of the attempts to secure ratification through scare arguments, this treaty does not fit these requirements. 1 493 494 [From the Encyclopedia Britannlca 1970] Panama Canal (By Capt. Miles P. Du Val, Jr., U.S. Navy, Retired) Panama Canal, a high-level artificial interoceanic waterway of the lake and lock tyi)e at the Isthmus of Panama connecting the Atlantic and Pacific oceans, owned, operated and controlled by the I'nited States undpr treaty, for the transit of vessels of commerce and of war of all nations on terms of equality, with tolls that are just and equitable. The Canal Zone, through which it was built, is the constitutionally acquired territorial i>osKession of the United States granted in perpetuity by the Republic of l»anama for the construction of the canal and for its perpetual maintenance, operation, sanitation and protection. The gross total investment of the United States in the canal enterprise, including defense ex- penditures, from 1904 to June 30. 1968, amounted to $6,368,009,000 ; and net to over $5,000,000,000. •By using the canal, vessels plying between the Atlantic and Pacific coasits of the United States can eliminate the Cape Horn route and save a distance of about 8,000 nautical mi., while journeys between the Atlantic and Pacific coasts of the North and South American continents can be reduced by 3,000-4,000 mi. ; vessels from Europe to eastern Asia and Australia can effect a saving of 1,000-2,000 mi. Hence the canal is of the greatest international importance, strategically and economically. This article is divided into the following sections : I. The Waterway. 1. Description. 2. Na\igation. II. The Canal Zone 1. Area and Tidewaters. 2. Sovereignty. 8. Administration. 4. Tolls. 5. Canal Traffic. 6. Defense. III. History 1. Panama Railroad, 1849-55. 2. French Project, 1879-1904. United States Policy, 1850-81. 4. Isthmian Canal Commission, 1899-1901. 5. U.S. Diplomacy, 1901-03. 6. Building Canal, 11X>4-14. 7. Principal tingineering and Construction Projects After 1914. 8. Reorganization and Policy Determination. 9. Panama-U.S. Relations. I. THE WATERWAY 1. Description The Panama canal does not cross the isthmus from east to west as generally supposed, but fnmi northwest to southeast, with the Athintic entrance 3^^'/_> mi. N. and 27 mi. W. of the Pacific entrance. Led into grooves to permit passage. With the exception of small craft, vessels are not allowed to pass through locks under their own power, but are required to be drawn by towing locomotives, varying in number from four to eight, depending on .ship characteristics. The time required for passage through the locks depends upon many factors, including size of vessel and its handling features. Generally, lockage intervals are 80 min. at Gatun, 40 min. at Pedro Miguel, and (30 min. at Miraflores. Gatun Dam and Spillway. — The key structure of the Panama canal is Gatun dam, near the end of the Chagres river valley. It is about ly^ mi. long on its crest, 1/2 mi. wide at the base, 400 ft. wide at the water surface. 100 ft. wide at the top. and its crest is 105 ft. above sea-level. It contains 22,958,069 cu. yd. of material. Located on a natural hill of rock near the centre of the dam, Gatun spillway was designed to provide adequate control of Gatun lake levels during the maxi- mum known discharge of the Chagres river. The dam and spillway together with Gatun locks form the northern barrier that cceates Gatun lake. Gatun Lake and Gaillard Cut. — Gatun lake, at its normal height of 85 ft., has an area of 1()6 sq. mi. and a shore line of 1,100 mi. ; with a watershed of 1,285 sq. mi., which includes territory of the Rei)nblic of I'anama. Its designed operat- ing range is 5 ft., between water levels of 87 and 82 ft above sea level Gaillard cut, formerly called Culebra cut, is an artificial extension of Gatun lake across the continental divide to Pedro Miguel locks, with its original bottom 99-592 O - 78 - 32 496 at a maximum of 40 ft. above sea level, on an ali^niment that i)asses between Gold hill and Contractors hill. Its restricted channel and rocky banks make this cut the most hazardous part of the canal. A steady growth in vessel sizes and number carrying hazardous cargo has increased the frequency of transits requir- ing one-way navigation in Gaillard cut. Pacific Dams, Miraflorcs Lake and Spillicai/. — Across the iSOuth end of Gaillard cut, a pair of one-lift (31 ft.) PedrO Miguel locks and two flanking dams to nearby hills form the southern barrier closing the upper valley of the Rio Grande and holding the Gatun lake water level. With crests 105 ft. above sea level, the east dam extends about 300 ft. to Cerro Luisa and the west extends about 1,400 feet to Cerro Paraiso. The east dam is a concrete wall, 260 ft. long, covered with earth ; the west is earth and rock, containing 699,518 cu. yd. of material. At Miraflores, a set of two-life locks and two dams from a second barrier closing the lower valley of the Rio Grande and creating the intermediate Miraflores lake. This lake, at 54 ft. above sea level, has an area of 1.5 sq. mi. Its watershed is 38 sq. mi. The major part of the east dam at Miraflores is the spillway, designed to handle free flow of water from Gatun lake through one chamber at Pedro Miguel in event of accident. The west dam, with crest 40 ft. wide and 70 ft. above sea level extending 2,700 ft. to Cerro Cocoli, is the second largest dam of the canal, con- taining about 2,388,423 cu. yd. of material. Terminal Facilities. — The Atlantic terminus affords safe anchorages in Lim6n bay and convenient pier berths at Cristobal. The Pacific terminus has mooring buoy, dock and pier berths at Balboa ; also an unprotected outer anchorage in the Bay of Panama. All piers are modern, 1,000 ft. long by 200 ft. wide, with enclosed sheds and railroad service, ample for storage of consignments and transshipment of cargo. Both terminals are equipped for servicing of vessels, provisioning and repairs. The principal repair installations are on the Atlantic side near Mount Hope, with a 386-ft. dry dock. Larger marine and railway repair shops on the Pacific side are closed, with a 1,044 ft. dry dock in a stand-by status. Salvage tugs and other wrecking equipment are available. 2. Navigation, All vessels entering or leaving a terminal port, maneuvering in Canal Zone waters, or in transit, in general, are required to take pilots, who have charge of navigation and movement. Transits are made under rigid traflic controls. The average time required to transit is from seven to eight hours. II. THE CANAL ZONE 1. Area and Tidewaters The Canal Zone is a strip of land and land under water 10 mi. wide with boundaries generally 5 mi. from the centre of the canal except for the western salient covering the mouth of the Chagres river, the arms of Gatun lake extending into the Republic of Panama, and Madden lake. Beginning in the Caribbean, three marine miles" from mean low water as provided l>v treat v the zone ex- extends across the isthmus to a distance of "tliree marine miles" from mean low water in the Pacific, but excludes the Panamanian cities of <^ol6n and Panama iru( it Zone includes all of Gatun lake and surrounding shores up to the Madden lake and its shores up to the 260 ft. contour, ihe total area of the Canal Zone is 647.29 .s(i. mi.— 872.82 .sq mi land 185 5*^ sq nil fre.sh water and 89.45 sq. mi. salt water, including the Atlantic and'Pacific coastal waters within the three-mile limit. The tide.s at^the Atlantic and Pacific terminals differ in both magnitude and character. At C ristobal on the Atlantic side they are irregular and .small with an- oxfreme range of 8.05 ft. At Ban)oa on the Pacific .side, tliev are remarkablv reg- ular with two highs and two lows every lunar day of 24 hr. and 50 min with an extreme range of 22.7 ft. 2. Sovereignty Under the authority of the Panama Canal act of 1912 and in conformity with treaty. Pres. William II. Taft, by executive order of Dec. 5, 1912. declared that ''all land and land under water within the limits of the Canal Zone are necessary for the construction, maintenance, operation. i)rotection, and sanitation of the 497 Panama Canal." Since title to all such land was acquired by the T^nited States, the Canal Zone, in its entirety, is a United States government reservation. The only private enterprise activities permitt-^d within the zone are on lands rented under revocable licenses, normally to shipping interests, communications companies, banks, agriculturists and others directly connected with the canal or its operation. Areas assigned for other government purposes, in the mid-1960s, included 253 sq. mi. for the armed forces, with 176 to the army. 22 to the navy and 55 to the air force: 6 to the Smithsonian institution as a wildlife preserve on Barro Colorado ; 5 as the Madden Forest i>reserve : 0.96 to the Federal Aviation agency: 1 to commercial licenses and 13 to Canal Zone town sites. Remaining land, largely mountain or jungle, totals over 193 sq. mi. All areas continue sub- ject to the civil jurisdiction of the Canal Zone government in conformity with the Canal Zone code. 8. A (f mini strati 071 The Panama canal enterprise, as reorganized July 1, 1951, under public law 841, 81st congress, approved Sept. 29, 1950 (Tliompson act), consists of two main units, the Panama Canal company and the Canal Zone government, with the dom- inant mission of the safe, convenient and economic transit of vessels. The Canal Zone is divided into two districts, the Balboa (or Pacific) subdivision and the Crist6bal (or Atlantic) subdivision. Balhoa and Cristobal. — These subdivisions are coterminous with the Balboa and Cristobal divisions of the U.S. district court. Their common boundary crosses the Canal Zone at right angles just northwest of Barbacoas Island. The Balboa subdivision includes all Canal Zone area lying southeasterly of this boundary, and the Cristobal subdivision, all lying northwesterly of it. TowTis, except Gamboa, are clustered near the terminals convenient to canal and shipping activities, in which, directly or indirectly, most of the civilian population in the zone is employed. Gamboa, because it is the headquarters of dredging opera- tions, is located north of Gaillard cut to prevent isolation of equipment from lake dumi>s in event of slides. All to\\'ns have the facilities of well-managed communi- ties in the United States, with high standards of health, sanitation and education. The canal administrative centre is at Balboa Heights. A long-felt defect in the 1903 treaty was failure to provide for adequate public crossings of the canal for the Canal Zone and Panama, botli diaided by the water- way. This condition was initially corrected by the United States by a toll-free ferry at Balboa in 1932 under legislation sponsored by Rep. Maurice H. Thatcher, former member of the Isthmian Canal commission for whom it was named ; and finally, in 1962, pursuant to treaty, by the toll-free Thatcher Ferry bridge to re- place the ferries. The population of the Canal Zone in 1968, including dependents of the U.S. armed forces, was 50,405, with 14,477 in the Cristobal district and 35,928 in the Balboa district. The population of the principal communities was 3,489 for Gam- boa and 3,139 for Balboa. The Panama Canal Company. — This is a corporate in.strumentality of the United States, operated under the management of its board of directors and charged with the maintenance'and operation of the Panama canal and the conduct of business-type operations incident thereto and to the civil government of the Canal Zone. The basic law requires that the company be self-sustaining. Its obligations in- clude its own operating expenses, the net cost of civil government, interest and depreciation on United States investment in the enterprise, and $430,000 of the $1,930,000 annually paid to the Republic of Panama, the remainder being provided by the department of state, and thereby excluded in fixing tolls. The Canal Zone Go^:crnment. — This is an independent agency of the United States, administered by a governor of the Canal Zone, under the supervision of the president, or such officer of the United States as may be designated by him (secretary of the army). It performs the functions of city, county and state gov- ernments, with certain attributes of diplomatic character in connection with the Republic of Panama. The governor, who is appointed by the president and con- firmed by the senate, is ex-oflicio a director and president of the Panama Canal company. The judicial functions of the Canal Zone government are performed by two magistrate's courts, Balboa and Cristobal, each presided over by a magistrate appointed by the governor ; and by a United States district court of the fifth judi- 498 cial circuit, consisting of two divisions, JBalboa and Cristobal, presided over by one judge appointed by the president. Jt. Tolls The levy of tolls is subject to provisions of the Hay-Pauncefote treaty (1901), the Hay-Bunau-Varilla treaty (1903), and the Thomson-Urrutia treaty proclaimed in 1922. Exempted from transit tolls in accordance with treaty are vessels owned, operated or chartered by the government of the Rephblic of Panama and war vessels of the Rei)ublic of Colombia ; also vessels in transit solely for repairs at Panama canal shops. Tolls are asses.sed on the basis of Panama canal net tonnage of actual earning capacity, a net vessel ton being 100 cu.ft. of space. Tolls cover all normal transit charges, including pilot service. Vt'ssels operated by the United States, including warships and auxiliaries, are assessed tolls. Tolls in 1968 were 90 cents per net ton for merchant vessels, army and navy transports, tankers, hospital and supply ships, and yachts, when carrying passen- gers or cargo ; 72 cents per net ton on such vessels in ballast ^^^thout passengers or cargo ; and 50 cents per ton of displacement for other types. The average meas- urement per ocean-going commercial vessel in fiscal year 1968 was 7,S20 net tons and a verage tolls per vessel, $6,357. The Panama Canal company is authorized to prescribe and, from time to time, change rules for the measurement of vessels and tolLs, subject to requirements for six months notice, public hearings and approval by the president of the United States, whose action shall be final and conclusive. 5. Canal Traffic Although the Panama canal was conceived and built primarily as an artery of world trade, its trafiic, except during World War II, has had an irregular but sus- tained gro\\'th since 1961 in the number of commercial transits and cargo tonnage. Total long Total tons of Total tolls and transits > cargo i toll credits Fiscal year: 1S29 7,197 30,781,755 $27,128,893 1933 5,040 18,269,917 19,621,181 1939 7, 449 27, 993, 144 23, 699, 430 1943 4,372 11,030,105 7,368,739 1950 7,694 30,364,982 24,511,713 1955 9,811 41,523,432 35,136,529 1960 12,147 60,401,733 51,803,032 1365 12,918 78,922,931 67,148,451 1967 14,070 92,997,958 82,296,638 1968 15,911 105,538,318 93,153,649 » Exclusive of transits for repairs. Source: "Annual Reports of Board of Directors and President," Panama Canal Company. Its traffic volume is extremely sensitive to wars and depressions, and to appreciable political, economic or other upheavals in any part of the world, such as crop failures, strikes, destruction by tropical storms, development of foreign industries and closure of the Suez canal. A significant feature of Panama canal traffic is the pattern of its trade routes, of which eight are well defined. The lowest traffic volume after 1933 occurred in 1943, when there were 4,372 transits by ocean-going commercial vessels with 11,030,105 tons of cargo. A high point in traffic history occurred in fiscal year 11M)8 wlien, because of the Vietnam war and the closing of the Suez canal, new records in the number of transits, toll revenue, and tons of cargo were made. Growing numbers of commercial vessels with beams over 80 ft. were using the canal, thus emphasizing the need for increased capacity. 6. Defense The Panama Canal act of 1912 vests responsibility for protection of the Panama canal and Canal Zone in the governor, this prote<'tion being the normal exercise of police authority within the Canal Zone. Defense against external aggression is a function of the armed forces, for which the commander in chief. Southern 499 Command, is responsible. These include army, navy and air force units, located in the Canal Zone and elsewhere. The act further provides that "in time of war in which the United States shall be engaged, or when, in the opinion of the president, war is imminent," the president is authorized to vest exclusive authority and jurisdiction over the Panama canal and Canal Zone government in such officer of the army as the president may designate, with the governor subject in all respects to the orders and directions of the designated officer of the army. During war or emergency, elaborate security precuations are taken by both civil and military authorities, including careful examination of arriving vessels and use of specially trained security guards during transits. III. HISTORY The advantageous geographical location of the Central American isthmus was recognized by the early Spanish who, within a few years after the visit there by Columbus in 1502. followed with extended explorations focused on four main route areas : Tehuantepec. Nicaragua, Panama and the Dari^n-Atrato. Not finding a strait, they promptly conceived the idea of constructing one^^ Because of lower continental divides at Panama and Nicaragua, with pene- tration by large valleys, these two avenues became rivals for isthmian transit. At Panama, mountainous terrain and torrential rivers, notably the Chagres, at the time presented insuperable barriers to a canal. Lake Nicaragua, 3,089 sq. mi. in area, with its then navigable San Juan river flowing into the Atlantic, reduced the magnitude of the task to cutting across the narrow strip which separated the lake from the Pacific. Eventually, control of the Nicaragua route became a focal point of international conflict with Great Britain and the United States in a diplomatic deadlock. This situation was prolonged by the Clayton-Bulwer treaty (1850) which deprived the Unjted States of exclusive control over any isthmian canal that it miglit construct. 1. Panama Railroad, 18^9-55 When United States westward expansion in the late 1840s required better means for transit, three North Americans of vision, John Lloyd Stephens. Wil- liam Henry Aspinwall, and Henry Chauncey, organized the Panama Railroad company. Chartered in 1849 by the state of New York, this company, under enor- mous difficulties, completed building the Panama railroad in 1855 — the first transcontinental railroad of the Americas. Running from Aspinwall (Col6n) close to the line of the future canal, this 47.5-mi. strategic rail link was the first concrete step toward construction of the Panama canal, giving it a tremendous advantage over Nicaragua in the choice of route. In view of the key functions that this celebrated railroad was later to fill in Panama canal history, it is important to note a treaty of 1846 between the United States and New Granada (Colombia). This treaty was an offensive and defensive alliance aimed primarily toward securing a canal at Panajna, even then recog- nized by Pres. James K. Polk as the most practicable route. It provided that the United States should guarantee the "perfect neutrality" of the isthmus and its free and uninterrupted transit. 2. French Project, ISIO-IBOj^ Meanwhile, French interests under the dynamic leadership of Ferdinand de Lesseps (q.v.), hero of the Suez canal, decided to construct a canal across the American isthmus. An International Congress for Consideration of an Inter- oceanic Canal, consisting of 135 delegates, convened at Paris on May 15, 1879. to decide upon site arid type. As president of the congress. De Lesseps appliecl his prestige and genius toward securing approval for a sea-level of canal at Panama. Adolphe Godin De I^epinay de Brusly, an engineer who had studied the Ameri- can isthmus, protested strongly at this trend. He understood the topography at Nicaragua and how its large natural lake, 105.5 feet high, would contribute toward construction of a canal at that location. He knew the surface features at Panama — the continental divide about 10 mi. from tlie Pacific, the torrential Chagres river fiowing into the Atlantic, and the smaller Rio Grande into the Pacific, both through valleys suitable for the fonnation of lakes. He emphasized the key problems at Panama as the control of the Chagres river and excavation of Culebra cut, recognized the lake idea as offering the best solution, and proposeest type of canal at the best site, and at least expense, the reports of these expeditions were reviewed by the first United States Interoceanic Canal commission 1872-76. consisting of Brig. Gen. Andrew A. Humphries, chief of U.S. army engineers ; C. P. Patterson. U.S. Coast survey ; and Commodore Daniel Ammen. chief of the bureau of navigation of the navy. Reporting to President Grant on Feb. 7, 1976, the commission was unanimous in recommending a Nicaragua canal starting on the Atlantic side near Greytown, following the San Juan river to Lake Nicaragua, through the lake, and thence across the land to Brito. Thus, the United States liecame definitely committed to the Nicaragua route, then complicated by British control of its eastern ter- minus through their protectorate over the Mosqiiito kingdom. Vie\^ing an isthmian canal as "virtually a part of the coastline of the United States" and alarmed by the energetic measures taken by French interests at Panama. United States leaders determined to change American policy. This atti- tude found expression of March 8, 1880. when tlie Select Committee on Inter- oceanic Canal of the house of representatives recommended a revjolution by the congress declaring that any form of protectorate on this continent was contrary to the Monroe Doctrine (^.r.), that the United States asserts and maintains its right to pos.sess and control any artificial means of isthmian transit, and that the president be recpiested to take steps to abrogate the Clayton-Bulwer treaty. This objective was .supported by former President Grant, who, in Feb. 1881 pub- licly commended "an American canal, on American soil, to the American people." 4. Isthmian Catinl Commission, 1899-1901 The Frencli failure in 1889 rendered the canal .<;ituation less acute, requiring a new crisis to dramatize the issue. This was supplied by the historic voyage of the U.S.S. "Oregon"' during the Spanish-American War in 1898. which emphasize.0(X). But as the P>en'ch company was demanding .$109,141 ..KX) for its property, the total estimate for Panama was .$2r).S..S7-I.S.">s. Because of the excess cost for a canal at Panama, it recommended Nicaragua as the only practicable route. 5. U.S. Diplomacy. 1901-03 Meanwhile, the T'nited States government, under the leadership of Secretary of 501 state John Hay, negotiatcKl with Great Britain ilie Hay-Panncefote treaty of Nov. 18. 1901. which snperseded tlie Clayton-Biihver treaty and reeojjnized the exohisive ri^iit of tlie I'nited States to construct, rej^nhite and mana^fe any Isthmian canal. It further adopted the principal points in the Convention of Con- stantinople (1888) for the Snez canal as rules for the operation and neutraliza- tion of the American canal. The.se mles provided that the canal shonhl he free ami open to vessels of commerce and of war of all nations on term.s of entire equality, with tolls that were just and e. 1902, cahled Admiral Walker its readiness to accept the Uniteeration and protection of the Panama canal and railroad, and then, through the Isthmian canal commission, to construct the Panama canal. The type contemplated by the act was high-level, with Atlantic locks and dams at Bohio to form a Tvake Bohio. Provision was also made that in event of failure to obtain an adequate treaty within a rea.sonable time, the president should proceed with construction of a Nicaragua canal. In harmony with the act, Tom.^s HerrAn, Colombian charge d'affaires in Wash- ington, after many months of arduous labour, succeeded in negotiating a most favouralde treaty for his country — the Hay-Herran treaty of Jan. 22. 1903, which was ratified by the United States senate on March 17. 1903. Unfortunately, this treaty became involved politically in Bogota. The Co- lombian senate, called into special session on June 20, 1903. for its ratification, rejected the tmity against urgent pleadings by Herran in Washington and U.S. Minister Arthur M. Beaupr^ in Bogota. The Panama Revolution, 1903. — Panamanian leadens, fearing that after all Panama might still lo.se the canal to Nicaragua, determineellion and independence was proclaimed under the leadership of Manuel Amador. It was recognized, first by the Uniteil States, .second by France, and soon afterv/ard by other countries. Then followed negotiation of the .second basic canal convention, the Hay- Bunau-Varilla treaty of Nov. 18, 1903, with Panama instead of Colombia. By this treaty, in harmony wit-li the Spooner act, Unittni States was granted in jierpetnity exclusive u.se, occupation and control of the Canal Zone. Significantly the United States could exercise all sovereign powers to the entire exclu.sion of the exerci.se of such ix)wers by Panama. That country was to receive $10.000,0(X) in ca.sh and a $250,000 annuity to begin nine years after ratification of the agreement. The proclamation of this treaty on Feb. 26, 1904, sealed the choice of the Panama route. A few days later, on March 8. 1904. President Roo.sevelt recognized the contri- butions of Admiral Walker by appointing him as the first chairman of the first Isthmian Canal commission for the construction of the Panama canal. One mem- ber, Maj. Gen. George W. Davis. I'.S. Army (ret.), was the first governor of the Canal Zone. John F. Wallace, a leading railroad engineer, not experienced in "frontier" work, was chosen as the first chief engineer. The Canal Zone was formally acquired on May 4, 1904 — a day subsequently celebrated annually in the zone as Acquisition day. 6. Building the Canal, 190Jf-14 Work under the United States started haltingly. Because of public clamor to "make the dirt fly." the commission weakened in its stand for thorough and 502 comprehensive preparation and started work without proper equipment or plans. Though valuable time was thus lost, the commission made imi>ortant contribu- tions. It organized the Canal Zone government, started sanitation under the .supervision of- "William Crawford Oorgas (q.r.), and recruited the nucleus of an engineering and construction force. Resigning on March 30. 1005, the Walker commis^^ibn was succeeeriod the gravest was increasing uncertainty as to the type of canal that .should be built — the high-level lock type contemplated bv the Spooner act or a canal at sea level as had been suggested by Wallace in 1904. Fortunately, President Roosevelt selected a great railroad builder, executive and explorer, John F. Stevens, as the new chiet engineer. iScevens' qualitications were unique. He had read everything available on the Panama canal since the time of Philip 11, discovered Marias pass in Montana, built railroads in the Rocky mountains and supervised open mining operations in Minnesota. Thus, he had observed what occurs when the delicate balances oi nature are upset, under- stood the hazards of cutting a ship channel through mountains, and was experi- enced in personnel and construction problems in undeveloped' terrain. Arriving on the isthmus on July 25, 1905, at a time of chaos, he rescued the project from possible disaster. He promptly provided housing for employees, established commissaries, adopted sanitation measures, ordered equipment and double-tracked the Panama railroad. After planning the transportation system for Gulebra cut excavation and for relocation of the railroad to higher ground on the east side of the canal, moving the Atlantic locks site from Bohio to Gatun to form Gatun lake, recruiting competent leaders and forming the organization for building the Panama canal, he found progress hampered because of delay on the decision as to type of canal, then being considered by an International Board of Consulting Engineers, of which General Davis was chairman. In its report of Jan. 10, 1906, this board split — the majority of eight members headed by General Davis and including tive Europeans, voting for sea level; and the minority, five Americans (Alfred Noble, Henry L. Abbot, Frederic P. Stearn.s, Joseph Ripley and Isham Randolph), voting for the lock type. The controlling features of the lock plan recommended by the minority were a dam at Gatun creating Gatun lake 85 ft. high as the summit level and Culebra cut. Parallel flight locks were to be provided : three-lifts at Gatun, one-lift at Pedro Miguel, and two-lifts at Sosa hill, the last two sets being separated by an intermediate Sosa lake. Though of different lock arrangement, this plan was the same type as recommended in 1901 by the Walker commission. Testifying before congressional committees in Washington in January and June 1906, and using the De Iv^pinay arguments of 1879, Stevens supported the high-level plan with a conviction that no one could shake, and strongly opposed the sea-level plan recommended by the majority of the International Board of Con.sulting Engineers. In the end, with the support of President Roosevelt, Sec- retary of War Taft, and the Isthmian Canal commission, the views of Stevens prevailed against strenuous opposition concerned primarily with questions of "vulnerability." Congress, by act approved June 29, 1906, adopted the high-level lake and lock plan as proposed by the minority. This was the great decision in building the Panama canal. The transit since 1914, in both peace and war, of thousands of vessels of various types, completely establishes the wisdom of that decision. It secured for Stevens, who was mainly re.sponsible for bringing it about, great fame as the basic archi- tect of the l*anama canal. This fact was recognized in Oct. 1962 at the time of the opening of the Thatcher Ferry bridge by the dedication of a handsome memorial honoring the great engineer. Pacific Lock Local ion Question, 1906-08. — Though the high-level plan, as ap- proved by the minority of the International Board of Consulting Engineers, place3-90 (1879) ; Miles P. DuVal, Jr., Cadiz to Cathay, 3rd ed. (1968), And the Mountains Will Move (1947) ; Almon R. Wright. "Defense Sites Negotiations Between the United States and Panama, 1936-1948," U.S. Department of State Bulletin, Aug. 11, 1952, p. 212; Maj. Gen. George W. Goethals et al, The Panama Canal: an Engineering Treatise. 2 vol. (1915) ; Maj. Gen. William C. Gorgas, Sanitation in Panama (1916) ; AVilliam I. Sibert and John F. Stevens, The Constrnetion of the Panama Canal (1915) : D. C. Miner, The Fight for the Panama Route: the Story of the Spooner Act and the Hay-Herrdn Treaty (1940). — (M. DuV. ; A. R. W. ) 99-592 O - 78 - 33 508 Submitted for the Record ry the Panamanian Committee for Human Rights This first Volume of the Panamanian Committee for Human Rights was written and translated in Panama under extreme duress and unnatural condi- tions, due to the severe repression of the dictatorial Regime of Omar Torrijos. For this reason, the translation is not of the best grammatical quality. Volume II, which will continue the Chapter on Corruption of the Regime, and update constant and incredible Human Rights violations, is in the making. The names of the authors have been withheld for obvious reasons. Identifica- tion would mean immediate loss of life at the hands of G-2 State Security Torture Squads. The patriots from all sectors of the population now risking their lives for the cause of Liberty in Panama, thank the reader in advance for his or her effort in spreading the news of the Panamanian reality, so that the world will know the truth of their anguish. communism in PANAMA 3.1 Cuba's Influence Since the onset of the Socialist Republic of Cuba, that country has steadily been infiltrating the weakest Latin American countries, both politically and mili- tarily. First, objective is the Central American countries and then the Caribbean ones. To date, Cuba has very successfully infiltrated the Panamanian Dictator- ship. In Panama, under Omar Torrijos' Military Dictatorship, Fidel Castro's gains are dramatic. He has there the unquestioned backing of the People's Party — Panamanian Communist Party — which since 1969 openly backs Dictator Torrijos' Regime. At this time, Fidel Castro has agents occupying key positions as : the Agrarian Communes, organized by Torrijos' Regime and controlled by the Panamanian Communist Party ; the Tomas Herrera Military Institute, where the Guardia Nacional's new military men are formed. Said Institute's adviser is a cuban Militia man ; the sugar mills, built by Torrijos' Regime, are run by cuban technicians sent by Castro since 1973. On Oct. 11, 1973 Dictator Torrijos passed a law creating the Digedecom, which is a government agency run jointly by Castroites and members of the Panamanian Communist Party, founded mainly for the creation of "Juntas Comunales", which exercise total control of the communities. The 505 Juntas Comunales are tantamount to the "Comisarios del Pueblo" (Town Commisaries) found in Cuba and other Com- munist countries ; the State's Radio Station, "Radio Libertad ', is closely man- aged by members of Latin Press — the Cuban Regime's Press OflSce — with their home base in Panama. Prior to the re-establishment of relations with Cuba's Socialist Republic, Latin Press' offices were the headquarters for the Panama- nian Marxist Party. From these offices all trips of Panamanians to Cuba were arranged from 1971 till 1975. It was also the epicenter for all of Cuba's Interna- tional infiltration in Central American and Caribbean nations. The Caribbean "push' has proved extremely successful. The Panamanian National Guard's repressive G-2 department works under the close supervision of Cuba's Regime, in the persons of Pineiro, alias Red Beard and Universe Saenz. Before relations between the two countries were re-estab- lished, one of the first Panamanian Regime's officials to travel to Cuba was Manuel Antonio Noriega, feared Head of the G-2 of Panama. Since 1970, all of the members of said G-2 Department have openly traveled to Cuba for training and orieritation in "Political Security". At first these trips were made on planes belonging to the Panamanian Air Force, but afterwards they were followed by delegations of athletes, students from the Panama University, Union Leaders, and Communal Junta leaders. The G-2 controlled the list of invited "guests", in collaboration with the Latin Press offices in Panama. 3.2 Cuha'H Embassy in Panama The number of diplomatic employees in this Embassy surpasses that of any of the other Embassies accredited in Panama. There are 225 employees, some of whom give advice to Dictator Torrijos. From that I]mbassy, North American g()(Kls are bought for shipment to Cuba, through a Company called Transit, S.A., owned by Rodrigo Gonzalez, right-hand man of Dictator Torrijos. Through this concern, located in the Colon Free Zone, Republic of Panama, articles manufac- tured in Cuba are introduced in l*anania. Furthermore, this same company ex- ports to Cuba eciuipment and goods which Cubans cannot buy outside their country. These operations are carried out jointly by Transit, S.A. and the Cuban Embassy in I*anama. On the other hand, Cuban agents in Panama receive their 509 orders from Cuba through the Cuban Embassy ; these orders arrive via the Cuba airline, Compania Cubana de Aviacion. which tlys regularly to Panama. This Embassy is also of great benefit for the Panamanian Communist Party, which sends its members to Cuba for "training" and "political indoctrination" courses. Frequently groups of students, workers, and farmers travel to Cuba on cultural interchange missions. 3.3 The Panamanian Communist Party Up to October 1968, the Panamanian Communist Party, known as the "People's Party,'' was militant only in Panama City. Consequently, its influence over the Panamanian people was very limited. According to Luis Guagnini,^ Agrentinian leftist newspaperman : "The People's Party political influence in September 1974 was considered increased. From 5 Labor Unions in 1968 it now controlled 38. From the 40,000 high school students belonging to the Student Federation of Panama (FEP) — under the direction of the People's Party — in 1968, it now boasted 110,000 students and the FEP enlarged its organization and its situa- tion." The expansion of the Panamanian Communist Party takes place shortly after the Military Coup of October 1968, when the constitutionally elected gov- ernment was overthrown, after only 11 days of office. On the 11th of October of 1968, the Panamanian Military men took over the reigns of Government, in a Coup headed by Colonel Borie Martinez. He had no known political ties. At that time then Colonel Omar Torrijos, tried to promote a meeting between his Chief, Colonel Martinez, and the leaders of the Panamanian Communist Party, but he was turned down by Colonel Martinez. On February 1969, Torrijos succeeds in making Colonel Martinez and his followers prisoners, and expatriates them to Miami, Florida. Torrijos then asumes charge of the military dictatorship. In March 1969, a political pact is signed between Torrijos and the Panamanian Communist Party. Not long after, the communists control key positions in the government. Torrijos, with the guidance of the Communist Party, crushes all opposition to his regime and takes up the issue of the New Treaty as his political platform. The Communist Party then publishes and distributes among its mem- mers "La Linea de Marzo de 1969" (The Guideline of March 1969), wherein the arrangement between Dictator Torrijos and the Party is explained. Years later, another Document is prepared and called "Revision de la Linea de Marzo de 1969" (The Guideline of March 1969 Revised), in which the Party's priorities are established, and which according to Guagnini - were as follows : "1. Main Objective : the recuperation of the Panama Canal ; "2. Pursues a growth of the social area of production ; "3. Endeavors that the Communal Juntas (mechanism of local power) founded by the revolutionary legislation of October 1973, work effectively ; "4. Contends that Panama should establish relations with all of the countries in the world, which to put it simply means that it should establish them with the socialist countries, in particular with Cuba, which is the closest to Panama ; "5. Endorses a change in education and thus supports the Educational Reform proposed by the regime of Panama ; "6. Affirms that the capitalist growth seen in Panama creates contradictions which won't be solved unless the country's anti-colonial dispute is won or until there is a modification of the relationship of the internal powers ; "7. It considers it impossible to avoid having the National Guard playing an im- portant part in all political moves. "Undoubtedly, the Panamanian Communist Party has made evident gains in the above mentioned instances." With regard to # 1, and thanks to the Agreement with the Panamanian Com- munists, Dictator Torrijos has the full support of the Marxist Organizations of Latin America and as of late from Africa and Asia, gaining thus the image of the "Leader of Panama" even though he has to resort to Expatriations, Illegal imprisonment of citizens, torture of political prisoners, press censorship, assas- sinations, in short, all of the devices used by repressive dictatorships, in order to stay in power. The Panama Canal Treaty Issue seems to worry the Third World and Non-aligned countries more than it worries the Panamanians, who, although wanting a new Treaty that will erase the problems establislied in the Robles-Johnson Agreement of 1965, does not want this Treaty negotiated with the Torrijos Dictatorship, because then, as all Panamanians know, we would then lose not only the Canal, but our Country as well, for both would be served to the sphere of Russian Imperialism. 1 Guagnini, Luis "Modelo Pananieno", article in the Third World Magazine, year 1. #4, 1975, Buenos Aires, Argentina. 2 Ibid. 510 \\ ith respect to #2, dealing with the growth of the '"social area of the produc- tion it favors the Panamanian Communist Party. Panama had attained sus- tained economic growth for 10 years. Since 1973. and following the analysis of said Party. Panama has had continuous economic deterioration, brought on by the lack of trust of the private Panajiianian investors in the future of the countrv due to the obvious hostility shown by the dictatorship towards Private Enterprise Dictator Torrijos has systematically created laws that have thrown a great number of private concerns into bankruptcy, leaving them in the hands of the lal)orers. thus producing the "social area" of production. On the other hand the expropriation of land, adequately run by its owners, is a common procedure, to turn it over into *'Anentamientos Campesinos" (Rural Settlements) which are subsidized by the Regime, being the rural marxist political organizations. When the land cannot be expropriated, as in the case of urban properties, then it is forcibly taken over, as happened with the land belonging to Jose Ruiz who in May 1975 found the National Guard had occupied his land, and all his heavy equipment had been confiscated. This land was needed by the National Guard to build military barracks. It is now called "La Tinajita" (The little earthen iar). Dictator Torrijos' Regime has built tive sugar refineries which are government owned. In the recent Agreement between the Chiriqui Land Company. The Ameri- can Company devoted to the growth and trading of bananas, in the Province of Bocas del Toro, and the Torrijos Dictatorship, the former will be forced to "sell" its assets to the Panamanian Regime. This company was subjected to continuous harassment by the Dictatorship, at first with a new Tax Law. This is only another of the means used to promote the creation of the "social area" of the production, so emphatically pursued by the l»anamanian Marxists and Torrijos, systematically disencouraging private investment, to the point where, soon enough, all of the Panamanian Economy will be penetrates! and will be "social area" and thus, the Panamanian Communist Party will be able to modify the "relationship of the internal powers". Point # 3 has enabled the Panamanian Communist Party to extend its in- fluence to all areas of the country, through the creation of an extensive network of "Communal Committees" which are controlled by members of said Party. Thanks to Dictator Torrijos, the Communist Party has members in all the rural communities of Panama, and these members have access to the monies of these communities, which allows them to promote their marxist indoctrination. The Rural Settlements are in turn controlled by a government-organization created by Torrijos, which is integrated by members of the Communist Party. This orga- nization is called "Digedecom", which is also the organization that advised Tor- rijos to throw the Peace Corp members out of the country in 1972, with the excuse that they were members of the CIA. With regard to # 4, the establish- ment of relations of Panama with all of the countries in the world, the Pana- manian Communists have another victory here. When visiting Cuba in January 1976, Torrijos declared that the "Panamanian Revolution pursued the same objec- tives as the Cuban Revolution did but through other methods". Torrijos also acknowledged that he often asked and received advice from Fidel Castro and that thanks to this he had not incurred in serious mistakes. More recently, in August 1976, and from Moscow, the American Agency IJPI, releases an article whereby the INIinister of Foreign Affairs. Aquilino Boyd, acknowledges to the Russian News Agency TASS that the Russians stand with respect to the problems between Panama and the United States because of the Canal is of the utmost importance, and Panama considers Moscow "a great friend". The Pana- manian Communist Party has traditionally followed the Russian Line. To conclude, point # 7, whereby the Communist l*arty acknowledges that the true political power resides in the Military Posts in I'anama. This has committed the Party to infiltrate the National Guard in Panama. Recently, one of the Party's members in the Institution, Major Roberto Diaz Herrera, cousin of Dictator Torrijos, was promoted to Lt. Col., without losing the position he formerly oc- cupied as Major, which was that of Executive Secretary of the National Guard of Panama. The National Guard at the moment has fields sown with rice and sorghum in the country's central provinces, with the intention of substituting the private producers. This iK)sition has been denounced by the agricultural producers of the Ctiiriqui I'rovince. On the other hand, Dictator Torrijos recently created the "Tomas Herrera Military Institute" with Cuban instructors. In this way, in a few years, the control of the National Guard will be in the hands of the Communists, for they are systematically indoctrinating the young officers who will in time replace the retired officers and Colonels. Torrijos is also naming 511 non-communist Lt. Colonels to civil positions, thus removing them from active (hity in the National Guard. Such has been the fate of Colonels Arauz and I*a redes. The Communist infiltration in Education is centered in the "Educational Re- form", under the direction of Party ideologists. This program has been economi- cally feasible thanks to the donation of $11 million that the AID gave the Keginie of Dictator Torrijos to promote said Reform ! With this money, the Panamanian Marxists have the necessary means to infiltrate Panamanian edu- cation. In the Chiriqui Province, in January 1976, in a Public Meeting, the presence of marxist texts in the High Schools' required material was denounced. These texts had been sent by the Ministry of Education through the good offices of the Educational Reform Center. Monsignor Nunez, a Catholic priest, attested at this meeting that although he had been named to the Commission created to study the Educational Reform Program, he had only been summoned once. Furthermore, he was astounded when he saw a completed plan of action of said Reform, in which he was named as co-author. The monies given by the AID to the University of Panama have also ended in the hands of the members of the Communist Party who control the University ; it is being used to furnish the University Bookstore, stacked with marxist texts. IV Marxist Control of the Panamanian Regime Since the beginning of the Dictatorship in 1968, the Communists have had a very strong influence over Torrijos' Regime. In March 1969, the Political Euro of the Panamanian Communist Party, held a secret meeting in Bogota, Colombia. At that time, the Party decided to collabo- rate openly with the Panamanian Dictatorship. The Party's official publications started defending Torrijos' "revolutionary process", and more communists were appointed in key positions in the Regime. Fidel Castro, who had made acid comments against the Torrijos Regime, changed suddenly and started defending and supporting the "Panamanian Revolution". Following is an incomplete but significant list of some of the Communist personalities in the Torrijos Regime. OMAR TORRIJOS HERRERA A member of the Partisan Marxist Organization "Young Veraguas" of the Normal School of the Province of Veraguas. The early sympathies of Torrijos for the Communist Party have been con- firmed with the existence of a photograph ^ in which young Torrijos appears, 14 years old at that time, bearing the Communist flag with the hammer and the sickle, during a public manifestation while a member of that Organization. His closest relatives and advisers, the Torrijos-Herrera, Diaz-Herrera, and Vernaza- Herrera families, are prominent marxists. During the "Cerro Tute" uprising in 1959, the marxist guerrillas denounced Omar Torrijos, who was forced to fight against them as a captain in the Na- tional Guard, as a "traitor to the cause". From 1960 to 1963, while he was the Chief of the Colon Military Post, he maintained continuous meetings with marxist agents of that Province, while, at the same time, instituting an "anti-communist" fund with moneys provided by private enterprise. (This same corrupt technique is again used by Torrijos later in the Province of Chiriqui). During the 1962 "Peking-Moscow Discord" among communists, Omar Torrijos sided with the Moscow faction, and publicly exposed a Peking-oriented Marxist as a collaborator to the National Guard. In 1963, two of Torrijos' first cousins, Edison and Nitido Diaz Herrera arrive in Panama after lengthy training at Pinar del Rio, Cuba. Omar Torrijos Herrera, as Chief of the Military Post in David, Province of Chiriqui, allows the Diaz- Herrera brothers to set up their communist operations quarters in said Military Post. During this time, the Pro-Moscow communist forces led by the Diaz- Herrera brothers increased in strength considerably in that Province. Thus the banana plantations of Chiriqui became the Panamanian Communist Party's most efficient stronghold. 3 This photograph may still exist in one of the Files that the American Intelligence Agen- cies have on Torrijos. 512 lu 1966, Omar Torrijos succeeds in preventing the dishonorable discharge of another cousin of his, Lt. Roberto Diaz Herrera, for being an accomplice in communist activities carried out in the banana plantation areas under his jurisdiction. In 1966, Torrijos' sister, Toya de Jaen, is arrested at the Tocumen Inter- national Airport for carrying a large amount of marxist propaganda she was bringing in from Mexico. Omar Torrijos obtains her freedom without the con- fiscation of said material, Omar Torrijos has always been closely associated with his brother, Moises Torrijos Herrera. This brother openly belongs to the Panamanian Communist Party. In 1968, when a schoolteacher's Hotel in Puerto Armuelles is searched, a love letter to her from Moises Torrijos Herrera is found, in which he narrates the hard times which they had gone through for the promotion of the Communist Movement in Panama. A photocopy of this letter was handed to, among others, Manuel Antonio Noriega, who commented on it while under the influence of alcohol at a private reunion. All of this communist background of Omar Torrijos Herrera has been clearly reflected in the years of his dictatorship in Panama, as has been proven in the last chapter. GEBARDO GONZALEZ VERNAZA Vice-President of the Republic, also related to Omar Torrijos Herrera. He was the former Minister of Agrarian Development. Has always been an active member of the Panamanian Communist Party. Former Treasurer and conveyor of the Panamanian Communist Party. In his youth, he belonged to the "Young Veraguas". He is now considered one of the Party's most important Executives in the government's hierarchy, responsible to Omar Torrijos for all the government's political policy implementation. Runs all the "day to day" work of the Pana- manian Presidency. RORERTO DIAZ HERRERA A first cousin of General Torrijos. He was recently promoted to Lt. Col. in the Panamanian National Guard, even though he did not fill the seniority require- ments of the military for said promotion. He has been a card-carrying member of the Marxist Party since his Teen years. He acts as Executive Secretary of the National Guard, having been in this position since he was a Major. This is the same man Torrijos successfully kept from being demoted for being a Marxist while he was a Lt. in the city of Puerto Armuelles. From this position as Executive Secretary, he has effective control of all mili- tary orders and of the middle ranks, that is. Majors, Captains, Lts., an 2nd Lts. His influence reaches the lower ranks too. He publicly boasts of his Marxist affiliation, just as he used to do when he was a Lt. His brothers are : Efebo Diaz Herrera, Panama's Ambassador to Cuba ; Nitido Diaz Herrera, Chief of Customs in the Republic of Panama ; Edison Diaz Her- rera,* Municipal Treasurer. MANUEL ANTONIO NORIEGA Lt. Col. in the Panamanian National Guard. As the Head of G-2 (the State's Security torture squads), this man is actively involved in Fidel Castro's in- filtration in Panama as it appears in the pertaining Chapter. His marxist back- ground goes back to the days when he was a leader of the "Juventudes Socialistas" (Socialist Youth) while a student at the Instituto Nacional in Panama. His brother, a lawyer, Luis Carlos Noriega, was another leader of that association. He now is the President of the Electoral Tribunal of Panama. They both belong to the Panamanian Communist Party. M.VRCELINO JAEN Lawyer. Married to Torrijos' sister, Toya Torrijos Herrera. He belongs to the Central Committee of the Comnumist Party. He has been a member of the Party for a very long time. He always acted underground, since he covered the Central Provinces of the country, with headquarters in the city of Penonome, and these were not politicized. He is now the President of the National Legisla- tive ( ommis sion, which is the Communist-controlled Law making committee. nntiJl^/^"^^" V\^T^^^^^}^ were trained at the Pinar del Rio. Cuba, tralnlne center under General Bayo's (the Red General) command, during the 1960s. ^tmiuu;, tenier, 513 MOISES TORRIJOS HERREBA Ambassador of Panama in Spain. He has been a Marxist since his youth. He belongs to the Party's Central Committee. He is connected with the international drug traffic. (Please refer to the article dedicated to Corruption.) His brother, Omar Torrijos Herrera, is greatly influenced by him. RUBEN DARIO HERRERA Economist. Member of the Panamanian Communist Party (People's Party). One of the Party's most influential ideologists. He very discreetly acts as a mem- ber of the Legislative Committee, and is held responsible fol- the Party's economic policies. BALBINO MORENO He was Torrijos' school chum while at the Santiago Normal School in the Republic of I»anama. He belongs to the "Joven Veraguas" marxist organization already mentioned in the Torrijos Chapter. During the first years of the Dictator- ship, he performed the duties of General Comptroller of the Republic. At the present time he is the Director of the Central Supplies Commission, an official department with no clear cut functions. ELIGIO SALAS From his start in politico he belonged to the Communist Party. He became an activist in the "Frente de Reforma Universitaria". A man of few but ardent ideas. He has been a' member of the Legislative Committee. He was also the man in charge of the Student Affairs Department of the University, from where he controlled the pro-Moscow student organizations. Was recently named Dean of the Panama University under soviet-communist control. ROLANDO MURGAS Associated with the Panama Communist Party (People's Party). Murgas was a firebrand student leader for the Party, as a member of the "Frente de Reforma Universitaria". He is a brilliant but dogmatic one track minded ideologist for the Party's Political Committee. He was the author of Panama's new Labor Code, which is considered one of the most important factors in Panama's economic paralysis. Murgas was later named Minister of Labor, in order to implement the Party's plan of disarticulation of the Private Sector and Government take-over of many important industries. Now a member of the Communist-controlled Legis- tive Committee. ADOLFO AHUMADA Since his high school days, and later as a law student, he was a marxist agitator for the Party. A formal member of the Communist Party, he is con- sidered an ideologist with great practical political sense. He is very much respected by the Marxist Youth groups. He is extraordinarily sly and for this reason is extremely dangerous. He is a member of the Legislative Committee and participates informally in the Panama Canal Treaty negotiations representing the Party. A personal advisor to General Torrijos. He also occupies the post of Minister of Labor, an important Communist-dominated post. RENATO PEREIRA Is a member of the Communist Party. He was the Director of the Student Affairs Department, where he gave pro-Moscow Marxist groups full support. Now Mayor of Puerto Armuelles, a port city on the Pacific side of the Isthmus, in the heart of the banana plantation area, fully controlled by the Communists. Admiral Thomas H. Moorer, USN (Ret.), Chairman of the Joint Chiefs of Staff 1970-1974, before the Subcommittee on the Separation of Powers, Com- mittee on Judiciary, U.S. Senate, 22 July 1977 stated, "As chairman of the Joint Chiefs of Staff I became even more sensitive to the strategic value of this U.S. Canal as a means of protecting the security of the United States," and , . that if the Soviet Union ever gained even proxy sovereignty and control over the 514 U.S. Canal through Cuba, U.S. security as well as U.S. prosperity would be placed in serious jeopardy." He also stated, "Surrender of U.S. sovereignty over the Canal Zone would inevitably lead to the transformation of the entire friendly character of the Caribbean and the Gulf of Mexico. Everything would depend on the attitude of those who held sovereignty and ownership." Brigadier General I. P. Graham, Organization of the Joint Chiefs of Staff, stated before the House Committee on Merchant Marine and Fisheries, Panama Canal Subc-ommittee on 26 July 1977 that . . the canal's strategic value is not expected to change substantially so long as it provides the sole means of transit- ing ships across the American continent." The Panama Canal is and will remain an important asset, the use of which is important to achievement of U.S. Military objectives." Four former Chiefs of Naval Operations signed a letter June 15, 1977 to Presi- dent Carter in which they stated, "The Panama Canal represents a vital portion of our U.S. naval and maritime assets, all of which are absolutely essential for free world security. It is our considered individual and combined judgment that you should instruct our negotiators to retain full sovereign control for the United States over the Panama Canal and its protective frame, the U.S. Canal Zone as provided in the existing treaty." The letter was signed by Robert B. Carney, George Anderson, Arleigh A. Burke and Thomas H. Moorer. These are men with first hand experience in war and peace whose opinions are not extracted from the writings of academicians. As far as President Carter's mention of a new sea level canal, it would be well to read the prepared Statement of I^eonard J. Kujawa of Arthur Anderson & Co. given to the House Subcommittee on Panama Canal of the Committee on Mer- chant Marine and Fisheries on July 25, 1977. Inasmuch as Mr. Kujawa's work has included consultant for the Atlantic-Pacific Interoceanic Canal Study Com- mission, which studied the feasibility of a replacement for the existing Panama Canal, he is a credible witness. "I understand that the recent estimates for a sea level canal at Route 10 in Panama, on the basis of present price levels, indicate a cost of some $5-$6 billion. Estimates for expansion of the existing Canal by the addition of a third set of locks are $2.6 billion. The interest cost at 7% for $5-$6 billion would be $350-$420 million. The interest cost on $2.6 billion would be $182 million annually. To place these costs in perspective, fiscal year 1976 tolls reve- nues were $134 million." During the recent July, 1977 Soviet economic mission to Panama, a discussion took place on July 16 in which the Soviets said they would consider the possible financing and constructing of a new sea-level canal for Panama. It appears that the United States would be forced to enter into a costly venture which is eco- nomically ill-advised or the Soviet Union would step into the void with disastrous consequences for the United States. Canal Zone Non-Profit Public Information Corp., Washington, D.C., August 20, 1977. Mr. Bernard Diederich, Time Magazine, Rcforma 195, Mexico 5, D.F. Dear Mr. Diederich : I read with extreme interest the August 22 issue of Time in which you and Jerry Hannifin reported on the Panama Canal issue. It was very well done and all in all it held the interest of its readers. As you know from our previous correspondence, my grandfather-in-law was the founder of the Republic of Panama and it is a country that I have lived in and know well ; especially the judicial and political background. All during the fifties and sixties, I headed the anti-Communist world in the Republic of Panama and among the 2,800 Panamanian Communists that I exposed during that time, a great number of them today control all of the government oflBces. I would like to comment on some of the points that you brought out in your very informative article : 1. Omar Torrijos did not "seize power from the old oligarchy nine years ago." The coup was led by Major Boris Martinez. Torrijos was kept innocent of the coup because of his excessive drinking problem. (a) When the Communist Party of Panama, headed by Romulo Escobar Bethancourt, Juan Materno Vasquez and Marcelino Jaen, decided on March 6, 1969, to "purge" Martinez, Jaen, who is married to Torrijos' sister, Toya, per- suaded Bethancourt and Vasquez to make Torrijos the head of the National Guard and later in 1972, the Chief of Government. Vasquez now has terminal cancer and although he still heads his self-appointed position as President of the Supreme Court, he does not participate in any important decisions. 2. Torrijos has not "led Panama through its longest period of internal stability." {a) From Panama's first presidency in 1904 to the ninth presidency in 1931, a total of 27 years, is the longest period of internal stability in Panama's history. (&) When the National Guard seized the Panamanian nation in 1968, it instigated "instant" internal stability through the force of arms. 3. The wealth of Panama is not in the "hands of rabiblancos (rich financiers) or Mercedes-driving urban entrepreneurs" but in the pockets of the National Guard oflScers through corruption and patronage. {a) The business community of Panama, aware of what happened in Cuba when Castro declared Cuba a Communist State on Dec. 1, 1961, have transferred their assets out of the country, 4. Yes, Torrijos is a son of rural schoolteachers. (a) Both the mother, Joaquina, and the father, Jose, have been identified as founders of a Communist cell in Veraguas Province ; now the most powerful and influential cell in the Republic of Panama. (&) Omar Torrijos was a member of the Marxist organization "Young Ve- raguas" when he attended the Normal school of the Province of Veraguas. Drew Pearson later identified him on Nov. 19, 1968, as a member of the Communist Party of Panama. (c) At the last day of the Bogota summit meeting on August 6, 1977, Jaime Arango of Super Radio, asked Torrijos at the farewell press conference, "General Torrijos, are you a Communist?" Torrijos did not reply but Bethancourt did saying, "Each individual has the right to choose the political ideology he likes. . ." Bethancourt's complete answer (enclosed) implies that they both are Communists. o. Panama's foreign debt is not "$700 million." {a) The World Bank's computer shows Panama's external debt (enclosed) as of Dec. 31, 1976 to be $1,408,535 billion. The World Bank confirmed that from January 1, 1977 to June 30, 1977, the external debt of Panama increased by (515) 516 $239 million. These two World Bank figures make a total external debt of nearly $1,650,000 billion. 6. Torrijos told Jerry Hannifin "a sea-level canal is not necessary. Such a canal would be excessively costly." (a) During the recent July 1977, Soviet economic mission to Panama (en- closed), a discussion took place on July 16 in which the Soviets said they would consider the possible financing and constructing of a new sea-level canal for Panama. Cordially, Phillip Harman. Excerpt From Statement of Virginia Prewett,^ Washington Columnist on Latin America, North American Newsletter xVlliance, Etc. The perspective that I take may be different from those of most witnesses here because I have no vested interest at all in one or another solution for the Panama Treaty issue. I can understand the concern of the New York banking and business community in view of the huge debts Panama owes in the U.S. There are, more- over, according to the Wall Street Journal, over $8.5 billion in offshore funds on deposit in Panama, and this is a mighty incentive for both New York and Wash- ington to wish to please a demanding Panamanian regime. Further, I thoroughly understand the rationale offered by a host of university internationalists whose career advancement is linked to the "let's not be beastly to the Third World" doctrine. But my experience, my observation and my identi- tications with the interests of the general public give me different perspective. The underdeveloped world saw Fidel Castro, then North Vietnam and finally the Arab oil states make the U.S. back down in crucial tests. And a profound change occurred after 1973 in the Complaint/Demand strategy in Latin America. As mentioned, on the Canal issue, the U.S. was presented by Panama with a Complaint/Demand converted into a Demand/Threat. The point I wish to underline here most seriously is that the Panama Canal issue, blown up as it is today, is not by far the only demand nor the most costly one incubating among Latin Americans. Let me name just two that all here will recognize. In those very spheres from which sprang approval for the Kis- singer-Carter concessionary treaty concept, Latin American specialists in the Complaint/Demand are asking for something called "access to U.S. technology". Ultimately, what they are asking is for the U.S. to give them, presumably at public expense, technology that this country now exports for a return of over $4 billion a year. Another Complaint/Demand bubbling on the cooker is called "debt relief" — or in Spanish, blanqueo, a whitewash wiping-out of debts. That is a Complaint/ Demand that may become a Demand/Threat for Latin America to be relieved somehow of the many billions the region now owes overseas. As with the Panama Canal, in the end this would probably be at taxpayers expense. To reiterate: if the U.S. complies with the Demand/Threat to hand over the Canal and Zone to Panama by the year 2000, this will solve nothing in hemisphere relations. Instead it will stimulate grave problems, new Demand/Threats. Sev- eral features of the proposed treaty indeed guarantee crises later, but we are not here to discuss details of the treaty. U.S. policies for the developing countries cannot be dominated by threats, by small nations in combination, else we lose control of our foreign affairs. Under a gun, there is no such thing as balanced negotiations. It should be pointed out that one main rationale for the Kissinger promise of a new treaty has been overrun by events. The chief rationale, besides, that of keeping Panamanian extremists from having a shot at sabotaging the Canal, was to sweeten U.S. hemisphere relations. But in the interim, measures taken by Congress and the Carter White House in the name of human rights have alienated most of South America and most of Central America. Whatever Latin American governments may say in public, at this stage, a Kissinger-Carter Panama Canal treaty will not improve U.S. relations with these alienated countries. If the courtship gift of the Panama Canal could not sweeten relations with the hemisphere in 1974, much less will it do so today. The U.S. sacrificial gesture will only encourage new Demand/ Threats. And there is a severe loss of credibility for Carter's human rights crusade when the world sees Washington i)enalize various Latin American regimes accused of violating human rights while the White House favors the enormous concessions proposed for Panama's Torrijos. The world knows that Torrijos exiles dissidents, and stands accused of grievous human-rights violations attested in reports of the Panamanian Committee on Human Rights. 1 (Virginia Prewett has lived in Latin America, has farmed in the Brazilian backlands. has written for Washinfrton Daily News, Washington Post, Washington Star. National Observer, Atlantic Monthly. Foreign Affairs Quarterly, the Readers Digest and others. For seven and a half years she has published a newsletter on Latin America that is read In many Washington, New York and Latin American power centers.) (517) Prepared Statement by Hox. Gene Snyder of Kentucky AN AMERICAN CANAL ON AMERICAN SOIL UNDER AMERICAN CONTROL FOR THE GOOD OF THE ENTIRE WORLD 1 DOCUMENTATION REGARDING PERPETUAL UNITED STATES POSSESSION, OWNERSHIP AND CONTROL OF, TITLE TO, AND SOVEREIGNTY OVER THE CANAL ZONE AND THE PANAMA CANAL UNDER THE 1903 TREATY WITH THE REPUBLIC OF PANAMA AS REVISED AND UPDATED IN 193 6 AND 19 55 I. On March 8, 1880. President Rutherford B. Hayes sent a special message to Congress in which he declared : "... I deem it proper to state briefly my opinion as to the policy of the United States with respect to the construction of an interoceanic canal by any route across the American isthmus. ''The policy of this conniry is a canal under American control. . . . If existin^g treaties between the United States and other nations, or if the rights of sover- eignty or property of other natimis stand in the way of this policy . . . suitable steps should he taken> by just and liberal negotiations to promote and establish the American policy . . . An interoceanic canal across the American isthmus . . . will be the great ocean thoroughfare between our Atlantic and our Pacific shores, and virtually a part of the coast line of the United States. Our merely commercial interest in it is greater than that of all other countries, while its relation to our means of defense, our unity, peace, and safety, are matters of paramount concern to the people of the United States. No other great power would under similar circumstances fail to assert a rightful control over a work so closely and vitally affecting its interest and welfare. "Without urging further the grounds of my opinion, I repeat — that it is the right and the duty of the United States to assert and maintain such supervision and authority over any interoceanic canal . . . as icill protect our national irderests." II. On March 3, 1899, President William F. McKinley approved a rivers and harbors act of Congress titled. "An act making appropriations for the construction, repair, and preservation of certain public works on rivers and harbors, and for other purposes." Section 3 of that Act. in part, reads as follows : "That the President of the United States of America be, and he is hereby, authorized and empowered to make full and complete investigation of the Isthmus of Panama with a view to the construction of a canal by the United States across the same to connect the Atlantic and Pacific oceans : . . . And generally the Presi- dent is authorized to make such full and complete investigation as to determine the most feasible and practicable route across said isthmus for a canal, together with the cost of corMructing the same and placing the same under the control, management, and ownership of the United States.'' III. On January 18. 1902, the Isthmian Canal Commission appointed by Presi- dent McKinley under the rivers and harbors act of 1899, reiwrted to the President of the United States. In its rei)ort. the Commission headed by Rear Admiral John G. Walker, one of the ablest naval officers of his generation, declared : ". . . a new arrangement must be made if an isthmian canal is to be constructed by our Government across the Isthmus of Panama. ''The grant must be not for a term of years, but in perpetuity, and a strip of territory from ocean to ocean of sufficient iridth must be placed under the control of the United States. In this strip the United States must have the right to enforce police regulations, preserve order, protect property rights, and exercise such other powers as are appropriate and necessary." IV. The Six)oner Act of 1902 mandated the President as follows : ". . . the President is hereby authorized to acquire . . . perpetual control of a strip of lamJ. the territory of the Republic of Colombia . . . and the right to use and dispose of the waters thereon, and to excavate, construct, and to perpetually main- tain, operate, and protect thereon a canal . . . the sum of ten million dollars is hereby appropriated out of any money in the Treasury not otherwise appropriated, toward the project herein contemplated . . ." (518) 519 V. The Isthmian Canal Convention of 1903 (Hay-Bunau Yarilla Treaty) states the following : Article II : "The Repuhlic of Panama grants to the United IStates in perpetuity the use, occupation and control of a zone of land and land under water for the construction, maintenance, operation, sanitation and protection of said Canal of the width of ten miles extending to the distance of five miles on each side of the center line of the route of the Canal to be constructed ..." Article III : "The Republic of Panama grants to the United States all the rights, power and authority within the zone mentioned and described in Article II of this agreement and within the limits of all auxiliary lands and waters mentioned and described in said Article II which the United States would possess and exercise if it were the sovereign of the territory within which said lands and waters are located to the entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power or authority.'' VI. Article 3 of the 1904 Constitution of the Republic of Panama states : "The territory of the Republic remains subject to the jurisdictional limitations stipulated, or which may be stipulated in public treaties concluded with the United States of North Ami rim for the construction, maintenance, or sanitation of any means of interoceanic transit." VII. The 1904 U.S. -Panama Boundary Agreement states : "Whereas by the terms and provisions of Article II of the Convention for the Construction of an Interoceanic Canal between the United States of America and the Republic of Panama, signed by the representatives of the two nations on November 18, 1903, the ratifications of which were exchanged, at Washington on the 26th day of February, 1904. the United States acquired the right of use, occupation, and perpetual control from and after the said 26th day of February, 1904, in and over the Canal Zone and other lands, waters, and islands named in said Article II of the convention aforesaid ; and . . ." "Whereas in order that said work of construction of said interoceanic canal may be systematically prosecuted, and in order that a government for the Canal Zone created by the terms and provisions of said Article II of said convention may be successfully organized and carried forward, it is necessary that the extent and boundaries of the said territory ceded to the Gorermnent of the United States by the Government of the Republic of Panama under the terms and provisions of said convention shall be provisionally determined and agreed upon . . ." VIII. In the 1907 decision. Wilson v. Shaw, Secretary of the Treasury, the Supreme Court cited the plaintiff's contentions. Among them : "He contends that whatever title the Government has was not acquired as provided in the act of June 28, 1902, by treaty with the Republic of Colombia . . . Further, it is said that the boundaries of the zone are not described in the treaty ..." The Court declared : "A short but sufficient answer to that subsequent ratification is equivalent to original authority. The title to what may be called the Isthmian or Canal Zone, which at the date of the act was in the Republic of Colombia, passed by an act of secession to the newly formed Republic of Panama. ... A treaty with it, ceding the Canal Zone, was duly ratified. 33 Stat. 2234. Congress has passed several acts based upon the title of the United States. "It is hypercritical to contend that the title of the United States is imperfect, and that the territory described docs not belong to this Nation, because of the omission of some of the technical terms used in ordinary conveyances of real estate " "Alaska was ceded to us forty years ago, but the boundary between it and the English possessions east was not settled until within the last two or three years Yet no one ever doubted the title of this republic to Alaska." I call to your attention that the Court used the words "cede" and "title" in reference to both Alaska and the Canal Zone— and used the same words in the same decision. IX. The Panama Canal Act of August 24, 1912, specified in Section 3 • "That the President is authorized to declare by Executive order that all land and land under water within the limits of the Canal Zone is necessary for the construction, maintenance, operation, sanitation, or protection of the Panama Canal, and extinguish, by agreement when advisable, all claims and titles of adverse claimants and occupants. Upon failure to secure by agreement title to any such parcel of land or land under icater the adverse claim or occupancy shall be tlZZ ^ title thereto secured in the Umted States and compensation therefor fixed and paid in the manner provided in the aforesaid treaty with the 520 Republic of Panama, or such modifications of such treaty as may hereafter be made." X. By Executive Order on December 5, 1912, President William H. Taft, in ac- cordance with the Panama Canal Act of 1912, took possession of all land in the Zone. That order reads : "Lands in Canal Zone to be Taken for Canal Purposes : By virtue of the author- ity vested in me by the Act of Congress entitled 'An Act to provide for the opening, maintenance, protection, and operation of the Panama Canal, and the sanitation and government of the Canal Zone.' approved August 24, 1912, I hereby declare that all land and land under water within the limits of the Canal Zone are neces- sary for the construction, maintenance, operation, protection, and sanitation of the Panama Canal, and the Chairman of the Isthmian CavMl Commission is hereby directed to take possession, on behalf of the United States, of all such land and land under water; and he may extinguish, by agreement when practicable, all claims and titles of adverse claimants to the occupancy of said land and land under water." XI. The 1914 U.S. -Panama Boundary Convention states : "Whereas, Gen. George W. Davis, then Governor of the Canal Zone, on behalf of the United States of America, and Messrs. Thomas Arias and Ramon Valdes Lopez, then Secretary of Foreign Affairs and Attorney General, respectively, of the Republic of Panama, acting on behalf of that Republic, entered into an agree- ment on the 15th day of June, 1904, by the terms of which the Republic of Panama delivered over to the United States of America, the use, occupation, and control in perpetuity of the zone of land ten miles in width described and mentioned in articles II and III of the Canal Treaty . . ." "It is agreed that the Republic of Panama shall have an easement over and through the waters of the Canal Zone in and about Limon and Manzanillo bays to the end that vessels trading with the City of Colon may have access to and exit from the harbor of Colon, subject to the police laws and quarantine and sanitary rules and regulations of the United States and of the Canal Zone established for said waters. . . ." XII. The 1914 Treaty between the U.S. and the Republic of Colombia declares in Article I : "The Republic of Colombia shall enjoy the following rights in respect to the interoceanic Canal and the Panama Railway, the title to which is now vested entirely and absolutely in the T'nited States of America, without any incum- brances or indemnities whatever:' XIII. The 1936 Treaty of Friendship and Cooperation between the U.S. and Panama contains the following Article XI : "The provisions of this Treaty shall not affect the rights and obligations of either of the two High Contracting Parties under the treaties now in force be- tween the two countries, nor be considered as a limitation, definition, restriction or restrictive interpretation of such rights and obligations, but without prejudice to the full force and effect of any provisions of this Treaty which constitute addition to, modification or abrogation of, or substitution for the provisions of previous treaties." I call to your attention that in commenting on this Article in his Summary of Essential Features of this agreement, printed in the Report of the Senate Foreign Relations Committee on the Treaty, Secretary of State Cordell Hull dedared : ''The juridical status of the Canal Zone, as defined in article III of the 1903 convention, thereby remains unaltered." XIV. The 1955 Treaty of Mutual Understanding and Cooperation between the U.S. and Panama was the subject of Senate hearings. Assistant Secretary of State for Inter-American Affairs, Henry F. Holland was questioned as follows : "Senator Fulbright. Would you say that there is anything in this agreement which might possibly be construed as a waiver of our paramount rights in the Canal Zone? "Mr. Holland. No, sir ; and, as a matter of fact, I believe that the permanency and stability of those rights are strengthened by this treaty because of the inclu- sion in the treaty of the phrases that I referred to in my opening statement. That is the inclusion of the phraseology in the preamble that no part of the treaty of 1908 or the treaty of 1936 or this treaty can be changed save by mutual agreement of the parties, and the specific and afiirmative recognition in article I by the parties of the absence of any obligation on the part of either party to change the annuity . . ." "Senator Wiley. As I understood from you. Secretary Holland, there is nothing in this present treaty that would in the slightest degree depreciate all the attributes of sovereignty that we possess. 521 "Mr. Holland. That is true ; and so true is it, that in the course of the negotia- tions the Panamanians advanced several small requests which, 1 by 1, had con- siderable appeal, but all of which we refused, because ive did not want to leave 1 grain of evidence that could a hundred years hence Re interpreted as implying any admission by the United States that we possess and exercise anything less than 100 percent of the rights of sovereignty in this area.'' XV. In Roach v. United States, 458 F. 2d 1054 (5th C.A.) cert, den'd. 406 U.S. 935, decided on Dec. 30, 1971, the Court of Appeals declared : ''The Canal Zone is an unincorporated territory of the United States. Conven- tion between United States and Republic of Panama, Nov. 18, 1903, 33 Stat. 2234, arts. 2, 3 ; General Treaty between United States and Panama, Mar. 2, 1936, 53 Stat. 1807 ; 2 C.Z.C. § 1 et seq." XVI. Section 701, Title 2 of the Canal Zone Code (last revised in 1963) reads : ''The Government of the United States possesses, to the exclusion of all foreign nation's, sovereign rights, power, afid authority over the air space above the lands and waters of the Canal Zone. Until Congress otherwise provides, the President shall prescribe, and from time to time may amend, regulations governing aircraft, air navigation, air-navigation facilities, and aeronautical activities within the Canal Zone, 76A Stat. 29." International law recognizes that a nation has absolute sovereignty over the superjacent air space above the land and water constituting its sovereign territory. THE ANNUITY The Hay-Herran Treaty of 1903 between the U.S. and the Republic of Colombia, never ratified by the latter, states in Article XXV : "As the price or compensation for the right to use the zone granted in this con- vention by Colombia to the United States for the construction of a canal, together with the proprietary right over the Panama Railroad, and for the annuity of two hundred and fifty thousand dollars gold, which Colombia ceases to receive from the said railroad, as well as in compensation for other rights, privileges and ex- emptions granted to the United States, and in consideration of the increase in the administrative expenses of the Department of Panama consequent upon the con- struction of the said canal, the Government of the United States binds itself to pay Colombia the sum of ten million dollars in gold coin of the United States on the exchange of the ratification of this convention after its approval according to the laws of the respective countries, and also an annual payment during the life of this convention of two hundred and fifty thousand dollars in like gold coin, begin- ning nine years after the date aforesaid . . ." The identical financial features of this Article were incorporated in Article XIV of the Hay-Bunau Varilla Treaty with Panama. Clearly, we could not offer less to Panama than already offered to Colombia. The annuity therefore was to indemnify for loss of income from the Panama Railroad, and never was a lease payment. "Subsequent increases in the annuity were made in the 1936 and 1955 Treaties. Both Treaties spell out that the increases w^ere not required by any treaty provi- sion. The annuity was increased in the 1936 Treaty to $430,000. Senate Report 2375 dated June 27, 1956 from the Committee on Interstate and Foreign Commerce explained this : . . the monetary agreement with the Republic of Panama of June 20, 1904, provided for payment of the annuity in gold balboas. Hence, when the American gold dollar, and later the Panamanian balboa, were devaluated as the result of the gold standard by the United States in 1934, the annuity payment in gold balboas was increased to $430,000 solely to compensate for the decrease in gold content of the balboaarked. Inasnuch as the only parties aware of the planned arrest of Moises Torrijos other than BMDD were the U.S. Department of State and the Central Intelligence Agency, Moises Torrijos could only have been alerted to the planned arrest by United States authorities. 533 During rqy tenure as Special Agent in Charge of Drug Enforcement, I did not have another opportunity to effect the arrest of Nfoises Tbrrijos. In fact, during my tour of duty as Customs Attache before assuming ccnmand of the cofTtoined Custoras and BNED forces, I was advised that Washington officials of the Bureau of Narcotics and Dangerous Drugs traveled to Panama, met with Colonel Noriega, Chief of Panamanian Intelligence, and with General Omar Torrijos, and alerted them both to the existence of an indictment and warrant conoeming the General's brother, Moises. To the best of my know- ledge, the warrant for the arrest of ^^^ises Torrijos is still in existence and presumably, if he touches U.S. soil, he is still liable to arrest. During my tour of duty in Panama, several cases which were presented to the Panamanian enforcerent officials were inysteriously terminated or not given prcper attention. Due to rny knowledge of their involvement, many cases were not presented to Panamanian enforcement officials so as not to conpro- mise iqy investigation. Finally, I did not feel that I had the full support of the diplomatic comnunity in the pursuit of my assigned mission in Panama, especially in those matters which tended to implicate officials of the Govermrent of Panama. In any event , due to the eventual assigrment of a State Department enployee as the narcotics coordinator, I was relegated to a secondary position. Similar conditions now exist in most embassies where Drug Enforcanent perscainel are assigned, and in almost all cases, the Department of State eiiployee has no narcotics training nor expertise. It is my opinion that Department of State personnel are placed in the pcsitico of narcotics coordinator primarily to insulate and protect the activities of the Department of State frcra any so-called disrxg>ting 534 incicJent regaxding narcotics enforcanent directed against an official of the host govemnent. Given under ray hand and seal on this the first day of Decen±)er, 1977, in the City of Washington, District of Ooluntoia. Inland L. Riggs, Jr. ^ NOTARIZATION: Subscribed and sworn to by Leland L. Riggs, Jr. before me this first day of Decertoer, 1977 (L 535 STATEMENT OF LELAND L. RIGGS, JR. FOR THE USE OF THE SUBOOmTTEE CN SEPARATION OF POWERS OF THE OOMMITrEE CN THE JUDICIARY UNITED STATES SENATE Leland L. Riggs, Jr., being duly sworn, deposes and says: On approximately November 21, 1977, I was called at ruy residence in Texas by Mr. Bill Link, Special Assistant to Mr. Peter Bensinger, the Adninistrator of the Drug Enforcement Administration. Mr. Link advised me that the Attorney General's office was reviewing investigative reports of mine written while I was staticaied in Panama and that within a few minutes the Attorney General's office would call me and that I was free to discuss these reports or answer any questions asked of me. A few minutes later, a Mr. Bushong called and stated that he was reading a report written by me concerning plans to attsipt the arrest of Moises Torrijos in the U.S. Canal Zone. Mr. Bushong stated that my report advised that Moises Torrijos, wtio was enroute fron Spain by vessel to the Panama Canal Zone, had suddenly disenbarked in Caracas, Venezuela, and was flown to Tocumen Airport in the Repiiblic of Panama where I had no jurisdicticn, leaving his wife on board the vessel to travel to the Canal Zone. Mr. Bushong asked for opinicm as to how Moises Torrijos was advised of his impending arrest wbich caused him to change his travel plans. I stated 536 that I felt the Government of Panama, and hence Torrijos, was advised of the planned arrest either by the United States Department of State or by the Central Intelligence Agency. GivQi lander my hand and seal on this the fir-st day of Decenber, 1977, in the City of Washington, District of Colunbia. Lei and L. Riggs, Jr."-^^ " NOTARIZATIOJ: Subscribed and sworn to by Leland L. Riggs, Jr. before me this first day of Decenher , 1977 ^ o i I I