and make life more peaceful and more livable for everyone. This committee has participated in and masterminded our aid program for years. However, from observing the attacks on the United States in the United Nations and other places, it is apparent that a great nation such as ours cannot buy affection.

One more move in this direction in my view will have little or no effect. What we in the United States should strive for is not affection, but respect. I am seriously concerned about the trends in recent years wherein we have withdrawn from Vietnam, are planning to withdraw from South Korea, have lost considerable influence following the Angola affair, and overall we are suffering from a gradual change in the perception by the nations of the world of the will and determination of the most powerful democracy in the world.

FEAR OF SABOTAGE

With respect to the second point, fear. Ever since the negotiations were initiated with Panama in 1964, the rationale has been advanced that if the United States did not divest itself of the canal the Panamanians would sabotage it.

To respond to this concept to me would be a retraction under threat. If this is to be our course of action in the future, we might as well throw in the international towel.

One should note from a practical point of view that the Panamanians enjoy the highest per capita income of any of the contemporary Latin American countries only because of the presence of the canal. The activities surrounding the presence of the canal contribute, directly or indirectly, about one-third of the employment and onethird of the gross national product of Panama.

If they were to attempt to damage or sabotage the canal, they would be doing nothing more than cutting off their noses to spite their fiscal faces.

Furthermore, they would be the ones who would be committing violence, not the United States. To me, a pulling back under threat will simply lay our country open to additional threats and we will lose the respect of which I spoke. Under such a condition, one could expect many of the nations of the world to tilt toward those who they know are willing to take a firm stand in their national interest.

UTILITY OF CANAL

With respect to the utility of the canal, item 3, so far as the question of a two-ocean Navy and the passage of aircraft carriers through the canal is concerned, let me say emphatically first that we do not have a two-ocean Navy. In recent years, the Navy has been rapidly reduced from over 900 ships to less than 500, while the Soviets are engaged in a rapid expansion of their fleets of warships as well as merchant ships. A large majority of our war plans and contingency plans are totally infeasible unless one assumes that full and priority use of the canal will be available.

With respect to the large carriers, the Navy has only 13 of these ships. The vast majority of the Navy's ships, well in excess of 90 per

cent, will be required to transit the canal, and they can transit the canal. I should note that the other alternative, Mr. Chairman, namely going around Cape Horn, will add 8,000 miles, 25 to 30 days and a considerable increase in the cost of fuel to naval operations. Everyone knows, too, that in wartime 30 days well could be vital.

As far as the merchant ships are concerned, it is true that only about 10 percent of the ships flying the U.S. flag transit the canal. But that is not the point. It is well known that the United States has a very small merchant marine and that the shipping interests in our country, for various legal and fiscal reasons, resort to what is known as a "flag of convenience." What really counts is the tonnage which transits the canal en route to and from ports in the United States. It so happens that out of about 14,000 ships that transit the canal, 8,000 or more are either en route from or bound for U.S. ports. Furthermore, it has been estimated by reliable authority that the cost of our transport of our exports would increase by over $900 million without the canal, and the cost of our imports would increase over $500 million without the use of the canal.

So much for these three reasons.

Finally, Mr. Chairman, there are several questions somewhat outside my purview, but very troublesome nevertheless, and I will simply list them for you.

PERCEPTION OF TREATY LANGUAGE MEANING

Question No. 1: Do the negotiators for Panama and the United States have the same perception as to the real meaning of the language in the treaty? Public statements by both sides subsequent to the negotiations seem to indicate otherwise. Certainly this matter should be cleared up without delay. Let me give you examples of conflicting statements which to me are matters of grave concern.

The proponents of the treaties state that article IV of the treaty concerning the permanent neutrality and operation of the Panama Canal guarantees our continuing freedom of action for unilateral intervention to maintain the canal's neutrality. I can find nothing in article IV which guarantees to the United States the right to unilaterally intervene for any purpose.

Article V states that only Panamanian forces will be based in Panama after the termination of the treaty. In a radio broadcast on August 24, Mr. Bethancourt said, and I quote:

The pact does not establish that the United States has the right to intervene in Panama. The word was discussed and eliminated. The Neutrality Pact does not provide who will say when neutrality has been violated.

Again, on September 15, General Omar Torrijos at the opening of the 10th Congress of the Panamanian Students Federation at the Augusto Samuel Boyd National Agriculture Institute in Divisa, Herrera Province, said, and I quote:

I am not afraid, nor am I denying, that we signed a clause which if misinterpreted by future U.S. generations could give rise to intervention. But I am not afraid, I know the youth that we are producing. And in order for there to be intervention there must be a people willing to accept intervention, and these people have no intention of accepting it.

This statement was followed by rousing applause,

Again, on the subject of guaranteeing U.S. flagships priority passage, article VI only guarantees U.S. ships "expeditious" not "prior ity" passage. Mr. Bethancourt also disagrees with this interpretation as testified to by our negotiators before this very committee. Quoting him once more: "Expeditious passage does not mean privileged or priority passage. As a matter of fact, the concept of privileged passage was rejected. If, after examining the provision, the Gringos"-that's us-"say 'I want to go through first,' then that is their problem with the other ships waiting there. We cannot go that far."

Mr. Chairman and members of the committee, in view of the above statements I do not think that anyone can contradict the fact that there is a wide divergence in the interpretation of the meaning of the treaty concerning neutrality between the two sides. This is a cause for grave concern. If not cleared up in advance, this treaty does not eliminate problems-it makes them, and big ones at that.

I would note that representatives of the Defense Department who claim primary credit for the treaty concerning the permanent neutrality and operation of the Panama Canal, as well as members of this committee, frequently make the point that the important objective is passage and not ownership. Mr. Chairman, I submit that ownership and control on one hand and priority passage and defense on the other are synonymous.

In view of the statements by senior Panamanian officials, it is clear to me, at least, that the only way for the United States to guarantee priority passage is to maintain control and ownership. Mr. Torrijos and Mr. Bethancourt have obviously taken a similar position. They say that since Panama will own the canal after the year 2000, the United States will not have priority passage or the right to intervene.

WHAT WILL PANAMA DO WITH INCREASED INCOME?

The next question is what will Panama do with a 2,000-percent increase over the $2.3 million she received last year as income from the canal.

To me that appears to be a fantastic amount for a country with a population not larger than Detroit. I ask the question, where will all this money go?

ABSENCE OF BRAZILIAN AND MEXICAN PRESIDENTS AT SIGNING

CEREMONIES

Question No. 3 is if the O.A.S. nations so strongly support the treaty, how do we account for the absence of the presidents of the two largest and most influential countries at the signing ceremonies in Washington a few weeks ago? I refer, of course, to Brazil and Mexico.

EFFECT OF INCREASED TOLLS ON LATIN AMERICAN SUPPORT FOR TREATY

Question No. 4 is in the event that the tolls are raised 30 percent resulting in serious impact-and it will result in serious impacton the economies of the other Latin American countries, particularly

those on the west coast of South America, will these countries continue their strong support of the proposed treaty or will in the final analysis the U.S. taxpayer be asked to foot the bill in order to make certain that everyone continues to love us?

WILSON V. SHAW RULING

There are other questions which concern me, Mr. Chairman, but I think I will simply close by saying that regarding the question of control and ownership of the U.S. Canal Zone and the canal, I am satisfied with the Supreme Court's decision in the famous Wilson v. Shaw case to the effect that the United States does, in fact, have legal control and ownership as if she has sovereignty 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, and it has never been overruled, and since the Constitution in my opinion is still the soundest governing document in existence, I can only conclude that we would be well advised to abide by such documents in our negotiations with other countries.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Admiral Moorer.

Senator Percy has another committee meeting to which he must go, so I will call on him first for any questioning he may have. Senator PERCY. Thank you, Mr. Chairman.

SOVEREIGN CONTROL OF CANAL AND ZONE

Admiral Moorer, I think your presence here, and Admiral Zumwalt's, is testimony to the fact that two men of good conscience, unquestioned patriotism, and thorough knowledge of the problems involved in this issue can come out on different sides. I think that is why the country is struggling as hard as it is.

When you wrote your very provocative letter to the President on June 8 of this year, which was signed by three other former Chiefs of Naval Operations, you said to the President that you hoped he would instruct the negotiators for the United States to retain "full sovereign control over the canal and the Canal Zone." This was before the treaties had been signed and before the terms of the treaties were known.

Since that time former President Ford and President Carter, Secretary of State Cyrus Vance, former Secretary of State Henry Kissinger, the Joint Chiefs of Staff and many witnesses before us have made it eminently clear that we never did have full sovereign control. In fact, the 1903 treaty grants the United States certain rights it would possess if it were the sovereign of the territory.

Since then you have heard this testimony and seen the treaties themselves. How do you reconcile your position that we have full sovereign

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control when much of the testimony we have had indicates that we really did not ever have full sovereign control?

Admiral MOORER. Well, Senator Percy, I am not a lawyer, and you are getting into what I consider to be a technicality. I believe the treaty of 1903 says we would have control as if we had sovereignty. I won't argue the point of whether we had technical sovereignty or whether we had control as if we had sovereignty. The key word in my view is "control." You can let Panama have sovereignty, if you like, as long as we have the control because that is what is necessary if we are going to make certain that the canal fulfills its place in the overall security and economic strength of the United States.

Senator PERCY. Admiral, I appreciate that. But that is not the wording and we have to live with the wording that was given at that time.

QUESTION OF CANAL MODERNIZATION

Another question that is highly controversial is the question of modernization of the canal, how long this canal will really serve the needs of this country, in light of the fact that major tankers and many military ships cannot go through it now.

Let's assume that we want to modernize that canal, or update its present lock system, or go for a sea-level canal. Could you envision what would happen if we just unilaterally made the decision today to go ahead and modernize it, or to dig a sea-level canal? What kind of problems would this Nation encounter if we don't have a new set of treaties?

Admiral MOORER. As you know, Senator Percy, the treaty itself deals with this to a degree. First it says that the United States does have a right to build a third set of locks between now and the year 2000. It also turns around and says that the United States is not allowed to negotiate with any other country. If we are speaking of sovereignty, I consider that to be a violation of U.S. sovereignty.

I think the canal needs modernization and I dispute strongly anyone who says that the canal is going to be reduced in importance for the reasons you gave in terms of big tankers. I would point out to you that there was a recent study by the Arthur D. Little Co., a rather respected organization, which emphasizes the increase in coastal shipping, not only for the purpose of transferring energy, for instance, from Alaska to the United States but for other reasons, too. I think that everyone should bear in mind that inside South America there is no internal communication. For instance, you cannot go over the Andes from Brazil to Peru. The only way you can get to Peru from Brazil is to go through the canal. So the South American countries depend heavily on coastal transport. That is why I made the point that if the tolls were raised 30 percent and I believe Mr. Linowitz testified that this would be the case-this is going to have a very, very devastating effect on the economies of the small countries in particular. It is my prediction that they are going to be less than enthusiastic about this treaty if it contains the present conditions regarding exces sive payments to Panama.

Senator PERCY. On an economic basis, they possibly should be, but they are not. Politically, they seem to be totally unified.