tion in the planning and the implementation of the defense and security of the Canal, there is established a Combined Board composed of equal numbers of senior military representatives.

Comment: The approval of the treaty by the Joint Chiefs of Staff surely has disarmed many of those who feared it would jeopardize our national interests and security. The basis for the JCS support, as I have learned from press reports and their testimony before the Senate Foreign Relations Committee, is their expressed conviction that the Canal is no longer vital to our national security and defense. They spoke of “external threat" to the Canal as a danger which could be met only by "perimeter defense" by the Navy and the Air Force. A realistic appraisal of the nature of a future war involving the US, and of the attack potential of an envisioned enemy, leads me to the conclusion that the enemy prime targets would be our industrial complex and population centers, and not the Canal. Whether operative or not, the Canal cannot make the difference between winning and losing a war. The loss of the use of the Canal at any time, whether by enemy action or by acts of sabotage, would be an embarrassment but not a disaster to the US.

The JCS, in expressing their concern for the security of the Canal against guerrilla action and sabotage (internal threat was the term they used), emphasized the advantage of having Panama join with the US in thwarting ventures of the kind. It is not improbable that Panamanian dissidents who have long urged the immediate nationalization of the Canal and Canal Zone under the Panamanian Flag will attempt to upset the treaty, even if approved by the Panamanian electorate in the late October plebiscite. The subsequent approval by the US would not quiet these dissidents. All of which signifies that adequate safe-guards against sabotage and acts of violence are urgently required in the existing tension period and perhaps from there on out.

ARTICLE V

Principles of nonintervention

ARTICLE VI

Protection of the environment

ARTICLE VII

Flags

ARTICLE VIII

Privileges and immunities

ARTICLE IX

Applicable laws and law enforcement

ARTICLE X

Employment with the Panama Canal Commission

Comment: These Articles dispel misgivings I had before reading the treaty on the subject matter with which they deal. As well as treaty language can, they safeguard the interests and well being of the US and US nationals, officials and employees of the Commission and those of Panamanian or other citizenship now employed or will be employed by the Commission.

Provision for the transition period

ARTICLE XI

This Article provides that Panama shall resume plenary jurisdiction over the Canal Zone upon the entry into force of the treaty. The period of thirty months thereafter will be one of transition in which to effect orderly jurisdictional arrangements.

Comment: The transitional arrangement provides a period to enable those concerned to surmount the difficulties and heal the conflicts that are certain to occur.

ARTICLE XII

A Sea-level canal or a third lane of locks

Recognizing that a sea-level canal may be important for international navigation, both parties commit themselves for the duration of the treaty to a joint feasibility study; if they find such a waterway necessary they agree to negotiate

terms agreeable to both parties for its construction. Outright authorization is given to the U.S. to construct a third lane of locks.

Comment: The burden and cost of a feasibility study would no doubt fall on the U.S. If Panama, for reasons of her own, refuses to agree to the construction of a sea-level canal as a joint venture, it would be possible (no matter how unlikely) for Panama in the post-treaty period, to proceed on her own, or, as would be more likely, enter into a joint venture with a national or combination of nations foreign to this hemisphere. I see merit in the U.S. being willing to commit itself for the indefinite future to finance and construct a sea-level canal, thereby forestalling Panama entering into an arrangement unacceptable to the U.S. The construction of a sea-level canal has been under consideration for 30 or more years to undertake it under a treaty arrangement as suggested would be no further commitment than we would have made before this had the traffic and other situation required. A sharing of tolls with Panama would provide some compensation for the U.S. The third lane of locks provision is, in my view, a sop to its advocates who have been discredited in every canal study since the mid 1940's.

ARTICLE XIII

Property transfer and economic participation of Panama

The transfer of property will be progressive, that of real property and fixed installations and facilities completed with the termination of the treaty on December 31, 1999.

Panama is to receive "as a just and equitable return on the national resources which Panama has dedicated to the efficient management, operation, protection and defense of the Canal" the following:

(a) A fixed annuity of $10 million.

(b) An annual amount out of operating revenues at the rate of thirty-hundredths of U.S. dollars ($0.30) per net ton of tolls collected. This rate is subject to adjustment after five years and every two years thereafter to provide against inflation.

(c) An annual payment of $10 million for services performed by Panama. See discussion under Article III, Section 5.

(d) An annual payment up to $10 million from such annual surpluses as there may be after the Commission has satisfied its prior obligations. Provision is made for payments from surplus in later years to cover deficits in earlier years. Comment: It has been estimated by others that the toll sharing income to Panama will range from $40 to $50 million a year. If there is added to this the following: $10 million annuity; $10 million for services rendered: and $10 million out of surplus, the total to Panama would range from $50 to $70 million.

If the income remaining after the Commission meets its obligations to Panama is insufficient to cover operating costs, the burden of covering the deficit would, unquestionably, fall on the U.S. Treasury from funds appropriated for that specific purpose. As a matter of fairness, it seems to me, that the treaty should be amended to require the Commission to deduct from tolls income the $10 million payment to Panama for the services rendered and then from the balance cover its operating costs; the remainder would be divided between the U.S. and Panama on some agreed formula. I would not object to a 50-50 split.

Settlement of disputes

ARTICLE XIV

Questions arising in the treaty period are to be referred to the appropriate committee; if not settled there, the issue is to be handled through diplomatic channels. In the event of imrasse, the parties, in appropriate cases. may submit the issue in dispute to conciliation, mediation, arbitration, or such other arrangement as they mutually agree.

Comment: As a condition before the reopening of treaty negotiations after the 1967 fiasco, Panama declared she would not consent to the arbitration of questions relating to her sovereignty. Presumably, Panama would determine the issues impinging on her sovereignty. One suspects that the hedging language in the treaty pending was devised to satisfy Panama.

CONCLUSIONS

It is my firm belief that the Panama Canal is no longer vital to our national interests, security and defense. I cannot conceive of the Joint Chiefs of Staff or

the high principled men in and out of government who support the treaty, holding a contrary opinion. The Canal has long served international shipping as well as our own; manifestly it is in our own best interests, as well as our obligation under the Hay-Pauncefote Treaty provisions relating to international trade, to make no commitments that would place the integrity of the Canal in jeopardy. Surely those supporting the treaty would not knowingly do so.

My stated objections to certain provisions of the treaty are not, in my well considered opinion, of such importance as to warrant its rejection. I consider the sharing of tolls income with Panama as overly generous-in fact the sharing formula seems to me to risk deficits which the US would be obligated to cover. The remedy I suggest is discussed under Article XIII.

In the discussion of Article XII, I faulted the treaty arrangement for the construction of a sea-level canal. The alternative I propose would involve no greater financial commitment by the US if the sea-level were to be constructed under existing conditions. If the US were to finance and construct the sea-level canal under the treaty, whether under the terms now embodied in the treaty, or under the arrangement I propose, it would seem only fair that the US share in the net tolls income.

*

LEGISLATIVE ARGUMENT

Members of the House of Representatives assert that the treaty must have the approval of the House in accordance with Article IV, Section 3, of the Constitution which provides that: "the Congress shall have the power to dispose of Property belonging to the United States." Attorney General Bell. in disputing this contention, cites a Supreme Court decision of 1829 that “whenever a treaty operates of itself, rather than being a commitment to enact legislation, it is the equivalent of an act of the legislature."

LEGISLATIVE REQUIREMENTS UNDER THE TREATY

The Foreign Relations Committee hearings revealed that legislation would be required: (1) to establish the Panama Canal Commission and its functions and responsibilities; and (2) procedures for fixing toll rates in the treaty period.

NEUTRALITY OF THE PANAMA CANAL

There was negotiated as a companion to the basic Canal Treaty and subsequently signed: Treaty concerning the permanent neutrality and operation of the Panama Canal. I have made no attempt to analyze this treaty since its terms are already in dispute, not only within our own government, but with respect to interpretations placed on it by the Panamanian negotiators.

THE HAY-BUNAU-VARILLA TREATY OF 1903

As a matter of interest to those who contest Panama's claim of sovereignty over the Canal Zone, I quote Article II of the 1903 Treaty: "The Republic of Panama grants to the United States all the rights, power and authority within the Zone mentioned in Article II . . . which the United States would possess and exercise if it were sovereign. to the entire exclusion of the exercise

by the Republic of Panama of any such sovereign rights, power, or authority". Comment: What Panama is seeking is an expression of willingness to give up the rights, power and authority which we were given through a treaty arrangement.

FOOTNOTES

At the point of completing this opus, I received a copy of the message from the President on the Panama Canal Treaties dated September 16, 1977, published as Senate Document, Executive "N", 95th Congress, 1st Session. Copies surely can be obtained by writing one's Senator. An excellent document in great detailto me, most assuring.

I started this for my own enlightenment as I did my analysis of the 1967 draft of treaty-that time in great detail because it was not only simpler, but, as I determined, deficient in content. I have had several requests for my opinion of the pending treaty-hence this somewhat labored analysis.

HOOVER INSTITUTION ON WAR, REVOLUTION AND PEACE,
Stanford, Calif., October 10, 1977.

Mr. ROBERT DOCKERY,

Staff, Senate Foreign Relations Committee,

U.S. Senate, Washington, D.C.

DEAR MR. DOCKERY: In extension of our recent phone conversation, I am forwarding a statement for possible inclusion in the Hearings on the Panama Canal treaties.

I also include for your information a copy of my article "Canal Diplomacy and U.S. Interests" from the January 1977 Naval Institute Proceedings.

Sincerely,

PAUL B. RYAN,
Captain, USN (Retired),
Research Associate.

Enclosure.

PREPARED STATEMENT OF CAPT. PAUL B. RYAN, USN (RETIRED), RESEARCH ASSOCIATE, THE HOOVER INSTITUTION, STANFORD UNIVERSITY, STANFORD, CALIF.

THE STRATEGIC SIGNIFICANCE OF THE CANAL

The degree in which the maritime and naval posture of the United States will be adversely affected if the treaties of 1977, as presently drafted, are approved seems to be ignored by treaty proponents. The Panama Canal is one of the world's chief maritime choke points, equal in strategic significance to the Suez Canal, the Strait of Gibraltar, the Persian Gulf, and others. These critical maritime passages are vital in linking the United States with its overseas allies and in maintaining access to vitally needed raw materials.

The Soviet Union, using a combination of naval strength and politicalmilitary maneuvers, seeks to establish a presence in the areas surrounding these strategic choke points. To the degree it is successful, the U.S. Navy's ability to maintain control of the sea lanes is proportionately weakened. In this global strategic picture the Panama Canal is bound to constitute a major consideration for Soviet naval planners.

We have 41 allies overseas. Much of the ship traffic between the United States and these allies crosses the Caribbean-South Atlantic sea routes. This strategic area is now uncomfortably close to Soviet ship and aviation bases in Cuba, and to potential bases in southern Africa. Fidel Castro has established "aid" missions in Jamaica and Guyana, relatively near to the Canal. The Cuban Embassy in Panama City has some 60 staff members, far more than normally necessary. Finally, in July 1977, a Soviet trade mission visited Panama and signed an economic and cultural pact. All of this activity, which is plainly inimical to the U.S. presence in Panama, cannot but help the Soviets in their effort to establish a foothold near the Canal.

Meanwhile, Moscow is circumspect in its attitude vis-a-vis Panama simply because the Kremlin does not wish to upset its relations with Washington on such matters as the SALT talks or Middle East negotiations. Soviet bases in Cuba, coupled with Russian political and economic penetration of Latin America (particularly Panama), represents a visible threat to the fate of the Canal in the years ahead. This Soviet presence in Cuba is alone sufficient to justify U.S. operational control over the waterway, without which our naval ship transits are not guaranteed when they would be most needed.

Why should we worry about the above considerations when proponents of the treaties currently under consideration claim that they give the United States rights of intervention (to preserve the Canal's neutrality) and of priority ship-transits? The main reason is that the United States cannot count on its interpretation of the treaties to be upheld. For example, General Omar Torrijos. in September 1977, on a Spanish television broadcast, declared: "If the United States interprets this [right to preserve neutrality of the Canal through intervention] as a right to intervene, then this is just the interpretation of a major power which intervenes not only in Panama but throughout the world."

1

1 FBIS. Latin America. Daily Report, Vol. VI, No. 183. 21 September 1977, p. N-1. Alberto Valverde undated Washington interview with Brigadier General Omar Torrijos.

99-213 O - 78 - 40

Clearly, the U.S. and Panama have not yet come to common understanding on treaty terms. This should come as no surprise. The history of 60 years of U.S.Panama relations shows that Panama has continually employed the negotiating devices of setting forth demands, getting agreement from Washington, signing the pact, and then presenting more demands. The pitfalls of joint-defense arrangements with Panama are as evident in 1977 as in 1940-41. At that time delayed, for over a year, Washington's request that Panama provide defense sites outside the Canal Zone as "guaranteed" by the Treaty of 1936. U.S. Army forces finally occupied the sites, without any agreement by Panama, only eight months before Pearl Harbor.

The point is that the United States sees the Canal, first, as a world waterway open to all, and, second, as a strategic asset which must be defended so that there will be no question about its use in time of crisis. But Panama continues to view the Canal as a prime source of income and to regard itself as a Latin-American Switzerland immune from international friction and wars. Panama's concept conflicts with the plain fact that the United States has a responsibility to preserve the security of its allies and that of the Western Hemisphere.

We should recognize that the Soviets will use their naval power in maneuvers short of war to support its political and economic moves in the Caribbean-Latin American area. Moscow's goal is to isolate the United States from its allies and its sources of raw materials by measures short of all-out war. There is no cheaper way to gain domination over the United States.

Whether the treaties of 1977 are approved or rejected, all signs point to the unhappy likelihood that the political future of the Torrijos regime will be stormy and possibly chaotic. It seems only prudent for the Senate to ensure that any new diplomatic pact with Panama must include iron-clad rights of the United States to maintain operational control of the Canal and its surrounding land and water areas. To do otherwise will lead inevitably to U.S. military incursions into Panama with somber consequences.

General Torrijos' regime seized power by a military coup in 1968. His hold on the populace is undoubtedly tenuous. For the U.S. government to conclude two treaties, which, in effect, relinquish complete U.S. control of the Canal and the Canal Zone, in the hope that these treaties will best serve our national security interests by "guaranteeing" unimpeded use of the waterway, is unrealistic and disproved by the historical record. In the light of the above, the United States Senate should not allow the Canal, a major strategic asset, to pass from our operational control.