faraway consequences, which would include the loss of U.S. naval bases at Guantanamo in Cuba and in Puerto Rico. These two bases, with the Panama Canal, form the defense triangle for protecting the strategic Caribbean, which Admiral Mahan and other eminent strategists long ago described as the Mediterranean of the Americas. Upon the outcome of the projected giveaway will depend whether the advantageously located Caribbean Sea and Gulf of Mexico shall be transformed from peaceful avenues for ocean commerce into red lakes, thereby bisecting the Americas with enormous potentials for evil for the United States, Latin America, and the entire Free World. Senator ALLEN. Excuse me, Mr. Flood. We have a vote in progress now. As soon as five lights come on, we will have to go.

I would like to address this inquiry to both of you. Would you like for us to come back immediately and conclude yours and Mr. Crane's testimony? Or would you prefer to have a recess to lunch?

Mr. FLOOD. Mr. Chairman, I can finish mine in 11⁄2 minutes.
Senator ALLEN. Please proceed.

Mr. FLOOD. In the past, the responsible leaders of the United States always safeguarded and defended the territories over which it had sovereign control. They and the Congress never surrendered U.S. sovereign territory under threats of foreign military or mob assaults, however large the country, but stood up for American rights under international law.

Yet, since World War II, through a succession of administrations, certain leaders have sought to surrender our sovereign control over the U.S. owned Canal Zone and, eventually, the Panama Canal itself to the Republic of Panama.

A small, weak and industrially primitive tropical country, it simply does not possess the resources, the manpower, or technical skills required for the efficient maintenance, operation, sanitation, and protection of the most vital waterway of the Americas. The satisfactory performance of these crucial functions requires the combined technological, industrial, military, and naval might of the United States, or that of some other great power-if you know what I mean.

Mr. Chairman, though my statement on July 29 and its attachments cover the more important aspects of the canal situation and need no elaboration, as a member of the Subcommittee on Defense of the House Committee on Appropriations, I wish to stress a major point.

The historic Isthmian canal policy of the United States has always been to safeguard our economic and broad national interest investments involved in the construction, maintenance, operation, sanitation, and protection of the Panama Canal enterprise by insisting upon sovereign control in perpetuity over the area in which it is located. I feel sure that many Members of the Congress still share this view and will demand adherence to that policy.

There is a vast difference between managing a canal with sovereign control over the territory in which it is located and one in an area over which the United States has only "treaty rights" and is beholden to a weak Central American country.

As to the reactions of Latin Americans to the projected U.S. surrender at Panama, which have been so falsely used by its advocates, I have seen no better statement than that of the late Dr. Mario Lazo, the distinguished Cuban lawyer and author who, in his 1976 paper wrote:

The almost universal reaction among the educated people of Latin America who are not politicians to a promulgated Kissinger-Bunker giveaway treaty would be, at first, incredulity, then sadness and eventually ridicule and even contempt for the once greatly respected nation that had shown itself no longer to have the will to maintain its prestige and discharge its responsibilities.

The Panama Canal now contributes the grave issue that can serve as a catalyst to restore the courage and willpower of the American people.

Thank you very much, Mr. Chairman.

Senator ALLEN. Thank you very much, Mr. Flood.

The material to which you referred will be made a part of the record, without objection.

[Material follows:]

Special Study No. 1

Council for Inter-American Security

1977

PANAMA CANAL GIVEAWAY: A LATIN AMERICAN'S VIEW BY MARIO LAZO

Panama Canal Giveaway: A Latin American's View was written shortly before Mario Lazo's death in 1976. Mario Lazo went to Cuba after receiving his law degree from Cornell and serving as a Captain in the U.S. Army in World War I. He took a law degree from the University of Havana and later founded and headed on of Latin America's most prestigious law firms. Through the years his firm represented the U.S. Government, major corporations, and a distinguished Cuban clientele.

After the fall of Batista, Dr. Lazo valiantly continued his law practice in Havana. Imprisoned and threatened with execution by the Castro regime, his wife, Carmen, saved his life and helped him escape to the United States. For the next seven years Dr. Lazo set himself the task of writing Dagger in the Heart which even The New Republic has called "the best account to date of Castro's victory," bringing to the undertaking the investigative skills of a great lawyer, and a reputation that permitted him to reach into the highest official circles in Washington.

The fate of the Panama Canal deserves a prominent place among the issues facing the Congress of the United States and the New Administration. The American people should be informed and alerted on the subject. What are the basic facts?

By the treaty of 1903 the United States bought from Panama for cash plus an annuity, a strip 50 miles long and 10 miles wide through a pestilential tropical zone wracked by fevers but containing the most feasible pass between the Atlantic and Pacific oceans. The treaty granted the United States perpetual 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 Americans who went to work in this inhospitable environment wrought a miracle in 11 years. They created a disease-free inter-ocean waterway which remains to this day one of the wonders of the world. For more than 60 years the United States has operated the Canal for the benefit of the commerce of all nations, lifting in recent years more than 15,000 ships annually across the continental divide, moving them quickly, safely and economically from one ocean to the other. This achievement forms one of the most inspiring records in history-and those who have profited most from it are the people of Panama. Had it not been for the United States they would still be crossing the Isthmus on muleback, as they did for centuries under Spain and Colombia, for only the United States could have undertaken the great and costly venture.

In fact, for over 60 years Panama has lived off the Canal. The annuity paid by the United States to Panama is by now many times the amount originally agreed upon. More than two-thirds of the approximately 24,000 workers in the Canal Zone are citizens of Panama. The public vessels of Panama are put through the locks free of charge, but the ships of the United States and of other nations pay a standard toll that has only been raised once in 62 years. Various properties in Panama, worth many millions, have been deeded back to Panama by the United States without charge. A trans-Isthmian automobile highway on Panamanian territory, paralleling the Canal Zone, was constructed by the United States for Panama without cost, but Panama has failed to keep it in good condition. A great bridge, also built at no cost to Panama, connects Panama City with the western half of the country.

The United States has thus been more than fair and generous to Panama. Yet every modification of the 1903 treaty has provoked progressively more extravagant demands. Panamanian politicians portray Americans within the Canal Zone as monsters, and Communists and other leftists throughout the Hemisphere make common cause with them against the United States. The lesson of history that appeasement rarely appeases has not been learned by the State Department as it continues amisguided effort to turn off the spigots of hatred and defamation in Panama against the nation that has converted a deadly swamp-land into a great garden surrounding the magnificent waterway.

Since Nasser got away with seizing the Suez Canal in 1956, Panamanian politicos have dreamed of little else than taking over the Panama Canal. They have continually vilified the United States and incited their population against it. Some American liberals have applauded these tactics, arguing that in a "new world order” unilateral control of the Canal is obsolete.

The unhappy Suez experience under Egyptian control, however, hardly recommends Panamanian domination of an interoceanic waterway indispensable to world commerce and to the security of the United States and its allies. During a conventional war 90% of bulk tonnage to support committed forces moves by ship. The demonstrated value of the Canal in World Wars I and II was fully confirmed by its use during the Korean War, the Cuban Missile Crisis and the Vietnam War. Between 1964 and 1968 the military-sponsored cargo through the Canal increased by 640% for dry cargo and by 430% for petroleum products. In time of peace 70% of Canal cargoes originate in or are destined for the United States.

The rights of the United States to the Panama Canal were bought and paid for and the nation is under no obligation to renounce or modify those rights. American taxpayers contributed more than 350 million gold dollars to build the Canal, a sum worth many times that amount in the depreciated currency of 1976. This includes the cost of digging through Culebra Cut and erecting the locks and dams and hospitals and machine shops needed for the gigantic enterprise. As of today the United States has invested nearly seven billion dollars in the purchase of land from private owners and in the construction, administration and defense of the Canal.

The treaty on which U. S. ownership rests is as clearly final as the purchase of Louisiana from France in 1803 or of Alaska from Russia in 1867. Amazingly, however, the U. S. Administration is engaged in an all-out effort to obtain Congressional approval for surrendering the Canal to Panama. No similar surrender has been attempted since the nation was founded in 1776.

Does this sound incredible? Here are the facts.

On February 7, 1974, in Panama City, the Panamanian Foreign Minister, Juan A. Tack, and Secretary of State Henry A. Kissinger, acting in behalf of the United States, initialed a document in which the United States agreed to negotiate a new treaty containing the following "principles": 1) The original 1903 treaty, by which the United States acquired perpetual sovereignty over the Canal Zone, would be abrogated, 2) The "concept of perpetuity" of the U. S. ownership would be eliminated, and 3) U.S. jurisdiction over the Canal would be terminated at a date to be fixed in the new treaty. It was also agreed that from the moment the new treaty became effective, the operation and defense of the Canal would be a joint undertaking by the two countries, so that the United States would be unable to act without the consent of Panama. Every concession contained in the 1974 agreement was made unilaterally by the Executive of the United States, all without the authorization of the Congress.