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(6) Canal Zone commissary and import privileges of
non-U.S. citizen employees of Canal Zone agencies, except
members of the Armed Forces of the United States, who
do not reside in the zone are withdrawn.

(7) The U.S. Congress will be requested to enact legis-
lation authorizing establishment of a single basic wage
scale for all United States and Panamanian employees
of the U.S. Government in the Canal Zone and providing
for uniform application of the Civil Service Retirement
Act to citizens of the United States and citizens of Panama
employed by the U.S. Government in the Canal Zone.

(8) The United States will afford equality of oppor-
tunity to citizens of Panama for employment in all U.S.
Government positions in the Canal Zone for which they
are qualified and in which the employment of U.S. citizens
is not required, in the judgment of the United States, for
security reasons.

(9) Citizens of Panama will be afforded opportunity to
participate in such training programs as may be conducted
for employees by U.S. agencies in the Canal Zone.

(10) 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.

(11) The U.S. Congress will be requested to enact the
necessary legislation for the construction across the canal
at Balboa of a bridge.

APPENDIX E

COMMENTARY BY HON. DANIEL J. FLOOD, A MEMBER IN CONGRESS FROM THE STATE OF PENNSYLVANIA, ON EXCERPTS FROM SENATOR ALAN CRANSTON'S STATEMENT 1

... the notion that the United States owns the Panama Canal Zone. It does not. It never has. It doesn't even have sovereignty over the Canal Zone."

Comment. The essential facts are: (1) that in the 1903 Treaty Panama granted the "use, occupation and control" of the Canal Zone "in perpetuity” for the “construction, maintenance, operation, sanitation and protection" of the Panama Canal; (2) that Panama granter "all the rights, power and authority within the Zone” which the United States "would possess and exercise if it were sovereign of the territory”; and (3) that this grant was made to the "entire exclusion of the exercise by the Republic of Panama of any such sovereign rights, power, or authority.”

In addition to the grant of exclusive sovereign powers, the United States acquired title to all privately owned land and property in the Zone by purchase from individual property owners, making the Canal Zone the most costly territorial acquisition in U.S. history, in 1964 estimated at $144,568,571. (H. Doc. No. 474, 89th Congress, p. 361).

Though Secretaries Hay and Taft said that under the terms of the 1903 Treaty Panama seems to retain what they termed a "titular sovereignty,” they stressed that this did not impair United States actual sovereignty of the Zone. Later, Secretary Hughes confirmed this view and refused to discuss the subject with the Panama Government.

In the light of all the facts, the only valid claim that Panama can have as regards the Canal Zone is that of a reversionary interest in the sole event the United States should abandon the Panama Canal. In such event sovereignty over the Canal Zone would probably be surrendered by the United States, which would still own the land and property until disposal was authorized by the Congress. (U.S. Constitution, Art. IV, Sec. 3, Clause 2.)

"For the past sixty-eight years we have exercised that power and authority causing hard feelings, bitterness and scorn between Panamanians and other Latins on the one hand, and the Americans on the other. It led to tragic riots in 1959 and 1964."

Comment. The author of this quotation is evidently unfamiliar with the actual facts about life on the Isthmus. Zonites have always had friends in Panama. More than 16,000 Panamanians are employed in the Canal Zone and in 1969 Canal Zone sources expended some $161,000,000 in Panama.

1 Senator Cranston's statement appears on p. 95.

(170)

Despite the economic dependence of Panama on the Canal Zone activities, Panamanian politicians have run for office on the platform that "the Canal is ours, saying, "Vote for me, I'll take the canal, and you will not have to work anymore.” In addition there have been, and still are, revolutionary agitators who have taken advantage of the political situation in Panama to stir up hatred and violence, a condition that always develops wherever Soviet power is active.

The failure of our own officials to take prompt action in 1958 to arrest and punish the first flag-planting invaders of the Canal Zone as they should have done caused Panamanian revolutionists to mistake courtesy and restraint for weakness, thus serving as an invitation for increased demands that culminated in long planned violence.

“We have heard statements to the effect that giving up our alleged sovereignty over the Canal Zone is tantamount to relinquishing control of the Canal itself."

Comment.-U.S. sovereignty over the Canal Zone is absolutely essential for the continued, efficient operation of the Canal. Were sovereignty surrendered to Panama, such action would deliver control and defense of the Canal to Panama and render provisions for them subject to unilateral cancellation by Panama, thereby forcing the United States to choose between intervention or withdrawal. If it chose intervention, this would be in violation of international law because sovereignty had been surrendered.

U.S. sovereignty over the Canal Zone is in all respects a fair and reasonable arrangement, altogether essential for the continued secure operation of the Canal and is the key issue as regards the future of the Panama Canal.

The contention by the revolutionaryGovernment of Panama, founded by force and continued with armed terror, of ownership of the Zone and Canal after the United States has built, operated and protected it for three generations and made it the most successful industrial enterprise in history, indeed, comes with bad grace.

The United States has expended more than $5,000,000,000 on the Canal enterprise, including its defense, to which Panama has made no contribution whatsoever. The demand of the bayonet government of Panama in the light of the circumstances is completely demogogic and unrealistic!

“Whether or not there was any justification for insisting on a U.S. controlled zone to insure the safety and comfort of Americans who were building the Canal, that justification hardly remains in 1971."

Comment. Though admitting that conditions have changed on the Isthmus, they have changed for the worse. Ceding sovereignty over the indispensable protective frame of the Canal Zone would be like opening the White House grounds for public development to afford better protection for the Presidents.

Instead of surrendering the Zone to Panama or reducing its area, this territory should be widened to include the entire watershed of the Chagres River.

The Panama Canal could never have been constructed and subsequently operated and protected except for the Canal Zone protective strip; and any other conclusion is absolutely stupid and unrealistic. Why should the taxpayers of our Nation surrender the Canal and its indispensable Canal Zone to any other government or international agency, especially so when such action would result in a takeover of the Canal by Soviet power, which for many years has exercised a policy directed at such surrender by the United States? Witness Soviet control of Cuba and Chile, together with destructive assaults on the Monroe Doctrine, which was designed to protect Latin American countries.

"Most of the Americans who live in the Canal Zone do not have any occupational association with the Canal itself."

Comment.—This statement alone is misleading. The Canal Zone is an area built upon the needs of the Canal and the shipping that uses it. There are activities concerned with marine operations and others for support services, both groups essential for one purpose--the efficient operation and protection of the Canal and the needs of shipping: The functions of maintenance, operation, and protection of the Canal and Canal Zone require in the very nature of the situation the present forces. In consequence all these activities have been discharged with signal success; and Panama itself has been vastly benefited.

... far cry from the jungle swampland that Walter Reed and his associates found in attempting to clear the land in the early part of this century."

Comment.-Walter Reed never had anything to do with the Panama Canal. The great sanitarian of the Isthmus was William C. Gorgas, who applied there the lessons learned by Walter Reed in Cuba.

When the United States gave up its control, following the 1955 Treaty, of sanitation in the terminal cities of Panama and Colon, garbage piled up in the streets, rats multiplied in inordinate fashion, and mosquitoes freely bred, again making the Isthmus a threat to Hemispheric health.

... the Canal Zone, and the forces residing there, do not provide significant protection for the Canal."

Comment. The experience of 1959 and 1964 refute this statement. Invasion of the Canal Zone from the Republic of Panama by unrestrained mobs is an ever-present potential and cannot be dismissed as “nonsense.”

Protection of the Canal from aggression from abroad is the function of the combined military and naval might of the United States, including forces based in the United States as well as the Canal Zone.

Withdrawal of U.S. Forces from the Canal Zone would be the first step toward enabling the takeover of the Canal as occurred in Egypt soon after British withdrawal from the Suez Canal Zone.

Canal Zone as a colonialistic outrage, fenced apart from the horrible slums which neighbor alongside."

Comment.—The Canal Zone was planned as an object for emulation and not for envy. Surrendering the Zone to Panama would inevitably have the effects of extending the slums and brothels of Panama, closing the Canal itself, and driving out present American leadership.

The Canal could not be successfully operated under such conditions.

“How then would the Americans of today feel toward a British Colony living along side of Buffalo, New York, and Cleveland ?”

Comment. The cases of the Erie and Panama Canals are not analogous. The Erie Canal was constructed in developed country of favorable climate and population; Panama is one of the most forbidding in the world.

“We must solve such frictions before they become major confrontations."

Comment.This reflects the weak and timid policy that has been practiced by our Government in recent years. Any diplomacy that seeks solely to remove causes of friction between countries such as are inherent at Panama merely invites greater demands and is selfdefeating.

Full sovereignty as now prevails in the Canal Zone is far more conducive to harmony than extraterritoriality. To speak of our interest in the Panama Canal as being colonial is utter nonsense and absolutely without merit.

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