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will with terms that were the inducement to construct the Isthmian Canal at Panama instead of Nicaragua.

2. Its construction and subsequent maintenance, operation, sanitation and protection, including defense, from 1904 to June 30, 1968, represent a net total investment of more than $5,000,000,000, all provided by the taxpayers of the United States.

3. The report of the Atlantic-Pacific Interoceanic Canal Study Commission headed by Robert B. Anderson was submitted to the President on December 1, 1970, and recommended the construction of a second canal of so-called sea level design about 10 miles west of the existing canal at an estimated initial cost of $2,880,000,000, exclusive of the cost of the right-of-way and an inevitable indemnity to Panama.

4. According to Colonel John P. Sheffer, former Executive Director of the Anderson panel, the main purpose of the sea level proposal in Panama is to obtain "better treaty relationships" with that country, that if these concessions to the Panamanians are not obtained the project is “not warranted”, that "it is not justified economically”, and that it “may never be constructed". (Cong Record, 24 March, 1971, p. S-3879.)

5. Certain elements of Washington Officialdom are now negotiating with Panama for a new canal treaty, or treaties, which hinge upon the surrender by the United States to Panama of our treaty-based sovereign rights, power and authority over the Canal Zone and its vast installations.

6. The United States negotiators for the surrender to Panama are Robert B. Anderson and John C. Mundt, who hold the personal rank of Ambassadors, appointed by the President.

7. The time table for the negotiations calls for completion and signature of the treaty, or treaties, in August, 1971, submission to the Senate for advice and consent in October and ratification before 1972. Meanwhile our State Department negotiators have stated that no problem is expected in securing approval in the Senate.

8. These diplomatic maneuvers are being obscured from public view by barriers of secrecy that are self-imposed by officials of the State Department.

9. The U.S. Constitution (Art. 1, Sect. 3, clause 2) vests the power to dispose of territory and other property of the United States in the Congress (House and Senate).

SIGNIFICANCE

1. The continued control of the Panama Canal by the United States is absolutely necessary for the needs of both, interoceanic commerce and Hemispheric security.

2. Surrender of the canal by the United States would inevitably result in Panama beroming another Cuba and the Panama Canal another Suez Canal, both under the control of the U.S.S.R.

3. The great challenge on the Isthmus is not Uniter States control versus Panamanian but continued U.S. sovereignty over the Canal Zone versus T.S.S.R. domination, and this is the challenge that should be debated in the Congress,

4. High officials of our government, without authorization of the Congress, are preparing another betrayal of the vital interests of the United States at Panama.

ACTION INDICATED

1. Write the President, your Senators and your Congressman opposing the surrender of any United States sovereign rights, power and authority over the Canal Zone or Panama Canal, or anywhere else, enclosing a copy of this ALERT.

2. Write your Congressman demanding the impeachment and punishment before the bar of any high official who makes such recommendation.

3. Write letters to editors of your local papers along the same line.

4. Urge supporting action from your local business, civic and patriotic organizations.

5. Work for the election to national political office in 1972 only of those candidates for President, Senate and House of Representatives who will support continued United States sovereign control of the Panama Canal and its indispensable protection of the Canal Zone territory.

DEPARTMENT OF STATE,

Washington, D.C.

BACKGROUND OF U.S. DECISION TO RESUME PANAMA CANAL TREATY

NEGOTIATIONS

1. Panama has been discontent with the Treaty of 1903 since its inception and has sought more generous terms with increasing intensity in recent years. Revisions were made in 1936 and 1955. But the most objectionable feature from Panama's viewpoint-U.S. sovereignty over the Canal Zone in perpetuity-remained unchanged. Neither did the increases in payments and other economic benefits for Panama in the two revisions provide what Panama considers to be its fair share.

2. Panama's discontent led to destructive riots along the Canal Zone border in 1958 and 1964. The 1964 upheaval and subsequent criticism of U.S. policy in the OAS, the UN, and in other international forums underscored the timeliness of President Johnson's decision that the reasonable aspirations of Panama could be met in a new treaty that continued to protect vital United States interests. On December 18, 1964, the President stated :

“This Government has completed an intensive review of policy toward the present and the future of the Panama Canal. On the basis of this review, I have reached two decisions.

“First, I have decided that the United States should press forward with Panama and other interested governments, in plans and preparations for a sea-level canal in this area.

“Second, I have decided to propose to the Government of Panama the negotiation of an entirely new treaty on the existing Panama Canal.

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“Today we have informed the Government of Panama that we are ready to negotiate a new treaty. In such a treaty we must retain the rights which are necessary for the effective operation and the protection to the Canal, and the administration of the areas that are necessary for those purposes. Such a treaty would replace the Treaty of 1903 and its amendments. It should recognize the sovereignty of Panama. It should provide for its own termination when a sea-level canal comes into operation. It should provide for effective discharge of our common responsibilities for hemisphere defense. Until a new agreement is reached, of course, the present treaties will

remain in effect." 3. The basic U.S. treaty objectives by President Johnson in 1964 and supported by Presidents Hoover, Truman, and Eisenhower were to maintain U.S. control and defense of a canal in Panama while removing to the maximum extent possible all other causes of friction between the two countries. To this end, new treaties were negotiated between 1964 and 1967 which contained the following major provisions (as summarized in the December 1970 final report of the Atlantic-Pacific Interoceanic Canal Study Commission) :

The first of the proposed treaties, that for the continued operation of the present canal, would have abrogated the Treaty of 1903 and provided for: (a) recognition of Panamanian sovereignty and the sharing of jurisdiction in the canal area, (b) operation of the canal by a joint authority consisting of five United States citizens and four Panamanian citizens, (c) royalty payments to Panama rising from 17 cents to 22 cents per long ton of cargo through the canal, and (d) exclusive possession of the canal by Panama in 1999 if no new canal were constructed or shortly after the opening date of a sea-level canal, but no later than 2009, if one were built.

The second, for a sea-level canal, would have granted the United States an option for 20 years after ratification to start constructing a sea-level canal in Panama, 15 more years for its construction, and United States majority membership in the controlling authority for 60 years after the opening date or until 2067, whichever was earlier. It would have required additional agreements on the location, method of construction, and financial arrangements for a sea-level canal, these matters to be negotiated when the United States decided to execute its option.

The third, for the United States military bases in Panama, would have provided for their continued use by United States forces 5 years beyond the termination date of the proposed treaty for the continued operation of the existing canal. If the United States constructed a sea-level canal in Panama, the base rights treaty would have been extended for the duration of the

treaty for the new canal. The Panamanian President did not move to have these treaties ratified. Consequently, no attempt to ratify them was made in the United States.

4. President Nixon has established negotiating objectives similar to those of President Johnson in 1964, modified by developments since 1967. Continued US control and defense of the existing canal are non-negotiable US requirements in a new treaty. The rights (without obligation) to expand the existing canal or to build a sea-level canal are essential to US agreement to a new treaty, with the exact conditions to accompany these rights to be determined by negotiation. The US is willing to provide greater economic benefits from the canal for Panama and release unneeded land areas, again with the exact terms to be developed by negotiation.

5. Panama has expressed willingness to negotiate arrangements for continued US control and defense of the existing canal though it remains to be seen what they mean by this. Panama has not indicated its specific views on the acceptable duration of a new treaty. Panama is determined to terminate current l's treaty rights “as if sovereign" and extend the jurisdiction of the Government of Panama into what is now the Canal Zone. The 1967 draft treaties would have terminated US jurisdiction in the canal area (but not control and defense of canal operations) with the construction of a sea-level canal. While the United States is now prepared to negotiate for the reduction in the extent of US jurisdiction in the canal area, it remains to be determined whether a mutually acceptable compromise can be worked out between US and Panamanian objectives in this area.

6. In the area of economic benefits Panama has indicated intent to seek a greater direct payment than she now receives ($1.93 million annually), the opening of the present Canal Zone to Panamanian commercial enterprise, increased employment of Panamanian citizens, and increased use of Panamanian products and services in the canal operation. All of these objectives appear reasonable and terms for their accomplishment were agreed upon in 1967. The U.S. remains willing to negotiate new arrangements along similar lines, provided they do not hazard U.S. control of canal operations, the continuation of reasonable toll levels, and the continued financial viability of the canal enterprise.

7. Renewal of violence in Panama, possibly more extensive than experienced in 1964, might be unavoidable if the treaty objectives considered by the Panamanian people to be reasonable and just are not substantially achieved. While the United States has no intention of yielding control and defense of the canal to the threat of violence, it is certainly in the U.S. interest in Panama, in Latin America, and worldwide again to demonstrate, as in 1967, our willingness to make adjustments in our treaty relationship with Panama that do not significantly weaken the United States' rights to control and defend the canal. Inasmuch as Panama appears willing to permit these rights to continue, the United States would find it difficult to justify itself in world forums should violence develop in Panama over lesser issues, and the U.S. be forced again to commit its Armed Forces again Panamanian incursions into the Canal Zone.

8. It is our intent to show Latin America and the world that the United States as a great power can develop a fair and mutually acceptable treaty relationship with a nation as small as Panama. Such a treaty must, therefore, be founded upon common interests and mutual benefits rather than upon the unquestioned ability of the United States to enforce its 1903 treaty rights against the wishes of the Panamanian people.

9. The Provisional Junta Government of Panama has expressed intent to ratify a new treaty by plebiscite to ensure that it is acceptable to the Panamanian people.

OFFICE OF INTEROCEANIC CANAL NEGOTIATIONS. Mr. FASCELL. I want to thank you, Mr. Rarick.

I would like to ask you, if U.S. policy is as you have stated, what is to prevent the takeover, either directly or indirectly, of the canal now, without any changes in the treaty?

Mr. RaRICK. Mr. Chairman, it is one thing to sit hack and notify our enemy that we are going to surrender or yield by taking no action which, as I appreciate it, is what the Panamanian people are being told by Mr. Meyer, a representative of our Government, in their newspapers. It is another thing to come out unambigiously and say we are going to maintain the sovereignty, that this is a necessity in the defense of our country and the free world.

I recently received word that the dictator, Mr. Torrijos, and his underground organization are planning violent demonstrations on October 11, apparently figuring in this way they can effect American public opinion to help foster the utterances of Mr. Meyer that we would do nothing.

This morning all Members received this written report or briefing on canal negotiations from Mr. Abshire, Assistant Secretary for Congressional Relations of the Department of State, reviewing the position of our diplomatic experts. Paragraphs 7 and 8, I would like to read for the record :

7. Renewal of violence in Panama, possibly more extensive than experienced in 1964, might be unavoidable if the treaty objectives considered by the Panamanian people to be reasonable and just are not substantially achieved. While the U.S. has no intention of yielding control and defense of the canal to the threat of violence, it is certainly in the U.S. interest in Panama, in Latin America, and worldwide again to demonstrate, as in 1967, our willingness to make adjustments in our treaty relationship with Panama that do not significantly weaken the United States' rights to control and defend the canal.

8. It is our intent to show Latin America and the world that the United States as a great power can develop a fair and mutually acceptable treaty relationship with a nation as small as Panama. Such a treaty must, therefore, be founded upon common interests and mutual benefits.

Apparently the suggestion of violence by State is to frighten us into acquiescing in the surrender of sovereignty over the canal.

If the word received from the Canal Zone by wire is correct, it suggests there may be a liaison between the mis-named nationalists or the Communists— I don't think you could call them Panamanians-and some people in our State Department. Here we have U.S. diplomatic people again pushing the surrender line to get negotiations underway because there may be a renewal of violence.

On the other hand, from Panama we learn that there is already a plan to create the violence.

Just by coincidence, I am sure, both the telegram and the briefing material from our State Department right here in Washington bear the same date.

My feelings are that we can take a positive approach to this matter. We do not have to telegraph our plans before the crisis arises, nor do we need encourage attack by blowing retreat before the battle commences.

Mr. FASCELL. Without objection, the telegram you referred to will be included in the record. (The telegram follows:)

[Telegram]

September 22, 1971. Hon. DANIEL FLOOD, House of Representatives, Washington, D.C.

There is every indication that Omar Torrijos, the leftist dictator of Panama and the reds are planning violent demonstrations on October 11, to mark the third anniversary of the overthrow of President Arnulfo Arias' constitutional government. These demonstrations do not represent the people of Panama who along with President Arias who is in exile in Florida are gravely worried over these possible riots that could exceed those of 1964. Every effort should be made to prevent this useless violence whereby many innocent victims in the Canal Zone and Panama could be injured and possibly killed.

PHILLIP HARMAN,
Grand Son-in-Law of Former

President Amador of Panama. Mr. Fascell. It seems to me, just as a matter of personal opinion, that any such action would be entirely counterproductive. I do not believe anybody would negotiate with a gun at his head, but that is a matter of opinion.

Mr. Morse.

Mr. MORSE. I would like to thank Mr. Rarick for his contribution to the subcommittee's study.

What were the provisions of the 1967 treaty which went to the question of dilution of sovereignty?

Mr. RARICK. First, you will remember, Mr. Morse, was the flying of the Panamanian flag.

Then the agreement on a gradual dilution by a binational commission.

Mr. MORSE. On which the United States would have had a majority?

Mr. RARICK. Yes; this was the start. This was merely opening the door * * * and from past experience we would negotiate away any advantage.

Mr. MORSE. Are there specific provisions in the 1967 treaty that ceded sovereignty to the Panamanians ?

Mr. RARICK. Yes; they would have abrogated the 1903 treaty and ceded sovereignty over the Canal Zone to Panama, and shared the operation and defense of the canal with Panama. You will remember the public uprising. The idea that we were giving up the Panama Canal did not go with the American people.

The Panama Canal to our people is like the Statue of Liberty or the Constitution. In itself, it is a hallmark of freedom and a symbol of the United States itself.

Mr. Morse. In the original 1903 treaty, sir, was sovereignty over the zone granted to the United States? I remember the phrase "as if sovereign” being used. Do you recall the exact language !

Mr. RARICK. Yes; it granted to the United States in perpetuity all the rights, power, and authority as if we were sovereign of the isthmus to the entire exclusion of the exercise by Panama of any such rights, power, or authority. In addition, the United States acquired title to all privately owned land and property in the Canal Zone by purchase from individual property owners.

Our foreign policy is childish. Every time a vocal minority screams that they have become unhappy or they threaten possible violence, we act as if guilty of some wrong and give in.

Mr. MORSE. Thank you, Mr. Chairman.
Mr. FASCELL. Thank you, Mr. Rarick.
Mr. RARICK. Thank you.

Mr. FASCELL. Our next distinguished witness is the Honorable Leonor K. Sullivan, of the State of Missouri, who has a long and deep interest in the canal from her vantage point on the Merchant Marine and Fisheries Committee and from the jurisdiction of her own subcommittee.

We shall be pleased to hear from you today.

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